November 18, 1999 Web posted at: 10:02 a.m. EST (1502 GMT) by Terho Uimonen

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LAS VEGAS (IDG) -- Everex Systems, one of the original backers of the handheld Palm-size PC devices based on Microsoft's Windows CE operating system, has decided to call it quits.

As part of a larger corporate restructuring, Everex will pull out of the Windows CE market to instead renew its focus on desktop PCs, a spokesman for Leo Systems said this week at the Comdex show. Leo Systems is a sister company of Everex, both of which are affiliated with First International Computer Inc., a Taiwan-based PC maker.

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• Acer, Widcomm team on Bluetooth devices • Biometric solutions unveiled at Comdex • Everex drops Windows CE product line • Olympus's wide-screen headset • Comdex: Panel upbeat on imaging's future • Sun's McNealy delivers Microsoft jokes, predicts future • Comdex: Mobiles to do more than phone home • Red Hat ready to increase Linux service • Be Inc. advances Net devices strategy • Home networking options converging More COMDEX 1999 stories
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Philips, Everex, and others have dropped their Windows CE PDA lines. Is CE a lost cause? Yes No View Results

Everex is the second vendor to abandon the Palm-size PC arena. Philips Electronics NV last month also announced that it will phase out its Nino line of handheld Windows CE devices.

Windows CE-based handhelds have struggled to gain market share from competitors such as the popular Palm devices from 3Com Corp.'s Palm Computing Inc. subsidiary. In the personal companion category, in which market researcher International Data Corporation (IDC) includes both Windows CE and PalmOS devices, Palm has over 70 percent market share, according to the Framingham, Massachusetts-based market researcher.

"One of the hot issues in the SHD (smart handheld device) market is the war for developers, who or which operating system is going to attract developer support," said Diana Hwang, a program manager at IDC.

To attract users, devices need to offer an attractive range of services, which requires a critical mass of developers creating software and services, noted Hwang. "Developers go where the volume is, and right now Palm has the volume."

Everex's pullout was not entirely unexpected. Although the vendor earlier this year announced that it would bring to market a color version of its Freestyle Palm-size PC device, the company never released the product.

Leo Systems, however, will continue to sell Leo-branded Freestyle Windows CE devices in China, Hong Kong and Taiwan, the company spokesman said today.

"The color version is selling quite well in China, " he added.