Microsoft moves

Microsoft made an aggressive move into the wireless space earlier this month in an attempt to gain as much clout in the mobile operating system world as it has in the computer OS world.

The company announced more wireless operators plan to test Microsoft's new mobile OS, code-named Stinger, and revealed partnerships with handset makers Mitsubishi and Sendo, which plan to develop smart phones based on the software platform. The announcements, revealed at the 3GSM World Congress in Cannes, France, were made in the back yard of Symbian, a handset vendor-led organization working to develop and license a software platform for next generation mobile phones.

Three operators — Australia's Telstra, T-Mobil in Germany and Vodafone UK — plan to test Microsoft's platform in the spring. Microsoft already has signed handset vendor Samsung, while Spain's Telefonica and VoiceStream Wireless also plan to test the software, a scaled-down version of Windows CE that includes services such as Microsoft Mobile Outlook, access to corporate data and the Web, instant messaging, media playback and device management.

When major handset vendors Nokia, Motorola, Ericsson and Matsushita formed Symbian in 1998 along with Psion, it appeared to the wireless industry that Microsoft was not poised to dominate or, for that matter, make significant inroads in the software platform market for mobile phones. Today, Symbian claims to hold 70% of the market, yet handsets that support Symbian's OS are few and far between. As of now, Symbian is in the lead with one device on the market, the Ericsson R380, which uses an older version of the EPOC platform.

But volumes of product are coming to market, said Colly Myers, CEO of Symbian.

“Everyone is asking, ‘Where are the Symbian products?’” he said. “The partners aren't telling people their plans because it is sensitive information. There are huge commercial ramp-ups planned this year. This huge volume takes time.”

Symbian will finish release 6.1 of the OS by the end of this quarter. Handsets will ramp up in the second half of the year, said Myers.

The long delay of Symbian-based products may give competing operating systems a foothold in the young mobile OS market.

“Our product works today,” said Mary Starman, product manager with Microsoft.

However, Microsoft's platform is still far from perfect, with demos running in a trial phone at extremely slow speeds, but company officials insist that the demo models are running an old version of the software and the speed issues will be corrected in the latest release. Starman said Microsoft plans to introduce the software platform commercially by the fourth quarter. However, it has yet to sign deals with handset leaders such as Nokia and Motorola. And Siemens, now the second-largest handset vendor in Europe, plans to adopt Symbian's platform to power its smart phones.

Microsoft said it is in discussions with all the handset leaders in the industry. “Handset players have a vested interest in Symbian,” Starman said. “However, it's difficult to develop by committee and more difficult to bring a product to market.”

Analysts also noted a fundamental change beginning to sweep the wireless industry. No longer can handset vendors dictate the types of handset devices carriers sell. Operators now make more demands about which features and form factors they want in phones. Vendors like Sendo have emerged to customize phones to each carrier's requirements. In that environment, Microsoft's strategy of having carriers test the services could create demand for the software platform.

The young mobile-phone software-platform market will stay fragmented with several OS standards, analysts said. Palm, another OS competitor, recently teamed with Sprint PCS to jointly market and sell Palm-based PDAs and smart phones produced by Kyocera and Samsung. Vendors such as Matsushita and Samsung support multiple operating systems because they don't know which will win market share in the end.