Fall Technology Guide Sure, the PC industry is in a slump--but innovation hasn't faded. In that spirit, we've harvested the season's brightest new goods.
By Peter Lewis

(FORTUNE Magazine) – Tablet PCs

Something old is new again. Microsoft is introducing its Windows XP Tablet PC Edition software, which allows people to control a portable computer with a digital pen instead of a keyboard or mouse (and includes handwriting recognition). Nearly a dozen hardware makers are bringing Tablet PCs to market this month, but not IBM or Dell--perhaps because they remember the Apple Newton and other disastrous attempts to move pen-based computers into the mainstream. Some of the new Tablet PC machines are "convertibles" like the Acer TravelMate 100 (center). One moment it operates like a traditional laptop with a keyboard, and the next its screen swivels to become a writing surface. Other Tablet PCs are "slates"--like the Fujitsu Stylistic 3500 (top) and the Compaq Tablet PC TC 1000, (bottom)--which rely mostly on pen input. The new computers are expected to appeal to business users for situations in which typing isn't practical: warehouse workers tracking inventory, doctors on their rounds, lawyers annotating text documents with handwritten comments, and executives taking notes that either can be converted to text files or stored in their original handwritten form as searchable "digital ink" files. Microsoft's handwriting recognition is better than the Newton's, but it is stew for Tom I operate reliable.... Oops, let's try writing that again: It is still far from 100% reliable, especially for people with quirky penmanship. Even so, Microsoft is going ahead with the Tablet PC launch, stressing that handwriting recognition is not the primary application. Instead, Microsoft says, Tablet PCs will be most useful when paired with new pen-enabled versions of existing applications like Excel and Word. If you can write a check for $2,000 or more, a Tablet PC may be for you.

How to Pick a Computer

Shopping for a new PC today is almost as confusing as it was when personal computers first emerged a quarter-century ago. Here's how to decipher some of the jargon you may encounter, and my thoughts on choosing a capable midrange machine.

Desktop

The goal: A solid, all-purpose Windows-based system for less than $1,500 that's well suited for e-mail, word processing, music, digital photos and movies, 3-D games, and the Internet. If Windows were not a requirement, the choice would be easy: Apple's flat-panel iMac. But for those who prefer the road more traveled, I chose the Dell Dimension 4550. Let's break down this $1,357 model:

Operating system

Microsoft Windows XP Home Edition is standard for home PCs these days. If you use a laptop or connect your PC to an office or home network, however, Windows XP Professional is better.

Monitor

Like other vendors, Dell tries to entice buyers with deals. It recently offered web shoppers, at no extra charge, a 15-inch liquid-crystal display (LCD) instead of a standard 17-inch cathode ray tube (CRT) monitor. The screen size is the same, but the LCD takes up less desk space, uses less energy, and is easier on the eyes.

Processor

I chose an Intel Pentium 4 at 2.4 gigahertz with a 533-megahertz system bus and 512K L2 cache. The Pentium 4 is a workhorse, and 2.4 GHz, while not the fastest chip available, is plenty fast. Budget systems use the lower-powered but cheaper Intel Celeron. Intel's archrival AMD offers the Athlon XP, the Athlon, and the Duron. There is no downside to choosing AMD; same performance, lower price. Processor speed is overrated, but a P4 at 2.0 GHz or an Athlon at 1.8 GHz should be your minimum these days. You can ignore the system bus numbers; there will not be a quiz. The L2 cache is a special memory subsystem that can speed overall performance; 512K is very good.

Memory

My Dell comes with 256-megabyte DDR SDRAM at 333 MHz. Although many budget-priced PCs come standard with 128 MB of random access memory (RAM), you should get at least 256 MB, or even more if you want better performance. If you can afford it, go with 384 MB or 512 MB. SDRAM (synchronous dynamic RAM) is pretty much standard. DDR means double data rate, and it's better. RDRAM (the first "R" is for Rambus) is the best bet for serious multimedia tasks like video and audio, but it's more expensive.

Hard drive

My choice was a 60-gigabyte, Ultra ATA/100, 7,200-rpm hard disk drive. Don't go smaller than 40 GB, and get 80 GB or more if there's a chance you'll become seriously interested in digital photos or video. The other mumbo jumbo refers to the performance of the drives. Ultra AMA/100 has a peak data delivery speed of 100 megabytes a second, which is better than 66. Some cheaper drives spin at 5,400 revolutions per minute; avoid them.

