The world's biggest technology fair was showing off some of the industry's smallest innovations when it officially opened on Thursday.

CeBIT, in Hanover, Germany was also the stage for some major announcements from the likes of Intel, unveiling its Pentium III Xeon chip, and America Online, outlining a strategy for AOL everywhere in Europe.

The highlights among the handheld devices:

• Psion and the Symbian group joined with Sun and Alcatel in announcing development of a range of intelligent phones and handheld computers. "We are looking at 40m to 60m devices that will use [Java and Symbian] technology in five years," Sun's Chief Executive Scott McNealy told a news conference.

• Not to be outdone, rival Microsoft said it planned to launch an Internet-enabled phone code-named Hermes, naturally running the Windows CE operating system rather than Symbian's EPOC. Philips and Panasonic would produce initial versions which would have a touch screen, digital answering machine and keyboard.

• Compaq said it planned to launch a hand-held which had a colour screen, Net access and an audio facility. The company said users would be able to download newspapers, listen to the radio and read books on the Arrow 2100.

Intel introduced its 500Mhz Pentium III Xeon chip at the show. Designed for servers and high-end workstations it offers the company a much bigger profit margin in those markets.

Pat Gelsinger, general manager of its desktop products,also showed off a future processor - an 800Mhz Pentium III - which was 60% faster than the new Xeon.

Gelsinger: PIII sales going well

In a telephone interview with BBC News Online, Mr Gelsinger said the company's goal was to be the engine for every aspect of the Internet.

Eighty per cent of Internet Service Providers in Europe were building on the Intel architecture, he said, and by 2000, it would be 90%.

The new PIII Xeons also had the controversial Processor Serial Numbers that irked civil liberties groups. But he said, privacy concerns were less of an issue at the enterprise level on the larger computers here PSNs could help with asset management and tracking.

"Sales of the PIII have been going very well. We expect by the end of the year it will have largely replaced the PII as the processor of choice," he said.

Mr Gelsinger has been closely associated with the development of Intel's concept PCs, even acting as Master of Ceremonies at a fashion show for them.

"We have 13 different models and I think we will see most of them, in a similar concept, in products this year."

AOL everywhere in Europe

AOL offered to connect all of Europe's parliamentarians to the Web, in a CeBIT announcement, and said it would accelerate Europe's emergence as an Internet power.

AOL Europe's Chief Executive, Andreas Schmidt, said its goal was to reach 10m households in 2002 from 2.6m now, be the leading online service in every market and have the number one combined portal reach in Europe.

AOL lost its leadership in the UK last year to the subscription-free Dixons service, freeserve.

Mr Schmidt announced AOL Center and Compuserve Center portals for Europe, saying they would run on a unified technical platform based on Netscape technology.