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The origins of the Handheld PC: The Microsoft Wallet PC Vision

Chris Tilley | Editor-in-Chief
13 August 2003

A look back to the beginnings of the Microsoft PDA Project

Where did it all start?

Microsoft entered the PDA market with aim to compete with the well established, much loved EPOC devices by Psion. While this certainly isn't the case at this time, with the focus being on competing with Palm based devices. The origins of the Windows PDA empire - it seems - stem from a completely different set of ideals.

The original vision for what became the Microsoft Mobile Devices division was not the Handheld PC, nor the Pocket PC, but a device Microsoft called the 'Wallet PC'.

In an article originally posted in the Huntsville Times in February 1996 (9 months before Windows CE 1.0 RTM'd). The then President of Microsoft, Bill Gates gave an frank overview of where Microsoft were working towards with their yet to be named, first PDA operating system.

'Wallet PC' will hold electronic keys, money, ID

20th February 1996

Losing a billfold, or having it stolen, will never be a happy experience. What a pain.

But with the advent of the "wallet PC," which I expect to become popular by early next decade, at least you won't necessarily lose everything inside your wallet just because you lose the wallet itself.Bill Gates Photo

A wallet PC will be a pocket-size computer with a snapshot-size color screen that you will use in place of many essentials you carry around with you today -- money, keys, identification, credit cards, tickets -- as well as items that provide you with mobile information and communications, such as a watch, newspapers or other reading material, address and appointment books, photographs, calculator, portable telephone and pager.

If you lose your wallet PC, replacing the actual device may cost about what it does to replace a good camera -- several hundred dollars, at least -- so you won't want to lose yours.

On the other hand, replacing almost anything "in" the wallet, from money to photos, will be simple and inexpensive because the wallet will contain only digital information that can be traced, replicated or retrieved from another location.

When I talk about the wallet PC, some people express concern about its security; others want to know if anyone is making the devices. Here's the situation. "Wallet PC" refers to an ideal, in the same way that the term "information highway" does.

Today there are hand-held devices that perform some of the functions of the ideal wallet PC, just as today the Internet suggests many features of what will eventually be the information highway.

And today's pocket computers may evolve into full-blown wallet PCs, just as today's Internet is likely to evolve into the ideal information highway.
Once the ideal is achieved, what will the wallet PC do for you besides collapsing into digital form all the items mentioned earlier?

"It will display messages and schedules and also let you read or send electronic mail and faxes, monitor weather and stock reports, and play both simple and sophisticated games," I wrote in my book, "The Road Ahead."

"At a meeting you might take notes, check your appointments, browse information if you're bored, or choose from among thousands of easy-to-call-up photos of your kids."

To keep size down, wallet PCs will not have keyboards. They will understand spoken or handwritten instructions.

A high-end wallet PC will be able to identify your position anywhere on Earth, thanks to signals from Global Positioning System satellites. They will enable the wallet PC to give you directions (even spoken directions) to any destination, whether you want to go home or to the nearest public restroom in a strange city.

Any wallet must hold money, and the wallet PC is no exception. But the funds will be stored and exchanged in digital rather than paper form.
" Your wallet will link into a store's computer to allow money to be transferred without any physical exchange at a cash register," I wrote.
" Digital cash will be used in interpersonal transactions, too. If your son needs money, you might digitally slip five bucks from your wallet PC to his."

This will be convenient, you may be thinking, but if someone gets his hands on my wallet PC, what is to stop him from stealing my money as well as my information?

Wallet PCs will be password-protected and may require recognition of a thumbprint or voice "print" to operate. Without it, such a wallet PC will refuse to release money or information.

What about a holdup? One reader wrote: "I am concerned about the security implications of people being held up while walking down the street and being forced to empty their bank accounts or even give up $200 to a thief who forces them to enter their security codes."

It could happen. It happens now.

Paper currency is an anonymous bearer instrument. Someone can steal cash and spend it freely, assuming the bills aren't marked or the serial numbers haven't been recorded. Digital cash can be safer. It needn't be anonymous. If someone transfers nonanonymous digital money, where it was transferred to can be known. Any transfer could be reversed -- and the police would have a great lead for solving the crime.

I am more concerned about privacy because the transfer of information cannot always be reversed. Somebody intent on reading your e-mail messages could brandish a gun and say, "Hand me your wallet PC and give me your password."

He would have access to your information until you invalidated the wallet PC by notifying authorities, who would broadcast a signal to disable it.