Optical drives

The CD-RW is the new floppy. It's useful for making backups and recording MP3 music. Dell had a special giveaway on DVD-ROM drives when I was shopping, so I added one free. Otherwise I would have popped for a combo drive that plays DVD movies and also writes CD-RW discs.

Ports

The new standard is USB 2.0, which is 40 times faster than the older USB 1.1. I wouldn't compromise here. Add IEEE 1394 (also known as FireWire or iLink) if you're seriously into digital music, photography, or video. Make sure you get built-in Ethernet, required for high-speed Internet access.

Media Mogul

As with the Tablet PCs, others had the idea for a media-center computer long before Hewlett-Packard and Microsoft teamed up to create the HP Media Center, introduced last month. Sony, for example, has VAIO computers that can receive, display, and record television shows, act as a jukebox for digital music, display digital photography slide shows, and perform as a desktop home theater for DVDs.

But unlike the Sony models, the HP Media Center PC, using the new Microsoft Windows XP Media Center Edition operating system, makes users forget, at least temporarily, that they're using a PC. Other PC makers will adopt the operating system eventually, but for now HP is the only show in town.

As a multimedia computer, the HP has some serious chops: a 2.66-gigahertz Pentium 4 processor, 512MB high-speed memory, a 120-gigabyte hard disk, a combo CD-ROM reader and CD-RW DVD+RW drive, a high-end videocard with a built-in TV tuner, a surround-sound audio card plus a dynamite Klipsch six-piece surround speaker system, two FireWire and six USB 2.0 ports for connecting nearly any type of multimedia device, plus front-loading slots for all the standard removable memory card formats used by digital cameras, PDAs, and MP3 players. It's good-looking, too, with a silver-and-midnight-blue color scheme.

Microsoft's software is impressive, replacing the familiar Windows desktop with a clean menu design whose choices--My TV, My Music (above), My Pictures, My Videos, and Play DVD--are all tightly integrated into the operating system. The remote control conveniently works from across the room.

But here's My Gripe: The $1,600-to-$2,000 cost of the Media Center PC does not include a monitor. My Frustration: Once you hook up a monitor or a TV set, the television picture coming through the PC is worse than you'd see on a regular TV set. My Confusion: Where would you put this contraption, with its snarl of cables? According to My Wife, it won't be in any part of the house where visitors might see it. Not that I'd want to invite a bunch of friends over to watch the small screen. HP thinks college students, apartment dwellers, and others in confined places will be the main audience for what is essentially a desktop home theater.

The most interesting thing about the Media Center PC is how Microsoft's software breaks away from the typical Windows keyboard-and-mouse paradigm. Of course, if you want to use the Media Center PC as a conventional Windows computer for such tasks as word processing, web surfing, and e-mail, it can do those things too. Microsoft and HP deserve credit for trying something new to reinvigorate the PC market. But do they deserve your money? Not yet.

My Advice? Wait for Act II.

All Together Now

Many companies have tried the all-in-one concept. Apple made it popular with its beachball and longneck iMacs. On the Windows side, an attractive challenger is the wide-screen LCD-based Sony VAIO PCV-W10 (near right). At $1,600 and up, it's a pricey but solid multimedia machine that takes up a minimum of desk space--19 inches wide and just 7.5 inches deep, thanks to a foldup keyboard. The VAIO W10's weak spot is its Intel Celeron 1.6-gigahertz processor, but other specs are more impressive: a 60-gigabyte hard drive, 512 megabytes of DDR SDRAM, a DVD-ROM CD-RW combo drive, two FireWire (Sony calls it iLink) high-speed connectors along with three USB 2.0 ports, plus slots for two PC Cards and a Memory Stick. It's a good choice for people who want a slim, Windows-based unit for music, movies, and ordinary computing applications.

Gateway's Profile 4 (above left) is targeted at people who might be considering a switch to the iMac but who want to stick with Windows. Four models are offered, ranging from the basic $999 Profile 4SE, with a 15-inch LCD, to the fully tricked-out Profile 4XL ($1,999), which has a 17-inch screen. I'd skip the entry-level 4SE and consider the 15-inch Profile 4S Plus ($1,239), which has a 1.7GHz Celeron processor, 256MB DDR SDRAM, 40GB hard drive, and CD-RW drive.

