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MS scratches Compaq's back by restricting PocketPC licences

The mutual aid society freezes out Asus

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Computex The Computex tradeshow in Taiwan has thrown up some very nice examples of PocketPC - aka Windows CE 3.0 - PDAs.

Mitac won a show award for its kit; Asus had some nice models as well as WinCE handheld PCs; and Compal was showing off its range.

These are just the kind of thing system builders and resellers will spy on a foreign buying trip and import. But it is unlikely they'll do anything with these manufacturers products.

The root of the problem is why you'll be unlikely to see any mass market PocketPC PDAs from anyone other that the big name vendors - Compaq, HP, Toshiba et al.

Asus can't get a Microsoft PocketPC licence. Though its PDAs and handhelds were running WinCE 3.0, none of them had any of the MS applications. The kind of things consumers want to make the products worth buying. The guy on Asus' stand was throwing his hands up and saying "Why won't they give it us?"

Maybe he should chat to Compal. There are two Taiwanese manufacturers which have a MS Pocket PC licence - HTC who make Compaq's iPaq and Toshiba's PDA - and Compal. Compal wouldn't say who it manufactures for, but it will be selling its PDAs in the UK under its Palmax brand.

Compal is just sorting out its UK distribution now and is pushing for Peripheralcorner.co.uk to handle the business. But they have to be approved by Microsoft, according to Compal. "Whoever we sell to have to get approval from Microsoft," said Marc Plumb, Compal sales manager.

So Microsoft is restricting manufacturer licences for PocketPC PDAs and has veto over vendor sales channels.

Why? Well it owes the original PocketPC boys, and particularly Compaq, a big fat favour. "Microsoft depended a lot on Compaq's iPaq to make PocketPC successful. It owes it a lot," says Plumb. PocketPC sales hit one million in its first year and sales of iPaq rocketed 1017.9 per cent during the first three months of 2001 compared to the same period last year, according to figures from UK-based market watcher Canalys.

Compal is included in the inner circle of PDA vendors and Plumb says its product is sold into vertical markets so its not competing with the iPaq. Just as well. Peripheralcorner may be superb at their job but they're not a big name in the UK so it would be difficult for Compal's Palmax' to give iPaq a run for its money.

This situation isn't going to ease any time soon. Compal doesn't expect licensing restrictions to be lifted this year.

As for Mitac - its display models were running Internet Explorer and Word. The company says its investigating European distribution but communication breakdown prevented us from finding out if it had a MS licence, or approved distributors. ®

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