Newest Microsoft Smartphone to get viewing next week

Unnamed handset manufacturer to host global launch Oct. 8

The next step in Microsoft Corp.'s effort to penetrate the mobile phone market comes on Oct. 8 when the latest handset using Microsoft's Smartphone operating system is given a worldwide launch.

The Smartphone, which is being produced by "a company with considerable experience of the wireless space," will offer "some radical innovations," according to an e-mail invitation sent by a public relations company for the unnamed mobile handset manufacturer.

"We can't reveal the company because of non-disclosure agreements, but I can say that it will be a global launch and that the manufacturer has a range of Smartphones on the way," said Lewis Webb of the U.K. public relations company AxiCom.

Microsoft representatives declined to comment on the Smartphone prior to its launch.

A number of Microsoft partners are planning to produce Smartphones in the future including Taiwanese hardware maker Mitac International Corp., Samsung Electronics Co. Ltd. and Acer Inc. spin-off Winstron Corp.

Mitac, which uses the brand name Mio, launched the Mio8380 in Taiwan on June 10 and according to a group Web site (, planned to make the phone available in Europe in the third quarter of 2003.

The Mio8380 uses the Smartphone operating system and a chip set from Intel Corp., the 200MHz PXA255 processor. The triband phone operates on GPRS (General Packet Radio Service) and GSM (Global System for Mobile Communications) networks in Asia, Europe, and the U.S.

Though the phone was not launched on Sept. 30, the last day of the third quarter, representatives from Mitac in the U.K. where unable to say when the Mio8380 would receive its European unveiling.

The product being launched on Wednesday will follow the launch last month of the Motorola MPx200, a clam-shell format cell phone manufactured by Motorola Inc. and based on Microsoft's Windows Mobile 2002 Smartphone software. The MPx200 is being distributed by mobile network operator Orange SA on its U.K. network while AT&T Corp. will offer it in the U.S. in the fourth quarter.

Though the Redmond, Washington, company is the Goliath of the software market, its entrance into the mobile phone arena, dominated by Nokia Corp. and smart phone OS developer Symbian Ltd. (of which Nokia owns a large share), has been measured, marked by a trickle of products produced for the most part by smaller handset makers.

According to Chris Jones, an analyst with Ltd., Microsoft needs to attract the same sort of attention to its Smartphone products that Symbian and Nokia have and while its phone with Motorola was a start, the company needs to make a bigger splash in the market.

"Microsoft needs to attract the brands. It did announce a smart phone with Motorola but that was only with Orange (the fourth largest mobile network operator in the U.K.) and it still lacks the scope needed if it's to show that it's taking on Symbian and Nokia in this market. Microsoft really needs to make a big impact going forward," Jones said.

It is unlikely that an announcement by Mitac will create much in the way of waves on the market, he said. "Mitac is not a known brand as a handset manufacturer and Microsoft really needs to attract a larger, known handset manufacturer."

Even if the latest Smartphone comes from the brand-name handset maker Samsung, the announcement will have little impact in Microsoft's overall position in the market. "Samsung is really hedging its bets and has said it will launch products on each platform at some point," Jones said. He added that since Samsung has already made it clear that it is working with as many partners as it can, such an announcement wouldn't hold the punch that Microsoft needs.

IDC analyst Kevin Burden believes that while it may look to the casual observer that Microsoft isn't making any significant headway into the minds and hearts of mobile phone users if next Wednesday's announcement isn't made by a large handset manufacture, the company is still making steady progress.

"You've got to start somewhere. It is a very difficult market to tap into, what with Nokia having almost 40 percent of the market, and the very fact that Nokia is behind Symbian makes it the leading platform," Burden said.

Microsoft faces further difficulty in convincing the big handset manufacturers to partner with it as the companies have already worked out their roadmaps well in advance. "It's very difficult to get another top tier handset manufacturer, so smaller players seem to be the easiest pickings for Microsoft. It is important for Microsoft to get its phones out into the market any way they can. It builds a following behind the platform," he said.

According to Jones, there have long been industry rumors that Sony Ericsson Mobile Communications AB has been looking at a possible Microsoft partnership in order to position itself again Nokia. "The rumors about Sony Ericsson started when Motorola announced in August that it was selling its 19 percent stake in Symbian to Nokia and Psion, but Sony Ericsson is still a major shareholder in Symbian and until there is an announcement made, any partnership between Sony Ericsson and Microsoft remains just speculation," Jones said.

Another problem in Microsoft's quest to win over mobile handset users has been some small but nagging usability issues with its handsets such as problems with the connector manager, Burden said.

"And like typical Microsoft, you have to reboot these phones every so often," he added.

Not to be deterred by such hiccups, Microsoft will push on and, step-by-step, will carve itself a place in the mobile wireless market, Burden said. "The phones have gotten better and that will continue. Microsoft will continue to get more handsets, more carriers and more users," Burden said.

As for the Smartphone announcement on Oct. 8, it is unlikely to be causing much hand wringing at Nokia or Symbian corporate headquarters both Jones and Burden agree.

"I don't think Nokia is terribly concerned about Microsoft's position in the market or about each announcement of new handsets. Who does Symbian fear the most? I actually think it's Linux because of its popularity in the Asian markets," Burden said.

Copyright © 2003 IDG Communications, Inc.

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