Microsoft begins the beta for Windows CE 2.0 next week with a new set of CE application development tools and new hardware form-factors that will take the little-operating-system-that-could into new areas. The CE 2.0 beta includes an OEM Adaptation Kit and Software Developers Kit for Windows CE Version 2.0 that includes support for Visual Basic Scripting, ActiveX and Java. For the first time, CE development will support LANs, Intel x86 microprocessors and color displays.

Windows CE 2.0 will be previewed in September at the Programmer's Developer Conference and officially launched at Fall Comdex in November. It will be more modular than the previous OS so that developers can license only parts of it for devices that don't need the full-blown OS.

IDC predicts that Windows CE handheld computers will sell 1.8 units a year by the year 2001, up from 50,000 units in 1996 (when the unit was on sale for only 40 days).