Microsoft put up a strong show of original equipment manufacturers (OEM) support at this week's launch in Taiwan of the Chinese Pocket PC 2002 operating system. Chinese Pocket PC 2002 is the traditional Chinese version of Microsoft's new operating system for personal digital assistants (PDAs). A simplified Chinese version is expected to be launched in the mainland in March next year. The software giant announced key alliances with several big-name Taiwanese computer-makers and OEM partners. They include Acer, Asustek, Compal, ETen, HTC, Inventec Besta and Legend Computer. This will boost the number of Pocket PC 2002 devices and hopefully win precious market share away from PDA market leader Palm Computing. 'We still got a way to go but we think that we've got the right formula down now to go after the enterprise market,' said Dave Wright, general manager of product marketing at Microsoft's mobility group for Asia. Microsoft's strategy is focused on winning enterprise customers and not consumers. More than two million Pocket PCs have been sold between April last year and last month. 'People keep comparing the Pocket PC with Palm. I see two very separate product offerings actually. 'One is ready for deployment in the enterprise and the other is more of a personal device which does very well at what it was designed to do which is PIM [personal information management],' Mr Wright said. Bill Tseng, president of Inventec Besta, which makes a popular electronic dictionary sold in the Greater China region, said the Taiwanese OEM industry was slowly rallying behind Microsoft's Pocket PC platform because Pocket PC 2002 was much improved from Pocket PC 2000 and it worked with the PC seamlessly. Inventec Besta unveiled a prototype Pocket PC device that has both SD and Compact Flash slots. With PC sales slowing worldwide, Microsoft is extending its tentacles to the growing mobile Internet devices market, where the company is still an underdog. International Data Corp (IDC) said about three million hand-held units were shipped to the Asia-Pacific this year. By 2005, the research firm forecast 12.5 million PDAs would be shipped to the region. But by putting its focus on building a product for enterprise needs, Microsoft is gaining ground in that segment, which is slower to adopt PDAs than consumers. While Palm still has the market share, it is making less money than Compaq's iPaq sales. Palm competes in the low end against multiple Palm OS licensees, including Handspring and Sony, and recently slashed prices of its devices to maintain market share. Jeff Chang, general manager at Life International, which operates a chain of 24-hour grocery stores throughout Taiwan, said: 'The Palm OS is just not scalable enough for enterprise needs. We need at least 64 megabytes of Ram integrated to the device and we need a fast processor.' All 720 Hi-Life stores will be using HP Jornada Chinese Pocket PC 2002 by July next year for inventory management. An IDC report released last week has forecast Pocket PCs will become the PDA market-share leader in 2003 with 31.4 per cent, with Palm trailing slightly behind with 31 per cent. IDC analyst Manny Lopez does not expect the release of Chinese Pocket PC 2002 to result in a significant sales boost for Pocket PCs in China because price, not language, is the main inhibitor. A typical Pocket PC sells for between HK$4,000 and HK$6,000. 'In [China], it is more of a price and functionality issue than a language issue, as Microsoft has been keen in providing local-language support for their original [Pocket PC], which was released late last year,' he said. Most users in China are price-sensitive and tend to go with local vendors that offer cheap and affective PIM. Microsoft's new operating system includes an integrated instant-messenger application, the ability to send data to and from devices running Palm's OS and Bluetooth support. Pocket PC 2002 also allows users to customise functions and appearance of the operating system, including the ability to change the desktop background. The traditional Chinese version of the operating system has most of these capabilities. Judging from the prototype Pocket PC 2002 devices from Microsoft's Taiwanese OEM partners, the hand-held market is about to get more interesting. The lightest model on display was a 180-gram Pocket PC from Asustek featuring an SD slot, a 3.5-inch colour display, 64 MB of flashable Rom and 64 MB of SDRam onboard. A higher-end model features an SD slot and a Compact Flash slot. The new devices, called Asus Pocket PC AD300, will be launched this month. Asustek also will unveil jackets that attach to the AD300, allowing the device to accept PC card modules. Another compelling Pocket PC device unveiled was a prototype from ETen featuring both phone and PDA capabilities, as well as an SD slot. The device supports both GPRS and GSM. According to ETen chairman Simon Hwang, the device will be launched in the second quarter and will probably be introduced in Hong Kong shortly afterwards. Mr Hwang said he did not expect the device to sell on just its hardware merits. 'Our strategy is to not only make the device, but also to provide the services and expansion modules to increase the uses of the devices to our enterprise customers.'