TORONTO – Microsoft confirmed the U.S. Census Bureau has ordered 500,000 handheld devices equipped with Windows-Mobile software, but analysts who follow Research In Motion played down the news, saying the devices aren’t for wireless email.

The associate director for communications at the U.S. Census Bureau, Jefferson Taylor, confirmed the devices won’t have mobile-phone or wireless-email capability. The devices will be used specifically to help the bureau conduct the 2010 census, Mr. Taylor said. “…instead of paper and pencil which was done in the part this is a forward looking decennial census which Congress has called the high-tech census 2010,” Mr.Taylor said.

While the Census Bureau has decided not to use the devices for email, the group product manager in Microsoft’s Mobile and Embedded Device Group, John Starkweather, said the Census-Bureau win was a competitive win that included RIM, maker of the BlackBerry wireless email device.”Ultimately, it came down to RIM and us,” he said.

That’s news to RIM, which indicated it didn’t bid on the contract. In a statement, a vice president of marketing at RIM, Mark Guibert, said, “RIM did not bid on the contract because Census was looking for a specialized terminal, originally a tablet [computer], that falls outside the market RIM serves.”

Asked to clarify his earlier comments, Mr. Starkweather confirmed he misspoke. He said he originally was led to understand that RIM bid on the deal, but has since learned that wasn’t the case. RIM was sent a request for proposal by the Census Bureau, but apparently decided not to bid, he said.

Mr.Starkweather also clarified information from the Census Bureau. The 500,000 handheld devices have the ability to work as phones and provide wireless-email service. However, it is up to the Census Bureau to decide if it wants to use the devices for these purposes and how many devices it will enable with these capabilities, he said.

Mr. Starkweather said the lead contractor on the $600 million deal is Harris Corporation, a Cincinnati IT company. Harris ordered the 500,000 handheld devices from Taiwan-based High Tech Computer Corporation, which makes about 20 handheld devices that include Windows-Mobile software, he said. He declined say how much the Census Bureau is paying for the devices.

“We view [the Microsoft] contract as a portable computing deal, not a mobile email deal – no impact on RIM,” Scotia Capital’s Gus Papageorgiou said in a research note yesterday.

Mr. Papageorgiou doesn’t own RIM shares. Scotia expects to receive or intends to seek investment-banking services from RIM, the note said.

An analyst at Forrester Research, Ellen Daley, had a different take, saying that the mobile-device market is evolving beyond wireless email. While RIM is working to add new functionality to the BlackBerry, it faces tough competition from Microsoft.