With a battle raging between Microsoft and Palm Computer for the future of handheld computing, is there room for a third entrant? Sharp Electronics certainly thinks so. Its new $500 Zaurus SL5500 Personal Mobile Tool is the first handheld from a major manufacturer based on a version of the Linux operating system.

Ideally, there should be no more reason to be concerned about the operating system in your handheld computer than the OS for the computer-controlled functions in your car. (There are probably several.) But the OS does matter for handhelds, largely because of its importance to the people who write software. Pocket PCs, based on Microsoft software, are gaining popularity at corporations largely because they let programmers use their desktop Windows knowledge and tools. Sharp is counting on an army of Linux programmers to make Zaurus attractive to consumers and corporate customers, but I have my doubts.

The new Zaurus, latest in a line of varied handhelds to bear that name, is an attractive piece of hardware. The 240-by-320-pixel display is a generous 2 1/4 by 2 3/4 inches, and the bottom part of the case slides down to reveal a diminutive, but usable, keyboard. For expansion, the Zaurus offers both a CompactFlash slot that provides—at least in theory—for a broad range of communications accessories and a slot for SD memory cards. A removable lithium ion battery is a nice touch, helpful because battery life seems on the short side. The 6.8-ounce Zaurus is comparable in size and weight to most Pocket PCs.

Unfortunately, much of the software suffers from an assortment of glitches and often has a not-quite-finished feel. The calendar, address book, and e-mail applications work well, though the latter two suffer from the common handheld problem of trying to cram too much information into a single line on a narrow screen. These applications sync well with Microsoft Outlook, though the process is slower than on Palms or Pocket PCs and, in its standard configuration, required multiple mouse clicks to approve updating of the contact list, calendar, and mailbox. Setup is somewhat confusing, and the manual is no help. Transferring files from a PC to the Zaurus was a cumbersome multistep process; carelessly designed software makes some of the underlying complexity of Linux visible in what should be a simple, point-and-click routine.

The other applications are a mixed bag. There are a couple of nice games included and, for the true gearhead, a terminal program lets you run the full Linux command-line interface; you could use a Zaurus to diagnose a network problem or manage routers. A suite of applications from HancomLinux is supposed to provide compatibility with Microsoft Word, Excel, and PowerPoint. But HancomWord mangled the formatting of even fairly simple Word documents. Worse, any editing on the handheld caused the formatting to be lost permanently when the document is transferred back to the desktop. And HancomPresenter did not provide a legible display of even simple PowerPoint slides. The built-in Pocket Office applications on Pocket PCs and the DataViz Documents To Go software bundled with most Palms do a much better job.

Networking is a strong suit of Linux. The Zaurus performed well with a Linksys CompactFlash wireless Ethernet card, though extensive use will quickly suck your battery dry. The network connection is most useful for e-mail. The Opera Software Web browser works well, but the Zaurus shares a problem with Pocket PCs: Viewing 800-pixel-wide Web pages on a screen less than a third that width is simply more trouble than it’s worth.

I think users of handhelds would be well served to have an alternative to the solid but limited Palm OS and the Windows hegemony of Pocket PC. Stable, secure Linux should be an ideal candidate. However, until Linux developers offer applications with the fit and finish consumers have come to expect on their Palms and Pocket PCs, the audience for products like the Zaurus will be limited to the techie hard core.

By Stephen H Wildstrom in BusinessWeek. Copyright 2002 by The McGraw-Hill Companies, Inc