THE engineers have a dream.

They want to cram the sum total of human knowledge into a single squealing box and create a universal machine . . .and every year it takes a step closer to becoming reality.

Last week, the quest to create an all-singing, all-dancing device took a purported great leap forward.

Microsoft launched its Ultimate Mobile PC (UMPC), a lightweight, book-sized portable computer billed as the gadget that 21st-century mankind will use to communicate, entertain and work, wherever or whenever they want to.

For months there was little more than a codename, Project Origami, until the new machine was unveiled on Thursday in a whirlwind of consumer hype at the CeBIT technology trade fair at Hanover in Germany. The machine's debut brings to a close four years of research, design and topsecret commercial collaboration.

Otto Berkes, general manager of Microsoft's newly formed ultramobile personal computer division says: "My ultra-mobile PC incubation efforts included building hardware and software prototypes, testing the overall feasibility of the idea and getting other people on board with the general concept both inside and outside the company.

"Building a new type of PC requires broad industry collaboration for new hardware, new product designs and new software to come together as one critical mass to create a new type of PC experience. That doesn't happen easily, or overnight, " says Berkes, one of the original designers of the Xbox games console.

"I can't believe it's been four years from the start of the journey to this point - it doesn't seem that long ago that we were first brainstorming around the potential of a new type of highly mobile PC, but even today we're just getting started."

The starting point, as it happens, is already fairly far along the curve.

Although Microsoft expects many manufacturers to jump in with their own models, first to market will be the Samsung Q1, which weighs less than 2lbs and comes with a seven-inch touch-sensitive colour screen that can be operated using either your thumbs or a traditional stylus.

Expected in the shops later this year, it will come with a full version of Windows XP installed, a 30-60GB hard drive and virtually all the functionality and power you'd expect from a desktop PC.

The devices, which will have a two-and-a-half-hour battery life, do not have a built-in keyboard - although one could be linked using either Bluetooth or a USB port - and are expected to hit the shelves at around the pounds-600-pounds-700 mark.

Pitched squarely at the consumer market, we now know that they are to be sold as the handbag gizmo that will enable you to listen to music, read the news, watch videos and exchange e-mails from the number 42 bus and that they are sleek, futuristic and undoubtedly easy on the eye. The only question remaining, really, is whether this bird is going to fly.

Unfortunately for Microsoft, the technocrats have already dubbed the UMPC a turkey, slamming the device as an under-powered rehash of the failed tablet PC concept that falls into a marketing no-man's-land.

Too large to make a workable PDA (personal digital assistant) and too fiddly to compete with a traditional laptop, for many in the industry the device effectively falls between two stools. They argue it offers an overpowered solution to a question that has already been answered and only serves to confuse a consumer already baffled by a sales space brimming with a proliferation of choices.

"Gadgets like iPods and mobile phones are becoming true portable multi-function devices owned by the masses, " says Martin Brindley of MCC International.

"With my phone I can listen to music, watch videos, take pictures, play games, write SMS [text] messages, surf the net, and access my e-mail and IM accounts, so why would I ever need to buy anything else?"

CHIEF among the criticisms of the UMPC is the question of price. Microsoft will essentially be competing against an array of push-button multifunction mobile phones and PDAs already available for pounds-200 or less, with a machine that's three times more expensive, much less portable and (due to the painfully slow XP boot process) anything but instantaneous.

True, it will offer far greater power, but no more so than a laptop that you can buy for pounds-500 and which comes complete with a tried and trusted keyboard.

This, in a nutshell, will be the UMPC's great challenge. If perceived merely as an overpowered PDA or an inconvenient laptop, the device is almost certain to join technology's great concept graveyard, but if it can be accepted as something altogether new, many analysts believe that the sky's the limit.

Hotwire PR's Paul Naphtali, who handles European marketing for the Blackberry device, says: "The pounds-500 price point has traditionally proven to be quite a barrier in the computing market. If you just want a PDA device or mobile media viewer, then this would be a very pricey option, but Microsoft could be starting a whole new market here, and if consumers really like something, there is no such thing as expensive."

