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LAS VEGAS -- Hitachi will enter the intensely competitive personal digital assistant market later this year with a product based on Microsoft's new Windows CE .Net operating system, the company announced on Tuesday. The prototype PDA was unveiled at the Consumer Electronics Show here.

Hitachi formed a special unit, Net-PDA Venture, to develop PDAs in November 2000, and the recently unveiled prototype is one of the first fruits of that development. Windows CE .Net, which was also unveiled at CES, is the successor to Windows CE 3.0 and supports Bluetooth and 802.11x wireless connectivity technologies.

"Unlike Pocket PC, this OS is an embedded system," says Nobutoshi Yoshida, a spokesperson at Hitachi's Net-PDA Venture unit. "We decided to adopt the system because it will allow for various applications to be carried and for real time streaming video, which is becoming popular in this broadband era."

Windows CE .Net will be compatible with Microsoft's future .Net initiatives, and devices based on the OS will be able to access many of the .Net services that will appear on the Web, he says.

Hitachi plans to commercialize the prototype PDA by mid-year for corporate users, first in Japan and then abroad, Yoshida says.

In Japan, many major electronic device makers, such as Toshiba, NEC, and Fujitsu, have entered the PDA business, intensifying competition in the market. Hitachi hopes to differentiate itself from the others with Windows CE .Net, Yoshida says.

Among other Japanese PDA makers, Casio Computer has also announced that it will adopt Windows CE .Net for its PDA products.