This ability to invalidate a wallet PC will make you better off than you are today when someone can invade your privacy by stealing your briefcase or by stealing your lap-top computer.

Microsoft is working on software for a generation of hand-held devices that are precursors of the ideal wallet PC.

We expect a number of hardware manufacturers to release pocket devices that will use this software, and we expect other software companies to develop applications that run on them.

A year ago we had a prototype that we and our hardware partners decided not to introduce. We concluded the hardware wasn't cheap enough and the software wasn't powerful enough.

People will not buy computers that are underpowered. It is stunning how quickly computers based on the 486 chip have become obsolete. These were state-of-the-art a couple of years ago, but they're being pulled off the market now because no one will buy them even for as little as $800.

We took this lesson to heart and delayed plans to ship our software for hand-held units.
It will be another year or so before we have something with an appropriate balance of high performance, reasonable price, low power consumption and small size.

Meanwhile, other companies have released early versions of hand-held computers. Some are very interesting.

To date, the market has been pretty small, but that doesn't mean there isn't a huge market for a device that's just a fair bit better. Lots of companies are jumping on the bandwagon, and I think there will be a big market for wallet PCs, or their precursors, in less than five years. I don't know exactly what threshold of features and price will cause the market to explode, but I'm sure the threshold will be crossed.

Bill Gates on the 'Wallet PC'


Interesting that this vision hasn't quite got there and yet it is remarkably close to how PDA's are today. However there are certainly familiar elements. The most notable being the newer generation of devices which do not have keyboards.

The technology has also caught up. Hands up who shelled out $800 on a 486?... I thought so.
Today's mobile devices, such as the NEC MobilePro 900 boast a 400MHz XScale processor, devices contain faster, larger and more sophisticated memory. Some PDA devices equipped with Cellular transceivers can be remotely deactivated - at least in part - if stolen. A technology that we take for granted in our mobile phones and one that is slowly finding its way into PDA's.

"We took this lesson to heart and delayed plans to ship our software for hand-held units.
It will be another year or so before we have something with an appropriate balance of high performance, reasonable price, low power consumption and small size"

The most astonishing fact revealed by the article is that Microsoft was prepared to release its first generation PDA operating system one assumes more than a year prior in early 1995.
What happened to this release remains a mystery.

Could this delay explain the relatively short life of Windows CE 1.0?.

Within 10 months CE 1 was surpassed by CE 2. If the original version of the embedded Operating System, in one form or another had been sitting around the development corridors of Microsoft for over a year, slowly but surely being sculpted into CE 1. The minds of its creators would inevitably have drifted to the future. CE 2.0 and CE 2.1, the original Palm-size PC release.

Windows CE 1.0 Desktop
Create a product team & wait 9 months. You'd be surprised what can happen

The idea of the 'Wallet PC' ties in perfectly with the thinking within Microsoft at the time. The Internet Explorer 4.0 technologies were an extension of this centralised wallet idea, with the security improvements and the Microsoft Wallet Tool, which held personal information in lieu of future e-commerce transactions. It was the technology delivered in the 4.x browser generation that has driven e-commerce to new levels and provided businesses with new ways of reaching customers. This functionality now exists as Microsoft .net Passport. Who's to say that this innovation wont be extended to the PDA.

While we haven't quite fulfilled the ideal of using our PDA for petty cash transfers and for store purchases, who's to know what the future may bring. On any HPC Pro or HPC2000 device you can log onto your on-line bank and transfer money anywhere in the world at the touch (or tap) of a button. Human Interface technology, such as retina and finger print scanners has become a viable technology, with hardware available for both mainstream computers and PDA devices. Who's to say that this wont be an accurate vision of the future.

IliumSoft has made a good start towards this electronic future with their eWallet application. While you can't transfer money between your friends and children, eWallet provides an essential Handheld PC tool, one that allows you to safely and securely store many of the small pieces of information that are needed both day-to-day and also sporadically. For more information on eWallet check out our very own Clinton's review of eWallet 2.1 and 3.1.

The article also seems to have predicted the future quite well. Something which Bill Gates in general is uncannily good at. "a big market for wallet PCs, or their precursors, in less than five years". Sure enough, 5 years after this article was written, Windows CE device development had consolidated into the Microsoft Mobile Devices division and Pocket PC 2000 was well established, with Pocket PC 2002 in development. Changing the way Microsoft viewed its PDA development, and marking the beginning of the Pocket PC class device's popularity. Sadly though, this change was to the detriment of the Handheld PC.

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