We are in the middle of a mobile entertainment explosion and, as a brand, Microsoft needs to be part of it. Left trailing in Apple's wake by the iPod phenomenon, the company is painfully aware of the fact that this is the only computer-powered marketplace in existence that is not dominated by its software, and the UMPC forms the core of the Redmond giant's strategy to rectify this.

The need for action might be obvious to Bill Gates, but what remains unclear is whether consumers want or need a device that can do everything everywhere. Consumers worldwide may already have proved that they desire devices which let them make calls, swap messages and listen to music, but that might be as far as it goes.

Perhaps they will embrace the idea of greater functionality, on the move, but if they do not Microsoft has just created a new layer of confusion in a market already befuddled by a surplus of choices.

"Consumers are becoming baffled by the choices open to them. If they want to listen to U2's latest track, they don't want to have to bother deciding whether they buy it on a physical medium, such as a CD or cassette, or download it on their phone, iPod or PC, they just want to listen to it, " says Brindley.

That is one viewpoint. The other is that the day of the single function gadget is over, and that no longer able to concentrate fully on a single market or application, companies worldwide are now rapidly redefining the playing fields upon which their businesses operate.

They are casting a roving eye into new sectors to perpetuate profits and stay one step ahead of the opposition.

"This is the reality of today's market. It is more fractured, more mobile and less likely to accommodate any company determined to keep a narrow focus of operation, " says Julian Hayes of Wolfson Microelectronics, a Scottish manufacturer of chips for a variety of gadgets including digital cameras, MP3 players and mobile phones.

"You cannot think of products being single-function items anymore and have to keep an eye on any application that might benefit from an individual technology's inclusion, and that is why today, we're monitoring more than 40 markets at any one time."

This process is already under way, with many manufacturers now turning to other realms of the consumer goods sector in order to maintain profitability and market positions.

Pentax is now working with UMPC collaborator Samsung to provide the technology for the mobile-maker's high-end photo phones and according to executives at the Japanese imaging giants, such partnerships will become an increasingly common feature of 21st-century commerce.

John Dickins, European product manager at Pentax, says: "There has been an explosion in the number of manufacturers churning out electronic goods and this has severely shortened the life cycle of any new gadget as it progresses from high-value purchase to low-price shelf filler. No matter how big your brand, you cannot hope to survive unscathed unless you get out there and diversify.

Stuck between a rock and a hard place, the reality is that Microsoft had no choice but to stick its brand into the crowded sphere of high-tech entertainment, and what becomes of the project will depend entirely upon consumer reaction.

The amazing growth of the iPod has been based as much on marketing as technical strength, and the Seattle propaganda machine will have to replicate this success if it is to survive - there is no alternative bar the UMPC's rapid demise.

THE EVOLUTION OF MOBILE COMPUTING

1957: US Army Signal Corps commissions MOBIDIC, a computer system that fitted in two large tractor-trailer trucks. The project was cancelled within five years.

1961: Mathematicians Edward O Thorp and Claude E Shannon, known as "the father of information theory", develop a cigarette-pack sized analogue computer designed to predict roulette wheels and successfully test the Las Vegas gaming tables.

1981: The first full-function laptop computer, the Osborne 1, goes on sale.

1984: British company Psion launches the Psion Organiser, the first of a range of electronic devices offering basic personal organiser functions.

1992: Apple coins the term "personal digital assistant" with its Newton, a portable, pocket-sized machine with office functionality and handwriting recognition system.

1993: The first device with mobile telephony and organiser functions is unveiled by Bell South.

1996: The Palm Pilot is launched, offering a range of office applications and games.

Equipped with a flexible operating system, it immediately attracts the attention of software development houses and sets the standard for PDA functionality. In the same year, Toshiba's 840g, Windows 95 Libretto "sub notebook" is released.

1999: The BlackBerry debuts as the first wireless handheld device to support e-mail, mobile telephone, text messaging, web browsing and other wireless information services.

2002: The touch screen tablet PC (UMPC's direct forebear) is launched but flops.