Gateway handheld plans still up in the air

After putting its plans to release a PDA on hold last August, Gateway Inc. still hasn't decided when, or if, it plans to release such a device as part of its push into consumer electronics, a spokesman said Wednesday.

The Gateway 100X was given a prominent place among Gateway's plans to introduce 100 new products in 2003. The Poway, Calif., company talked up its product during Cebit America last June, and planned to release it in the middle of last year.

The product was "delayed indefinitely" in August due to some technical issues that needed to be ironed out, a spokeswoman said at the time. The PDA was supposed to run Microsoft Corp.'s Windows Mobile 2003 software and use XScale processors from Intel Corp., but Gateway did not release any other details about the product last year.

Gateway hasn't killed its PDA, but is looking at a wide variety of different technologies that might accompany an entry into the market, said Ted Ladd, a company spokesman. Those include Internet connectivity in the form of Wi-Fi or Bluetooth chips, as well as voice capabilities, he said.

"If we're going to do something, it has to be highly differentiated," Ladd said.

The market for PDAs based on Windows Mobile 2003 is increasingly a corporate market, and that clashes with Gateway's recent moves toward the world of consumer electronics, said Todd Kort, an analyst with Gartner Inc. The company might be better off developing a product based on the Portable Media Player concept pushed by Microsoft and other hardware companies, he said.

Some form of wireless technology would be a must in any Gateway PDA released this year, since both leaders in the Windows Mobile market offer wireless PDAs, Kort said. Hewlett-Packard Co. (HP) has a strong lead in the category, and Dell Inc. is in second place in its first full year of selling PDAs.

"Unless they put a lot of effort into industrial design, or do something special with it like the Sony (Corp.) Cliés, they're just not likely to be very successful against HP and Dell," Kort said. The Clié devices have hip and interesting designs, and support for video playback, among other things, he said.

A new release of the Windows Mobile operating system and new XScale processors from Intel are expected to improve multimedia application performance when they are released later this year. Ladd declined to comment on whether Gateway was waiting for the new hardware and software before it released a PDA.

Gateway was among the first PC companies to tackle the world of consumer electronics, but it continues to lose money on its PC business. It warned of a revenue shortfall for the fourth quarter in early January. The company reports fourth-quarter earnings Thursday.