Microsoft, Samsung to sell cheap Pocket PC design

AMSTERDAM: U.S. software giant Microsoft and the semiconductor arm of South Korea's Samsung Electronics said on Tuesday they would start selling a blueprint design for cheap pocket-sized personal computers. The reference design, which is a ready-to-use set including chips, software and display, should allow any electronics manufacturer to produce a relatively inexpensive version of a handheld Pocket PC.

Existing high-end colour screen Pocket PCs can currently cost up to $700. The products based on the new design would be priced at $300 or less for a colour screen handheld version. Designs for a device with a greyscale display will also be available. Until now, Microsoft only allowed colour screens on its latest generation of Pocket PCs.

The new design can be seen as a response to Palm's recent launch of a $99 entry-level handheld computer in an attempt to boost the segment and grab back market share. Microsoft is trying to expand from its powerful position in larger desktop computers into the market for personal digital assistants (PDAs). At the moment, about 48 percent of PDAs run on Palm software.

Microsoft-based devices make up 30 percent, roughly double the market share of a year earlier. But PDA sales growth has stalled over the last 18 months, as consumers and businesses are reluctant to invest in the costly new devices, which also need a lot of IT support.

Global shipments of PDAs grew 0.6 percent to 2.6 million units in the third quarter, and were down 8.3 percent for the first nine months of 2002, according to Gartner Dataquest. The cheaper PDAs based on the Microsoft-Samsung reference design will also compete with other Microsoft-based Pocket PCs already on the market from Japan's NEC and Toshiba, a London-based Microsoft spokesman said. No customers were announced for the new reference design.

© Reuters