Microsoft gave a sneak-peak of its Pocket PC, set to rival 3Com's Palm series, at CeBIT.

The company demonstrated a prototype Pocket PC, made by Casio and Siemens, running its Pocket Internet Explorer operating system.

"It's a little bulky at the moment, but the final version will be as thin as the Cassiopeia," said Georg Wolf, director of marketing, Siemens communication services division.

The Casio PC will have email capability, mobile Internet access and GSM (global system for mobile communications) telephone capabilities through a standard headset, said Greg Levin, director of marketing for Microsoft Europe.

As well as being able to connect to the Internet over a conventional or wireless modem, the company also said that Pocket PC will be able to connect over LANs (local area networks), PANs (personal area networks) and WANs (wide area networks).

Microsoft said that PocketPCs would ship in the first half of 2000. Pocket PCs were first announced by Bill Gates, Microsoft's chairman and chief executive officer, at the Consumer Electronics Show in Las Vegas in January. No price has been announced.

"It will be interesting to see how the new Pocket PC interface design and applications stack up to the Palm," said Diana Hwang, program manager for mobile research at IDC.

Industry feedback suggests that the Pocket PC represents an improvement over the current Palm-size PC platform. It remains to be seen if Microsoft can gain market share from the market-leading Palm OS. This may well be the company's last stand in the palm-sized device segment, Hwang added.

"If this doesn't work for Microsoft this time, then I think that's it for Microsoft," she said.