Will the Tablet PC be a write-off?

Can a new type of device topple the mighty PC? Bill Gates apparently thinks so.

The Microsoft Corp. chairman has predicted that the Tablet PC, which was formally launched today, will account for the majority of PC sales within five years. Success for the new device is far from assured, however, and time will tell whether a change in the way we use computers is in our midst, analysts and industry insiders said.

When the software giant pulls the covers off of its Windows XP Tablet PC Edition operating system, which will power the new device, there will be few surprises in store for end users. The pen-based operating system and prototype Tablet PC devices have been in the media spotlight for the past year and, with the exception of a few systems shown quietly to press and analysts, the specifications and features of many devices, like Acer Inc.’s TravelMate C100 convertible laptop, are already well known.

The only real question that remains is whether Gates’ prediction will come true, or if the Tablet PC will go down in history as another unsuccessful attempt by the Redmond, Wash., software company to drag pen-based computing from its comfortable home in niche vertical markets, such as hospitals and delivery companies, and into the mainstream.

Despite Microsoft’s best efforts to push the Tablet PC as the future of computing, not everyone in the industry is convinced that success is guaranteed. “I think it is really unknown at this point how big the market is,” said Michael Dell, chairman and chief executive officer (CEO) of Dell Computer Corp., which so far has no plans to ship a Tablet PC device of its own.

“Dell, of course, likes to participate in high-volume markets, and until we can determine the size of the market we are not ready to decide at what level we will participate,” he said, speaking to the IDG News Service in Tokyo.

Others are more optimistic. “I think tablets will be a very compelling usage model,” said Anand Chandrasekher, vice-president and co-general manager of Intel’s Mobile Platforms Group. “Over time, it is my expectation that the capabilities of tablets will permeate all form factors in the mobile market.”

One vendor that expects to see big payoffs from the Tablet PC is Acer, in Taipei. Its TravelMate C100, which includes a monitor that can be swivelled 180 degrees to convert from a laptop into a tablet, was one of the first designs to appear and has since made its way into the hands of executives at Bank of America Corp. and 7-Eleven Inc.

“I see this really as an opportunity for us,” said Stan Shih, Acer’s founder and chairman, estimating that the company could see more than 20 per cent of its laptop revenue in 2003 come from Tablet PCs.

The attempt to bring pen-based computing to the masses has been tried before. Microsoft’s first big push came during the ’90s with the introduction of Windows for Pen Computing, which essentially rolled support for pen-based input and display into Windows 3.11. Windows 95 also offered some measure of pen-computing support, but pen-based computing never managed to become more than a niche area.

Part of the reason why earlier attempts at using pen-based input failed was limited processing power. Without enough horsepower for “active” pen support, which allows users to input information such as handwriting, makers of pen-based computers instead turned to “passive” support, which lets users conduct simpler tasks, such as pushing buttons.

“The performance of PCs at that time was not enough, so you could not use active pen; so it shifted towards a passive pen,” said Yuji Isobe, general manager of the Ubiquitous Platform Division at Fujitsu Ltd., which has announced plans to sell a Tablet PC device.

With the Tablet PC’s active pen capabilities, Microsoft is pushing for much more than previous attempts at pen-based computing allowed. In particular, the company is hoping that handwritten data, which it calls ink, will become a primary data type, rivaling the ubiquity and usefulness of even ASCII text. Ink allows users to jot down notes on their Tablet PCs using applications like Microsoft Journal or Word 2002 and then manipulate that data in several ways, such as cutting and pasting between different applications or searching for specific keywords.

Microsoft has been careful not to overstate the Tablet PC’s handwriting recognition capabilities. Handwriting recognition has always been a problem and the company has been quick to point out that if users can’t read their own writing at times, a computer is not going to able to recognize it either.

One problem with Microsoft’s efforts to push the adoption of ink is that only a few third-party software vendors, including SAP AG and Corel Corp., have so far announced plans to support the Tablet PC. In addition, the first version of the Tablet PC will only offer support for English, German, French, Korean, Japanese and Chinese (traditional and simplified versions), which means that users in Latin America, South America and parts of Europe won’t initially have access to Tablet PC in their native languages.

“The lack of language support will definitely slow down tremendously the broad market,” said Louis Jouanny, vice-president of marketing and strategic development for the Mobile Pen PC Division at Fujitsu Siemens Computers.

For Acer, the lack of broad European language support in the initial Tablet PC release will affect the company’s sales in European countries where it has a strong presence, such as Italy.

Despite limited language support and limited backing from third-party software makers, Microsoft is pushing hard to see the Tablet PC become a success. With its vast reserves of cash and industry clout, its attempts to popularize pen-based computers with mainstream users may yet pay off. But there’s still work to be done, even in markets such as healthcare, where pen-based computers already enjoy a comfortable niche.

Dr. John Halamka is a prime target for Microsoft. The chief information officer of CareGroup Health Care Systems, he is responsible for IT equipment used by some 3,000 doctors and 12,000 staff at six hospitals in the Boston area. Tablet PCs are attractive to him because doctors, who have notoriously bad handwriting, need a foolproof way to record data about medicines, dietary needs and other patient requirements.

The screens of handheld computers like Hewlett-Packard Co.’s iPaq are too small for the order-entry applications that doctors use, he said, and a computer that can be carried around like a clipboard with wireless connectivity would be ideal.

“The sweet spot for doctors is to give them something the size of a clipboard that doesn’t weigh as much as a laptop,” he said.

They currently use Dell c400 laptops which are wheeled around hospitals on trolleys, but ideally healthcare providers need a computer that’s “somewhere between an iPaq and a sub-notebook,” Halamka said.

The first incarnations of Microsoft’s Tablet PC might not make the cut, however. For starters, at around 3 pounds they will likely be too heavy – doctors need a device that weighs 2.5 pounds or less, Halamka said. And with expected price tags of around US$2,000 they will also be too expensive for widespread use; the hospital needs something priced at about US$1,000, he said.

“The second generation of the Tablet PC is probably what we’ll really want,” Halamka said.

– With files from James Niccolai, Martyn Williams and Joris Evers, IDG News Service