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TECHNOLOGY February 2003

THE LIGHT STUFF
With tablet computing, Microsoft hopes to write a new chapter in PC history.
By Scott Liebs

Can the considerable marketing muscle of Microsoft Corp make of the old something new? "Tablet" PCs have been around for years, as anyone who has ever signed for a UPS package knows. But Microsoft believes that its new operating system - and a strong commitment to the devices from a sizeable range of major technology companies - can transform a niche product into a corporate must-have.

Microsoft is being careful to sell its Windows XP Tablet PC Edition, and, by extension, tablet PCs in general, as logical extensions of a knowledge worker's arsenal. At the November 2002 debut, Microsoft shared the stage with dozens of technology partners and corporate customers that were eager to explain why tablet PCs are perfect for meetings, sales calls, field visits, or any other on-the-run experience. Microsoft chairman Bill Gates went so far as to predict that within five years tablet PCs will outsell notebook and even desktop PCs.

The key difference between these new machines and ever-shrinking notebook computers is that tablet PCs, which can weigh less than three pounds, are designed to be useful even when optional keyboards are left behind, thanks to a pen-based interface that captures handwritten notes and provides the point-and-press experience of a PDA. And unlike earlier models, the newest generation is designed to do everything a conventional PC does, and then some.

That's where Microsoft comes in. Its tablet operating system, which won top honors at the recent Comdex trade show, not only brings standard desktop functionality to tablets, but also adds features, including "digital ink," a method of capturing and preserving handwritten notes. In emphasizing the system's ability to store handwriting as its own data type, versus translating it into conventional text as the Apple Newton and other devices have tried (and largely failed) to do, Microsoft is placing a sizable bet that customers will find this approach useful. The company argues that productivity will be enhanced: instead of bringing a legal pad to a meeting and scrawling notes, you scrawl them on your tablet PC. When you need them again you know where to find them (the system includes a search function), and you can e-mail them as handwritten notes.

Tablet PCs will convert handwriting to text, but Microsoft is talking up the idea of electronic ink as a replacement for paper, reminding people about all the annotating and editing and even doodling that they do, and suggesting that on a tablet PC these activities get the technological underpinning they've always needed.

Microsoft doesn't stop there, though. It has marshaled more than two dozen other software companies, from SAP AG to Franklin Covey Co, to modify their products for tablets. And it has worked closely with customers in many industries to understand just what tablet PCs are good at. At Bechtel National Inc, a team responsible for contract management used tablets to capture the necessary signatures, merge documents, and e-mail them to appropriate parties, a job that used to require the printing and faxing or scanning of hard-copy documents. Contracts manager David Methot says the pilot test was promising, and thinks the "grab-and-go" capabilities are well suited to an increasingly mobile workforce.

Keyboard Optional

Tablet PCs currently come in two basic varieties: dockable or convertible units that can play a role on the desktop (thanks to built-in keyboards) but then accompany a user whenever he or she leaves the office (hence grab-and-go), and "slates," which forgo keyboards (although attaching one may be an option) and serve as electronic notepads and web/e-mail access devices.

Analysts see a future for tablet PCs as viable replacements for current notebooks: since they can do everything notebooks can and offer additional features, then if the price is right, why not? (Toshiba Corp's Portégé line, another Comdex prizewinner, retails for US$2,299-2,499.)

The real questions are, will customers like them well enough to jump before current notebooks reach the end of their life cycles, and, far more important, will grab-and-go models become the de facto desktop machines for mainstream corporate use?

Plenty of ink, electronic and otherwise, will be lavished on speculation and on chronicling Microsoft's continuing efforts to make this newest version of its Windows operating system the grab-and-go standard.

Alix Nyberg is a staff writer for CFO in the US, CFO Asia's sister publication

Supply Chain Management: Tag Time?

Motorists use them to cruise through highway tollbooths, marathon runners rely on them to accurately monitor race times, and they can even help reunite a lost pet with its owner. Now radio frequency identification (RFID) tags may revolutionize supply chain operations by offering a superior way to track individual items compared with barcode labels.

A report released in October 2002 by UK-based AMR Research Inc says early adopters of RFID tags have cut supply chain costs by 3 to 5 percent and have achieved 2 to 7 percent increases in revenue thanks to the better inventory visibility the tags provide. RFID tags have made headlines recently because the cost of producing them has plummeted to as little as 15 cents apiece for some varieties. At that price, tagging individual items, whether parts or finished products, becomes viable for many companies. The tags are superior to bar-code labels because they don't require a line of sight between laser and label: contents within a crate can be "read" as it passes a scanner, even if everything within the box is fully packaged and each item is unique.

That provides new flexibility and power in terms of tracking parts and products from one end of a supply chain to the other. Pete Abell, AMR's director of research, global retail, points out another advantage: RFID-tagged products can be scanned at from 150 to 1,000 per second compared with one/two hand-scanned barcoded items per second, which can reduce warehouse labor by 20 percent. Simon Ellis, supply chain "futurist" at Unilever in the UK, says CFOs need to follow RFID advances because they will reshape IT infrastructures.

The Auto-ID Center, a not-for-profit global research program based at MIT and in Cambridge, in the UK, predicts RFID technology will usher in reduced transaction costs, shorter lead times for manufacture and delivery, a decrease in inventory, and improved product availability.

There are some roadblocks: while some types of RFID tags have become very inexpensive, they don't suit every application, and some tags can cost up to US$100 each. Metal and liquid can affect data transmission, although the installation of insulators can help prevent this. The tags can store more information than barcode labels can, but barcoding is cheaper and more firmly entrenched.

Of greater concern may be competing or still emerging standards. RFID chips rely on different portions of the frequency spectrum to send data. In limited applications this is no problem, but if companies want to achieve the broadest possible supply chain data sharing using RFID chips, interoperability becomes a bigger concern. In addition to the Auto-ID Center, the RFID Center of Excellence, launched this year by RedPrairie Corp and several other technology suppliers and major corporate users of RFID tags, is working to bring together consumer goods companies "to really examine where RFID can have the greatest impact in the supply chain," says James Le Tart, corporate marketing group leader at RedPrairie.

And, while tags may have become substantially cheaper, an investment in the wireless infrastructure needed to make full use of RFID technology can run to millions of dollars at a large company. Analysts say many companies will take the plunge; Venture Development Corp in the US, predicts companies will spend US$2.6 billion on such equipment in 2005, three times what was spent in 2000.

At this point, companies are intrigued rather than hooked - they underwrite research efforts and run pilots, but they're moving slowly. Wal-Mart Stores Inc, for example, is working with the Auto-ID Center on a three-phase pilot that involves limited use at one location, then broader use on more products at the case level, and eventually tagging individual items.

"The jury is still out," says Wal-Mart spokesman Bill Wertz, "but it seems promising." Monica Deady