Pocket PC Gains Adherents As Handheld Market Ebbs.

THINGS are not looking good in the handheld market, but that hasn't stopped Hollywood-based Multimeteor Inc., a trade show organizer, from forming the first-ever Pocket PC Summit in Los Angeles.

The October event showcases Microsoft Corp.'s Pocket PC software platform, the most popular for handhelds after Palm Inc.'s version.

Pocket PC has a long way to go before it catches up to Palm, but it's only a matter of time before that happens, said Multimeteor Chief Executive John Tidwell. "Pocket PC is going to dominate and proliferate."

Perhaps, but things don't look too promising at the moment. Worldwide shipments of handhelds have fallen 21 percent this year from first quarter to second quarter, and analysts said price wars between Handspring Inc. and Palm are hurting sales at both companies.

Unlike those handheld firms, the Pocket PC Summit targets the corporate customer. The goal of the event, according to Tidwell, is to "enable key decision-makers and developers to better realize all the ways Pocket PCs meet their needs by enhancing the productivity and profitability of their business."

Handhelds running Pocket PC are made by Hewlett-Packard Co., Compaq Corp., Casio Computer Co. and Toshiba Corp., among others, and are popular with businesses because they are easily linked with other Microsoft PC-based programs, including Word, Excel and Outlook.

Palm sees Microsoft as its biggest threat because of Microsoft's ability to overpower competitors -- even when it comes late to a market. Recent estimates place Palm's market share at 75 percent and Microsoft's at around 25 percent.

There's also a new player that could emerge as a summit-worthy competitor: Linux. Developed by a global network of developers and led by famed Finnish programmer Linus Torvalds, the software could turn up in handhelds later this year. Linux previously has been earmarked for PCs and servers, but several electronics makers like Sharp Corp. have said they intend to offer Linux-based handhelds.

Linux is an open source operating system, meaning the code is free and available to software developers who can improve on the programming instructions used to create it. As a result, computer makers don't need to pay licensing fees to put the software in their handhelds. For Palm and Microsoft, that means added competition.