A Pocket PC is a computer in a handheld size that runs a variation of the operating system Windows CE. It has many capabilities of modern desktop PCs. Currently there are thousands of applications for Pocket PC, many free. Some of these devices, running Microsoft Windows Mobile 2003 Phone Edition, also include a mobile phone. Pocket PC's are used with many other add-ons like GPS receivers or barcode readers.
According to Microsoft, the Pocket PC is "a handheld device that enables you to store and retrieve e-mail, contacts, appointments, play multimedia files, games, exchange text messages with MSN Messenger, browse the Web, and more."  (http://www.microsoft.com/mobile/buyersguide/educateme/default.asp)
From a technical standpoint, "Pocket PC" is a standard from Microsoft that sets various hardware and software requirements for mobile devices bearing the "Pocket PC" label.
For instance, any device which is to be classified as a pocket PC must:
Microsoft's current release is Microsoft Windows Mobile 2003 Second Edition, which adds native landscape support to those features already present in the original release of WM2003. The first device to come with 2003SE is Dell Axim X30.
The previous operating system, Microsoft Windows Mobile 2003 for Pocket PC, consists of the Windows CE.NET 4.2 operating system bundled with scaled-down versions of many popular desktop applications, including Microsoft Outlook, Internet Explorer, Word, Excel, Windows Media Player, and others. Past Pocket PC operating systems include Pocket PC 2002 (launched October 2001) and Pocket PC 2000 (launched April 2000), both running Windows CE 3.0 underneath.
The next version, Pocket PC 2004, has codename Magneto. Not much is known about it yet (Aug 2004).
Pocket PCs are manufactured and sold by several different companies; the major manufacturers include HP (under the iPAQ and now defunct Jornada brands), Toshiba, ViewSonic and Dell. In Mid-2003, Gateway Computers and JVC announced that they too are releasing Pocket PCs. Prices in 2003 ranged from around $800 USD for the high-end models, some of which are combined with cell phones, to $200 for low-end models. A $100-$200 model is rumored to be released within 2004 or early 2005.
Before Pocket PCs were released, there were other Windows-based machines of the same form factor made by HP, Philips, and others called Palm-size PCs. These devices ran Windows CE 2.0-2.11 and had an interface that was nearly identical to the then-current desktop version of Windows, Windows 98.
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