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Millions of people use some type of hand-held computer to organize and make their lives easier — from the ubiquitous Palms to the Windows-based Pocket PCs. However, hand-held computing is at a critical crossroads. Not long ago, Palm owned the market with a 70 percent to 80 percent share. No longer. Microsoft’s Pocket PC is making inroads, especially in the enterprise market. While Palm has suffered criticism for not innovating, Handspring, Sony and Handera have picked up the pace. But even Palm’s inventor — Jeff Hawkins, who went on to found Handspring — has discovered that building a better mousetrap does not automatically translate into profitability. His company ultimately had to give away the VisorPhone, a $300-$500 cell phone add-on for Visor organizers, as part of a service bundle. Basic organizers have now become low-priced commodities with little profit margin. Hand-held companies have their hopes set on wireless communications. Research In Motion (RIM) already offers wireless data via its Blackberry devices. The company is adding voice features to its Asian and European markets. It’s also working with Nextel and Motorola to incorporate Blackberry features into Nextel’s line of voice communication devices. Handspring is betting the farm on its new Treo convergence device — combining a Palm-based organizer with a cell phone. One model includes a Blackberry-ish thumbpad. None of them has an expansion slot for add-on devices. This was the original selling point of Handspring devices. Perhaps Treo’s greatest strength will materialize later: a software upgrade that will enable “always-on” e-mail. What made the Blackberry such a hit was that users did not have to fetch their e-mail. It simply arrived whenever the unit was switched on. Microsoft is also gearing up the Pocket PC operating system to include integrated wireless voice and data capabilities. Hewlett-Packard has announced a version of its Jornada hand-held device with these capabilities, but it will only be sold in Europe. Palm is playing catch-up with its new i705 — a revamped Palm VII with always-on e-mail and an optional snap-on keyboard. The e-mail feature will be available only for corporate users. Forget about voice features being added any time soon. The big question with wireless communications is: If they build it, how many will come? RIM’s Blackberries still have only several hundred thousand customers, compared with millions of Palm owners and nearly a billion cell phone owners. The market is wide open, but price is a big sticking point. Treos and Blackberries cost $400-$550, not small change in a recession. And then there are the monthly charges. Many of these devices do not include an “unlimited access” plan. Rather, wireless users pay by the minute, which adds up. Another challenge is that hand-held wireless bandwidth is far slower than a standard 56K modem. The much-touted WAP (Wireless Application Protocol) services have yet to take off in the United States. The North American market is just now showing hopeful signs for faster third generation wireless networks, but the rollout will take time. Unlike Europe and Asia, where Global System for Mobile Communication (GSM) is the dominant network, the U.S. wireless market is highly segmented among competing digital networks, such as Code Division Multiple Access, Time Division Multiple Access and GSM. Consumers and organizations are understandably cautious; too many choices can be a bad thing. Choosing a winning wireless strategy may prove more challenging, but not impossible. One strategy is to maximize the benefits in the here-and-now. Another is simply to wait.

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