Lap of Luxury

After enduring a few multicity business trips, most executives vow to lose weight--and it has nothing to do with all those expense-account meals. Rather, they want to ditch their heavy laptops for something sleek and lightweight, like the IBM ThinkPad X30 ($2,000 and up, way up). It's comforting that IBM hasn't changed the X Series ThinkPads much over the years, except to make them better. They're still black, still weigh less than four pounds, still manage to be both elegant and rugged, and still have the best keyboards of any notebooks. The X30 is about an inch thick, comes with 256 MB of RAM, and a 40-gigabyte hard drive, and has a 12.1-inch XGA color screen, just about the optimum size when you want to work on an airplane. With an extra six-hour battery slice ($189), it will go coast to coast. Unlike the flagship ThinkPad T30, which is arguably both the best and the most expensive laptop around, the X30 uses a relatively mundane 1.2-gigahertz Intel Mobile Pentium 3 chip. It's a tradeoff: Notebooks with brawnier chips often pay a penalty in power consumption. Through a combination of built-ins and add-ons, users can connect the X30 in nearly every way: Ethernet, FireWire, Bluetooth, infrared, WiFi, parallel, USB, and Compact Flash. It's sure to impress the new federal airport-security guards.

Thin Is In

We know that liquid-crystal displays look good (thin, minimal hogging of desk space) and that they're good for us (no flicker, less energy consumption, no harmful radiation). We also know that prices for LCDs have drifted downward recently, making them a more attractive alternative to conventional cathode ray tube (CRT) monitors.

What we didn't know until recently, when the Samsung Syncmaster 172T 17-inch display ($869) came along, was just how good these skinny displays are getting. Yes, it's one of the most attractive LCD displays on the market, sleek and silver, and it can either sit on the desk or be mounted on a wall. But the beauty is more than screen deep. With both analog and digital inputs, it's versatile. The 172T's native resolution of 1,280 by 1,024 is scrumptious. The contrast ratio of 500:1 delivers darker blacks (and thus more pleasing images) than nearly all the other LCDs out there. The viewing angle is wide, which means all your friends can admire it at once. Response times are quick enough that it can handle DVD movies and fast-paced 3-D games almost as well as a CRT. (Here's a tip: When you compare LCDs side by side at the local electronics store, get them to show an action DVD instead of the dorky fish-in-aquarium screen savers they always use. Then look closely for ghosting, bad pixels, and other problems.)

Gazing into the limpid eye of this flat-panel beauty from Samsung, one almost stops caring that it costs more than three times as much as a good 19-inch CRT.

Paper Tiger

The fall colors are especially bright this year in the printer category, thanks to products like Canon's i850 ($199). I've been impressed by high-end photo printers like the Canon S9000 ($499) and the Epson Stylus Photo 2200 ($699), but it's always nice to save some money. The new Canon i850 has emerged as one of the best multipurpose inkjet printers on the market, able to deliver excellent photo-quality prints and business-quality text documents with equal aplomb, at nearly laserlike speeds. For color photos its maximum print resolution is 4,800 by 1,200 dots per inch. A borderless four-inch-by-six-inch print comes out in less than a minute, and an eight-by-ten takes about 90 seconds. The photo print quality is especially impressive considering that this model uses only three color cartridges plus black, instead of the six that some photo printers are now using. The trick, Canon says, is producing two-picoliter ink droplets (translation: very teensy-weensy) and laying them down with exquisite precision. Each color comes in its own reservoir, which over time leads to lower overall cost for ink supplies. The color stuff is cool, but the i850 is also a superior printer for black-and-white office documents, at speeds up to 22 pages per minute. It all adds up to bolster Canon's reputation as the new pacesetter in the inkjet market.

Traditionally, that has been Hewlett-Packard's turf. And one area in which HP continues to shine is multifunction printers, especially with the new OfficeJet d135 (about $500). It combines a flatbed scanner, speedy printer, and color copier.

See Hear

The telecom industry may not have much good to talk about these days, but you wouldn't know it based on the latest batch of mobile telephones. Phones are evolving faster than nearly any other realm of consumer electronics. So far this year we've seen brighter color screens, built-in digital cameras and MP3 players, web browsing, Bluetooth networking, convergence with personal digital assistants (PDAs), polyphonic ring tones, Microsoft's entry into the phone business, the less-than-smooth path to high-speed data over third-generation (3G) networks, and other mutations. But a few of the new handsets really ring my chimes, especially the Samsung SPH-a500 flip-phone (about $300, plus service plan offered by Sprint PCS Vision). One of the key features of this clamshell phone is its vibrant color screen, among the best I've seen. Color displays will become increasingly important as phones move into the 3G world, which allows relatively fast wireless transfer of data files including web pages, games, digital pictures, and video. The a500 has a separate external (monochrome) LCD for displaying Caller ID information without opening the phone, and the keys have a blue backlight.

