CHICAGO (CNNfn) - Microsoft and three leading computer makers rolled out a new line of handheld computers that some market observers say represent a real threat to the widely-used "Pilot" devices from Palm.
 Called the "Pocket PC," the new devices are powered by Microsoft's newest version of its handheld computing platform, which so far has not been very successful for the software giant.
While users of previous incarnations of Microsoft's portable operating system complained that it was nothing more than a slimmed down version of its desktop OS and not conducive to the handheld environment, Palm, with its more "bare bones" interface, garnered roughly 90 percent of the market share.
But the Pocket PC, which Microsoft executives officially unveiled in New York City's Grand Central Station and demonstrated for attendees at the Comdex technology conference taking place here, has some industry experts expecting the competition to heat up.
They are priced between $499 and $599, putting them well above Palm's price range, which tops off at $449 for its Palm IIIc, which features a color screen, or Palm VII, which has a built-in wireless Internet connection.
With the new devices, which are being manufactured by Compaq (CPQ: Research, Estimates), Hewlett-Packard (HWP: Research, Estimates) and Casio Computer, Microsoft is testing the waters with the third version of its handheld OS
"It usually takes Microsoft three or four times to do it right," said Tim Bajarin, president of technology consulting firm Creative Strategies Research International.
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Ben Waldman, VP Mobile Devices for Microsoft talks about PocketPC.
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"This time, they really made the interface simpler," Bajarin said.
With the new Pocket PC, Microsoft makes many of the functions that used to require users to select options from pull-down menus available with one touch on the screen, similar to the Palm interface.
The new devices also support wireless Internet connections and contain a miniature version of Microsoft's Internet Explorer Web browser and Windows Media player for audio and video files
But perhaps more importantly, the Pocket PC offers seamless synchronization of data across a wide range of Windows applications, which makes it attractive to information technology managers in many corporations which are increasingly adopting portable computing devices into their operations, according to Bajarin.
Although Palm, which started to become popular about four years ago, had never really targeted the corporate market, their "Pilot" devices became so prevalent that many users began using them at work as well, he said.
That's led to an increased interest by IT managers, who because most of them already use Microsoft products, may be more likely to choose the Pocket PC to avoid potential compatibility problems, Bajarin said.
"The ease of exchanging data back and forth is what really gives Microsoft the IT connection," he said.
Palm -- whose president and chief operating officer, Alan Kessler, will give a keynote speech at Comdex on Thursday -- has said it has no plans to modify its devices or operating system. 
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