March 16, 2003 9:00 PM PST

Microsoft plans wireless software push

Microsoft's battle for cell phone software supremacy will heat up at this week's Cellular Telecommunications and Internet Association annual conference.
Learn more about wireless plans

On Monday, Microsoft plans to kick off the Cellular Telecommunications and Internet Association (CTIA) conference in New Orleans with an announcement that it's working with another wireless device maker, Ontario, Canada's Research In Motion (RIM). The companies plan to link RIM's e-mail programs to cell phones using Microsoft's cell phone software.

Microsoft Chairman Bill Gates will also make a relatively rare appearance at the conference to drum up support for his company's Pocket PC Phone Edition and Smartphone 2002 software.

The software company will also announce that U.S. carrier Sprint PCS plans later this year to sell two camera phones--the Samsung i700 PocketPC and the Hitachi G-1000--that will use a version of Microsoft smart phone software, Microsoft spokesman Ed Suwanjindar said.

"We feel pretty good about our position," Suwanjindar said. "A year ago, we didn't have Pocket PC phone editions shipping. A year later we have more than two dozen operators shipping. We're looking forward to great things."

Microsoft, Symbian and PalmSource are battling over what operating system handset makers use to build new generations of cell phones that combine the features of a personal digital assistant and a cell phone. For now, it's a very young market with about 2 million devices in circulation. By comparison, there were 400 million traditional cell phones sold last year.

But the market for the phones is expected to grow significantly. By 2006, IDC expects that Symbian will have increased its market share in the powerful phones to 53 percent from its current 46 percent. Microsoft will have about 27 percent of the market, with Palm at 10 percent. IDC predicts that Linux could take as much as 4.2 percent of the market.

Microsoft considers its biggest competition to be the rival phone operating system from Symbian, a company owned by Nokia, Motorola, Ericsson and most other major handset makers. Even Microsoft concedes that Symbian is the clear leader. Microsoft may have signed up Taiwan's High Tech Computers and two small handset makers to make phones using its smart phone software, but most major wireless device makers are already developing Symbian phones, said Symbian Vice President Peter Bancroft.

Every time Microsoft signs up another handset maker, Symbian does too. Last week, it was revealed that Motorola is developing a Symbian-based phone. Symbian is expected to make additional announcements about its licensees at this week's CTIA.

"What you're looking at is an iceberg," said Symbian representative Peter Bancroft. "What you're only seeing now is the tip."

Microsoft is also battling PalmSource, another major maker of operating systems being used in new generations of cell phones. PalmSource Chief Executive David Nagel said his company's operating system is strongest within the United States, where it powers about 75 percent of the smart phones on the market.

He saved his most pointed criticism for the early iteration of Microsoft smart phones, which were bug-filled and took up to 25 seconds to boot up. They were "a fantastic commentary of what doesn't work."

But PalmSource itself may ultimately fall victim to Microsoft. PalmSource's software is the second most popular software for smart phones worldwide. IDC projects that by 2007, Microsoft will have overtaken PalmSource for second place in the market.

 

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