Handheld computers have been struggling for a position in the portable market. Unable to deliver notebook performance and not as small, lightweight and price-attractive as personal digital assistants (PDAs), they have so far failed to capture many consumers. What is the definition of a handheld PC? So far, they are slightly bigger and heftier than PDAs and run Microsoft Windows CE. Launched last year, Microsoft Windows CE is a stripped-down version of Windows 95 that was meant to draw consumers for its similar look and feel. It also was meant to supercharge the performance of a whole lineup of CE-based models. Furthermore, the second version of the operating system will support Chinese language, colour display and PowerPoint, but still without handwriting recognition capability. Windows CE 2.0 may be unveiled at the end of this year or early next. Elsie Kong, of Microsoft Hong Kong, said the company had no definite time schedule for the announcement. For Windows CE 1.0, Microsoft has identified a problem with the way some handheld PCs from Compaq and Casio turn off the power. Those problematic machines continue to draw power from AA batteries and even the back-up coin cell, though they appear to be turned off. In a worst-case scenario, users who do not replace batteries can lose valuable unsaved data. The problem is found only in Casio's Cassiopeia and Compaq's PC Companion. Casio and Compaq, together with Microsoft, already have worked out a solution which is now available on both handheld PC providers' Web sites ( www.casio hpc.com/hpcsrvpk1.html and www.compaq.com/us/ common/prodinfo/handhelds/detail.html). But the software bug inevitably will make users feel less confident of these first-generation CE-based products. One major industry player said sales of its CE-based handheld PCs in the United States had been disappointing. He said both the product and market were not yet mature. Handheld devices have had their warmest reception in compact-loving Japan. Last month, Microsoft unveiled its Japanese version of Windows CE. NEC and Casio are scheduled to introduce Japanese-language products this month. The prices are between US$600 and $800. English Windows CE-based handheld PCs are available from Compaq, NEC, LG Goldstar, Philips, Hewlett-Packard (HP) and Casio. But only the last two are sold in Hong Kong. All the above CE-based models bundle personal information management software (calendar, tasks, contacts) and Windows-compatible applications including Pocket Word, Excel, Internet Explorer and Inbox for electronic mail. Their hardware configurations are also quite standardised: 2-4 MB Ram, 4-8 MB Rom, one to two PCMCIA slots, a small built-in keyboard, a pen-based input device and a backlight, four grey-scale, 480 x 240 pixel liquid crystal display. Manufacturers still make attempts to differentiate their offerings. HP's HP320LX is unique for its 640 x 240 pixel screen and a CompactFlash card slot for memory expansion. The company also offers CompactFlash storage cards with capacities ranging between 2 MB and 10 MB. Casio's Cassiopeia lets you connect with the company's own QV digital cameras. NEC's MobilePro employs a high-speed 64-bit RISC processor and a power management system, resulting in longer battery life of up to 40 hours. Philips' Velo 1 features a built-in 19.2 kilobits-per-second modem, two expansion slots and voice memo for recording messages of up to 16 minutes per megabit of Ram memory. HP's computer products sales and distribution manager Michael Lam said small screens and keyboards were the major limitations of handheld PCs. An alternative to CE-based models is Apple's MessagePad handheld computer, which is technically more advanced. Compatible with Macintosh and Windows, the MessagePad 2000 runs on the company's four-year-old Newton 2.1 operating system. It is operated by a stylus and an optional Newton keyboard. Its StrongARM-160MHz processor runs up to five times faster than its Windows counterparts, according to Apple. It has 5 MB Ram, 8 MB Rom, a 16-level, 480 x 320 grey-scale display with backlight, an internal speaker and a microphone for voice notes, and handwriting recognition capability. But the result is that Apple's offering is bigger, heavier, and more expensive. The MessagePad 2000 costs HK$8,656, while CE-based models are between HK$4,000 and HK$6,000. Nevertheless, Leo Won, systems consultant with Radical Technology, said neither CE-based models nor Apple's MessagePad were the most popular handheld systems. The US Robotics PalmPilot, a low-cost, pocket-sized organiser and communication tool, is claimed to hold 51 per cent of the handheld market. It is an expandable PDA with PC connection for data synchronisation. The PalmPilot is available in personal and professional versions, priced at HK$2,100 and HK$3,100. In addition to standard information management such as date, address and phone books, the professional version, with an external fax modem, features expense tracking, e-mail, TCP/ IP capabilities for corporate network access and Windows connectivity. It connects to a Macintosh with the add-on MacPac. 'To compete with handheld computers, PDAs are no longer working alone, but are upgraded as PC companions,' said Matthew Tse, of Sharp. The company's Zaurus ZR-3500X is different from past models, with its built-in fax modem and proprietary e-mail software. It is also equipped with PC application software such as Word and Excel, and a PC link cable and software to 'sync', or replicate, data between your PC and the Zaurus. More than two million expandable PDAs and handheld PCs will be sold this year around the world, estimates Dataquest, a technology consultancy. This will grow to five million by 2000. PDAs, with most advanced models costing more than HK$3,000 each, are popular in the retail market. Handheld computers may be able to win more customers by adding features such as dictionary or translator functions. Price is also a determinant factor. But HP's Alias Yeung said, unlike desktops, prices of handheld PCs would remain more stable. Instead of going into a price war, handheld PC manufacturers, including Apple and HP, are moving towards a vertical market, designing custom-made packages for corporate users in different industries requiring a high degree of mobility. Examples of such people are salesmen and insurance agents. Jeanne Lim, of Apple, said: 'It takes time to develop vertical solutions, but it is more rewarding and the product life cycle is longer.'