Big Computers in Small Packages
By Bridget Finn

(Business 2.0) – When it comes to hand-held devices, small is good. So is lots of processing power. Several startups have tried to put the two together to create PDA-size machines that run Windows XP and standard applications just like full-size laptops. Now, after several false starts, the initial versions of these new handhelds--called ultra personal computers, or UPCs--are beginning to hit the market.

Executive road warriors are the target market for San Francisco's OQO, founded by a team of former Apple engineers who helped create the Titanium PowerBook laptop. Launched in 2000, OQO unveiled a stylish prototype in early 2002, but production has been delayed for more than two years. OQO now says its nearly $2,000 UPC will be ready this fall.

Intended primarily for military and industrial users, Denver-based Antelope Technologies's ultracompact PC is built around a "mobile-computing core" containing a Transmeta processor and a 20GB hard drive. The core slides into specialized chassis--like a ruggedized handheld or a desktop docking station--which together cost $3,970. Clients include Boeing, General Dynamics, and the U.S. Army. Antelope president Kenneth Geyer says it's been hard to secure motherboard components: "Sales are outpacing our ability to build."

Other startups, including Silicon Valley-based Tiqit Computers and Vulcan, backed by Paul Allen, have also struggled to get their products to market. Tiqit's machine is pitched for use by military and homeland security personnel, which helps explain its oversize-BlackBerry appearance. Vulcan hasn't announced a release date, but the company claims that its FlipStart device will be ready by year-end.

Will users reach for the new devices? Analysts are skeptical. IDC believes the small screens and high cost will limit enthusiasm and has forecast sales of 50,000 units this year and 1.6 million by 2007. More widespread acceptance may await second-generation products, like UPCs rumored to be under development at Sharp and Sony. As Research in Motion and Palm did with their innovative handhelds, today's pioneers hope to get a head start before bigger players arrive. -- BRIDGET FINN