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Microsoft hopes Tablet upgrade will score

First year sales modest for new OSrn

When Microsoft Corp. releases the second version of its Tablet PC operating system in a few months, it will be on the hopes adoption of pen-capable laptops will catch on with users faster than its initial year.

Windows XP Tablet PC Edition 2004 will be launched “”sometime in the spring or summer,””

says Elliott Katz, product manager for Windows clients at Microsoft Canada.

“”We’re taking the idea of combining the simplicity and creativity of pen and paper with the power of the PC to the next level,”” he says of the upgrade. It will be sold only with hardware. Existing users will be able to download a free upgrade.

It will include enhanced handwriting recognition, easier text insertion, the ability for software developers and users to create rules for recognizing handwriting in text fields, improved integration with Office 2003 and OneNote 2003 (a note saving and organization application) to allow users to write within an Office document, and capabilities for software developers to integrate pen and text in business applications.

Because IDC Canada doesn’t publish market numbers yet, it’s impossible to get an idea of Canadian sales except by inference. “”It’s still early,”” says Eddie Chan, the company’s research analyst for mobile and PC devices, adding that Tablet PCs are a new technology introduced in a tight spending market. Businesses are still evaluating it, he says, with deployments only just beginning. And sales aren’t helped by the price premium on Tablet PC slates and convertables.

Manufacturers report pilots are being carried out in verticals such as education, insurance, health care and municipal inspection.

But consider this statement from Chris Matto, a product manager for Toshiba of Canada Ltd. on its Tablet PC sales: “”Our biggest customer to date has been Microsoft.””

Manufacturers have also been cautious with Tablet PCs, favouring convertables over slates and keeping models down to two or three at the most. Hewlett-Packard, for example, has only one, the recently upgraded TC-1100 with Pentium M or Celeron processors. It won’t be replaced until the end of the year, says Daniel Reio, product manger for notebook and Tablet PCs at HP Canada. Sales of the earlier TC-1000 were “”modest,”” he says.

Fujitsu Canada Inc., known for its pen-based slate computers, has only one Tablet PC convertable, the T-3000, with a choice of two processors. Toshiba has two, including the recently-released Portege M-200.

But the field also includes newcomers ViewSonic Corp. and Motion Computing of Austin, Texas, which has 15 Canadian resellers.

“”It’s the type of product where sales are driven by applications, points out Pete Lewis, Motion’s Oakville, Ont.-based manager of international business development.

But Doug Smith, president of Filbitron Systems Group, a Markham, Ont. software developer and integrator of pen-based solutions, says the slow adoption of Windows XP by corporations has hindered the spread of Tablet PCs.

Because of that none of the company’s customers have converted their pen-based systems to Tablet PC, he said.

Still, Microsoft is convinced most laptops will run the Tablet PC operating system in five years.