Tablet PCs Stirring Minimal Interest

High cost and notebook inertia stand in the way of widespread deployment of Microsoft devices.

While Microsoft Corp. is touting its upcoming Tablet PC as the laptop of the future, corporate IT managers are less than convinced.

Microsoft officials told delegates at WinHEC here recently that the Tablet will become the laptop of the future, combining the simplicity of a sheet of paper with all the power of a PC and the convenience of a notebook.

In his keynote at WinHEC, Microsoft Chairman and Chief Software Architect Bill Gates said the portable PC form factor is a dramatic evolution. The Tablet will run Windows XP Professional, be thin and light (weighing less than 3 pounds), and have a high-resolution screen and a Universal Serial Bus port. Gates announced that Compaq Computer Corp., Fujitsu PC Corp., Acer Inc., Toshiba Corp. and Sony Corp. will be working with Microsoft as systems manufacturers for the Tablet PC, while Intel Corp. and Transmeta Corp. will provide semiconductor technology.

"While the market for this product will eventually be all laptop and PC owners, our initial focus will be on the knowledge worker in the productivity space," said Alex Loeb, Microsofts general manager for the Tablet PC.

But corporate IT managers may not be biting. Sule Walker, a network/systems administrator for the Systems Division at ITT Industries Inc., in Colorado Springs, Colo., which has thousands of laptops, said the Tablet PC is not at all compelling.

"My division alone has several hundred laptops, while the company as a whole has several thousand," Walker said. "We have found our staff to be quite productive with their laptops, so there is no reason to change."

There also appears to be some disconnect between the Tablet and other software projects from Microsoft.

Members of ITTs IT team were briefed on Microsofts .Net strategy and Windows XP at the Microsoft campus in Redmond, Wash., recently. "What is really interesting is that the Tablet PC was not mentioned once throughout the discussions and presentations, even though we are a Microsoft shop," Walker said.

Chris Gray, an IT consultant based in Santa Clarita, Calif., agreed that the Tablet is not something his customers and their staff will be interested in. "Handwriting recognition, which is simply not a compelling feature for us, does not have a good track record," Gray said. "It will take far more than this to make us think about giving up our laptops."

The issue most critical to the success of the Tablet PC will be price, and positioning the product at the higher end of the laptop market is a recipe for disaster, said Kevin Burden, an analyst at International Data Corp. who focuses on smart handheld devices. "What you have here is a new form factor that is coming to market at a high price and probably in a weakening economy—thats a combination for failure," said Burden, in Framingham, Mass.

Gartner Dataquest analyst Mostafa Maarouf, based in San Jose, Calif., agreed, saying that just 150,000 Web appliances shipped globally last year compared with the 22 million laptops sold. "I expect shipments of these Web appliances to remain small, at least in the short term, as their price is simply too high relative to the functionality they offer," Maarouf said.