Portable systems require long battery lifetime while still delivering high performance. Dynamic power management (DPM) policies trade off the performance for the power consumption at the system level in portable devices. In this work we present the time-indexed SMDP model (TISMDP) that we use to derive optimal policy for DPM in portable systems. TISMDP model is needed to handle the non-exponential user request interarrival times we observed in practice. We use our policy to control power consumption on three different devices: the SmartBadge portable device [18], the Sony Vaio laptop hard disk and WLAN card. Simulation results show large savings for all three devices when using our algorithm. In addition, we measured the power consumption and performance of our algorithm and compared it with other DPM algorithms for laptop hard disk and WLAN card. The algorithm based on our TISMDP model has 1.7 times less power consumption as compared to the default Windows timeout policy for the hard disk and three times less power consumption as compared to the default algorithm for the WLAN card.