Talk time is around two hours; in standby, it's not quite a week. It's a dual-band, tri-mode phone (CDMA 1900, CDMA 800, and analog AMPS 800) with voice-activated dialing. Good touch: The phone menus are bilingual; choose English or Spanish. Hola!

For those who want their phones to be smart as well as bright, the new Kyocera 7135 Smartphone ($499) is definitely worth checking out. It combines a phone and a Palm-based PDA.

PDA War

One of the truths we have long held--that PDAs based on the Microsoft Pocket PC operating system cost more than those based on the rival Palm OS--is slipping through our fingers. The price gap has narrowed with the recent introductions of low-cost Pocket PCs from Toshiba (the e310, around $350) and the even better Viewsonic V35 (about $250). And Dell is rumored to have a still lower-priced Pocket PC up its sleeve for introduction just days from now. These newcomers are putting the squeeze not just on Palm but also on HP/Compaq, whose pricey iPaq is the category leader. But at the same time, curiously, we're seeing brand-new Palm OS-based devices that cost more than Pocket PCs, like the forthcoming $599 Sony Clie and the $499 Palm Tungsten T.

The Tungsten T is Palm's last-ditch attempt to hold the high ground. Built around Palm's new OS v5 and a new Texas Instruments-enhanced ARM processor, the Tungsten's cover slides open to reveal a Graffiti writing area and slides shut again to keep a short profile. A high-resolution color screen (320 by 320 pixels), built-in Bluetooth wireless connections, and the ability to record voice files and play back stereo MP3 files are all indicators that Palm isn't surrendering to the Pocket PC onslaught. When used with a Bluetooth-enabled phone, like the Sony Ericsson T68i, the Tungsten can send and receive e-mail and connect to the Internet. Word, Excel, and PowerPoint files (managed by DataViz software) can be squirted wirelessly to Bluetooth-enabled printers, like the HP Deskjet 995C.

The new Palm Zire ($99), meanwhile, seems safe from the price wars. It's the cheapest Palm, basically an auxiliary memory device for people who currently use paper-based organizers.

Megacool

This is the year that digital cameras crossed over and not only outsold conventional 35mm film cameras but also outperformed them. Although two-megapixel and three-megapixel digital cameras remain the main focus of consumers, a new crop of affordable 4MP and 5MP cameras are coming into range for amateur shutterbugs, including the high-quality point-and-shoot Nikon CoolPix 4300 ($499).

The four-megapixel CoolPix 4300 basically adds a million or so pixels of resolution to last year's popular CoolPix 885 and changes the body to silver from black. The improvement in picture quality is eye-opening. The 3X Nikkor optical zoom lens is better than most, and the camera itself is small but comfortable to hold. Beginners will find it easy to shoot with 12 programmed scene modes; optional controls are there for more experienced amateurs. Thumb in the eye: Nikon keeps sending out new cameras with dinky 16MB Compact Flash cards, which become less useful as camera resolution (and thus picture file size) increases.

Speaking of big file sizes: Film experts disagree on the point at which the resolution of a digital photograph matches or exceeds that of traditional 35mm film. But one thing is clear: the new 14-megapixel Kodak DCS Pro 14n ($4,000, body only; uses Nikon F-type lenses), which uses a 35mm-size sensor, is going to make some professionals think twice about buying another film camera.

Nice Mice

Michelangelo made great works of art using hammers and chisels, but even he would find it a struggle to create beautiful computer drawings using a clumsy PC mouse. The Wacom Intuos2 digital pen and graphics tablet ($350 for the six-by-eight-inch model) is a versatile tool for artists. It comes with a precision cordless mouse as well as a pen.

The Logitech Cordless Elite Duo keyboard and mouse combo ($100) is compatible with Windows and Macs. It has the usual array of keyboard shortcuts for navigating the web and computer applications, and the optical mouse is precise. I like it, however, because it's attractive and comfortable.

With its silver finish, the Kensington Studio Mouse ($66) is the best-looking mouse in town. But it's also a pinpoint-accurate cursor controller, and it has a unique solid-state scroll wheel.

The SanDisk Cruzer ($50 to $200 depending on capacity) is the only key-chain USB flash storage device I've seen that has removable and upgradeable memory-storage cards. It uses 32MB, 64MB, 128MB, and 256MB SecureDigital and MultiMedia Cards for storing everything from a simple document to a big PowerPoint presentation.

