Microsoft yesterday introduced the next version of its Pocket PC operating system. It has been tweaked to support enterprise users, with a host of new features including a built-in VPN (virtual private network) client, but Pocket PC 2002 isn't backwards-compatible with HP and Casio’s first-generation hardware.

Ed Suwanjindar, product manager of Microsoft’s mobility group, said Pocket PC 2002 will only support ARM chips from manufacturers such as Intel. This means users of older HP Pocket PC hardware such as the Jornada 520 "will not be able to move to the new software". However, the new software will run on older Pocket PCs manufactured by Compaq, making HP's decision to buy the company look prescient.

Ellen Van Etten, a spokeswoman for HP, said the company is "working on a promotion for existing [Jornada] customers to purchase the new Jornada" at a discount after the new Pocket PC hardware is introduced in October. Older Jornada handhelds run on an SH3 chip made by Hitachi. Older Casio Pocket PC hardware runs on Mips chips manufactured by NEC, but we were unable to reach a spokesman for Tokyo-based Casio for comment by deadline.

The backward-compatibility problem aside, Suwandinjar said, Microsoft has added a number of features to the new Pocket PC operating system targeted directly at enterprise users. These include a feature that mimics the Graffiti handwriting-recognition system used by rival Palm in its handhelds, as well as a built-in chat feature that Suwanjindar described as Microsoft's answer to AOL's popular Instant Messenger client.

Pocket PC 2002 will also provide users with a built-in terminal server, making it easier to connect and log in to corporate networks. Other features include built-in support for a variety of wireless connectivity options, including standard 802.11b wireless LANs and cellular networks.