The littlest personal computer: Windows CE pushes the envelope for handheld PCs.

Personal computer users who have contemplated buying the tiniest of all computers--a handheld PC (HPC)--now have the green light. Microsoft's release last fall of a new operating system for handheld computers should put the small PCs on the fast track, especially for the mobile computer user.

HPCs, which alternately have been called personal digital assistants, palmtops and PC companions, are the grown up offspring of handy, low-cost electronic organizers, used mostly to keep schedules and organize data. The new operating system, called Windows CE, is a mini-version of Microsoft's Windows operating system designed to extend the desktop. NPCs allow users to keep their most important business and personal data in their vest pockets or purses when they are away from their desks, as well as transfer and synchronize data between the home and office.

Windows CE includes so-called pocket versions of Microsoft Word and Microsoft Excel for functions such as data retrieval, spell checking, word processing and spreadsheets. It includes a communicatlons feature for accessing the Internet for and e-mail through Microsoft's Internet Explorer browser.

Because of the lack of a unified operating system, the market for handheld computing devices had been languishing until Microsoft's announcement of Windows CE last year.

HPC users no longer have to worry about being hemmed in by proprietary operating systems and limited software applications that characterize many personal digital assistants like Sharp's Zaurus or U.S. Robotics' Pilot. Seven key computer manufacturers--including Casio, Compaq Computer, Hewlett-Packard, Hitachi America and Philips Electronics--quickly jumped in and said they would build products for the operating system.

But don't expect a HPC to replace a laptop or desktop computer. The reason is size and power. Most handheld devices weigh less than 15 ounces, have four-inch screens, small 63-key keyboards and hold two to four megabytes of memory. The cost ranges from $500-$700, depending on features such as extra memory. Contrast the handheld with the power of a desktop computer with 16 megabytes of memory, a 14-inch monitor and a full keyboard, and there's no contest.

While a handheld user can transfer from the desktop an important document, quarterly sales figures or quickly send an e-mail, fax or find something on the Web, the device is much too small and lacks the power for full-blown presentations or complex financial analyses. But for a busy professional or executive who needs to check his or her e-mail in the airport, review a speech in the hotel room or confirm a personal schedule, the handheld comes to the rescue.

"They're not meant to be data creators but as data viewers," notes Diana Hwang, senior industry analyst for market researcher International Data Corp. in Framingham, Massachusetts. "But if you want e-mail, you don't have to carry your heavy notebook on the road. A handheld can do that."

Analysts believe Windows CE-equipped HPCs will prosper. International Data estimates that 867,000 units were shipped in U.S. in 1996, and will increase to 3.6 million by the year 2000. Scott Nelson, technical support specialist for Casio in Dover, New Jersey, which makes the Cassiopeia A-10 Windows CE handheld computer, says third-party software developers are rushing to write applications for Windows CE and more than 1,000 new applications will be available to handheld users by the end of this year. "Normally, if Casio was to come out with a product and it was our own operating system, you'd be lucky to have 10 or 20 [software] companies at the end of the first year to write applications for it," Nelson says.

"The Windows CE operating system also has prompted the hardware companies to be more creative in the features they add to the devices," says Mike McGuire, senior industry analyst for mobile computing at Dataquest Inc. in San Jose, California. Casio's Cassiopeia, for instance, can accept digital images from cameras. Hitachi's handheld has a speaker and microphone. And Compaq's Companion PC device adds a wireless messaging capability.

However, buyers should proceed with caution. HPCs are still in their first generation, so it will take some time before a full range of software applications are available and all the kinks are worked out. For instance, some handheld computer screens aren't backlit, which makes them hard to read. And while they can operate on two AA batteries lasting about 20 hours, use of an AC adapter is suggested to prevent power drains for heavy communications users. Also, none of the current configurations have a printer port for quick printing on the go. Compare the various features offered by the different HPC manufacturers before you make a decision.