Some notebook PC users hate trackpads. Some hate the pointer sticks embedded in the keyboard. Some of us hate both. Luckily for us, the stylish red-and-silver Microsoft Notebook Optical Mouse ($35) is easy to pack and works on nearly any surface, including a pant leg (your own, we hope).

Toys Will Be Toys

The Toshiba SD-P2000 Portable DVD Player ($1,000) packs nearly all of the best features of full-sized DVD players into a 1.75-pound package. It's the only progressive-scan portable on the market, delivering superior image quality on the 8.9-inch, wide-screen LCD. The P2000 also plays audio CDs and CR-RWs, including MP3 files and DVD Audio.

The Panasonic DMR-HS2 DVD and hard-disk recorder ($1,200) is a double threat. It records from your digital videocamera onto blank DVD-RAM or DVD-R discs, but it also has a built-in 40-gigabyte hard-disk drive for capturing more than 50 hours of programming from your TV, a la Tivo or ReplayTV.

The JVC HM-DH30000 high-definition VHS player/ recorder ($2,000) is a good, if limited, solution for people who want to show off the possibilities of their new HD-capable TV sets but can't find anything to watch. It plays prerecorded movies in D-Theater HD format ($35 to $40 each, when you can find them).

Creative's newest MP3 player, the Nomad MuVo ($130 for the 64MB version, $170 for the 128MB version), doubles as a USB-storage device for your PC. The two-piece system is small enough to keep on a key chain, and holds an hour or two of digital music. Downloading your PC tunes into the MuVo is literally a snap.

Code of Honor

Consolidating its monopoly in the PC operating system world, Microsoft appears to be adding new editions faster than you can say "Harry Potter." There's the Tablet PC Edition, the Media Center Edition, the Pocket PC Phone Edition, and the Whatever We Want to Conquer Next Edition (not really). But the Colossus of Redmond, Wash., does not have a monopoly on innovation. The most impressive new software so far this year is Apple OS X version 10.2, also known as Jaguar. Starting next year, all new Macs will be built around Jaguar ($129 for those upgrading from earlier versions).

Why is this important in a world where some 95% of new computers carry the Windows banner? Networking. With version 10.2, OS X makes it easy--or at least easier--for Macs to integrate into Windows networks. Macs have long had file compatibility with Windows software, but now they have network compatibility too. And that makes it less of a barrier for people to try Apple's other innovative programs, like iTunes, iMovie, iDVD, iChat (which works with AOL Instant Messenger), and the brand-new iCal and iSync, which work only with Jaguar. To take full advantage of iCal and iSync, you'll need to subscribe ($99 a year) to Apple's .Mac online service.

iCal allows a single Mac user to keep track of appointments and to-do lists, of course, and it does so better than any other calendar program I've tried. But it also allows collaborative calendars, overlaying the schedules of different family members or co-workers in an easy-to-see manner. Calendars can be shared over a network and posted on the web for invited others to see. The user is notified of upcoming events by e-mail or text messages to a mobile phone or pager.

While iCal allows information sharing among groups of people, the new iSync program, which also requires Jaguar, allows sharing of a user's information among different devices, like other Macs, mobile phones, Palm-based PDAs, even the popular iPod portable music and data device. Say you've got a Mac at home and a Mac at the office, and an iBook for traveling. With iSync, you can make sure that if you add a new contact or calendar item on one machine, it's automatically updated on all your other iSync-compatible devices.

The Windows-Mac debate has been going on for years, but it's not the only epic struggle in the software world these days. Two of the more interesting battles involve Microsoft in the uncharacteristic position of underdog.

In personal finance, Intuit's Quicken and Microsoft's Money have just come out with 2003 versions. Both are excellent, which means if you have one already there's no real reason to switch over. For people just getting started with managing finances and PC-based banking, however, I'd give a slight edge to Money 2003 ($40 after rebate).

But the year's biggest confrontation is the nearly simultaneous release last month of AOL 8 and MSN 8. After testing trial versions, I give credit to both for their improved barriers against junk mail and their better parent-controlled safeguards for children on line. (AOL Time Warner is parent to FORTUNE's publisher.)

I like AOL's latest version for several reasons, including a new feature that monitors live discussions going on in chat rooms for key words of interest--to find out , say, if anyone is yakking about banjos. But overall, I give this round to Microsoft. MSN 8 costs less than AOL ($21.95 a month vs. $23.90 for AOL), offers more, and does a better job with screen design, junk mail, and parental controls. On the other hand, most people don't want to give up their AOL e-mail addresses, and AOL 8 is good enough that they don't have to.

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For more tech advice, see Peter Lewis's weblog at www.fortune.com/ontech.