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Microsoft tries handhelds
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September 6, 2001: 7:28 a.m. ET
World's largest software maker tries to enter pocket PC market for fourth time
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NEW YORK (CNNfn) - In its fourth attempt to gain market share in the handheld PC software market, Microsoft will launch a new version of its software for pocket PCs Thursday at an industry trade show, according to a published report.
Redmond, Wash.-based Microsoft's latest handheld software, code named Merlin, will attempt to take market share from Palm Inc. and improve on its past versions of handheld software, which did not fare well, according to Thursday's edition of The Wall Street Journal.
Handheld devices based on Microsoft's software gained 16 percent of the market share in June, up from 10 percent a year earlier, according to the Journal, which cited market tracker NPD Intelect. In comparison, Palm-based devices held 80 percent of the market, down from 90 percent a year earlier.
In order to develop its software for handheld and wireless devices, Microsoft (MSFT: Research, Estimates) spent $300 million on research and development, according to the newspaper, citing company executives.
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The latest round of the company's software will be aimed at corporations, an area in which Palm (PALM: Research, Estimates) has struggled. Microsoft has been developing the software, which is officially known as Pocket PC 2002, since April 2000 and it is designed with corporate use in mind. The new version contains virtual private networking, an updated password protection system, and increased capacity for anti-virus programs, according to the Journal.
Despite the updated version of its software, some analysts see Merlin as a later edition of Microsoft's past attempts at the pocket PC market, which is regarded as a shrunken version of its Windows operating system. "I thought there should have been more," Ken Dulaney, an analyst with Gartner Group told the newspaper. "It's not a whole lot different than before."
Microsoft shares closed at $57.74 Wednesday, up $1.64, while shares of Palm closed at $3.50, down 6 cents. 
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