Microsoft's handset war

Microsoft has been rejected so far by the major cellphone makers. So the software giant has changed its strategy. It's now going to try to run the bigger mobile manufacturers out of business.

I wrote last week that major players such as Nokia and Sony Ericsson are coming out with "smart phones" based on Symbian rather than Windows (see Symbian cell-through).

Now another handset leader, Samsung, is making Symbian phones, too. The company has issued no formal statement, but its executives are clear. "You can see that we've been using the Palm operating system," spokeswoman Denise Clark tells me, "and we're going to be using Symbian."

This is significant because Samsung was the only one of the five leading cell-makers to sign up for Windows Smart Phone software. Microsoft made much ado about this last year. But no such models shipped. When I asked Samsung product planner Byung-Jik Jaegal whether or not his company's line will include Windows this year, he answered, "Maybe, but it's not decided yet."

Microsoft is intensely interested in the cellphone market. In the handheld PDA world, vendors of Windows-powered Pocket PCs are easily persuaded to design new models that add antennas and voice features. Several such hybrid Pocket PCs are already prepped to appear on the market this year.

But cellphones are different. Consumers expect them to be cheap and tiny, so they can carry them everywhere. Perhaps as a result, worldwide sales of PDA-format handhelds were only about 12 million units in 2001. That's nice, but compare it with cellphone sales in the same period: 400 million.

Microsoft wants Windows to be in that number of devices, but it has been rejected so far by the major cellphone makers. So the software giant has changed its strategy. It's now going to try to run the bigger mobile manufacturers out of business.

I realise this sounds preposterous. But we're talking Microsoft here, so stay with me. This is not an April Fools' joke.

Microsoft has made deals with Intel and Texas Instruments to build a reference design chipset so that any sweatshop can snap some plastic around to create a working handset. (With Windows built in, you'll be able to crash your phone without actually dropping it on the floor.)

Microsoft is persuading cellular-service carriers to label these "clone phones" with their own logos, then give them away rather than sell the major makers' brands. This campaign uses that old convincer: money. The European edition of The Wall Street Journal reported on March 14 that Microsoft is sharing its Windows-powered wealth from MSN and other services with Deutsche Telekom, the German parent of VoiceStream, and presumably others.

In the future, will you be able to get any cellphone you want, as long as it runs Windows? I believe the mobile-phone leaders will avoid being "Netscaped" by Microsoft. Nokia has already inked its own reference-design deal with Texas Instruments, based on an open-software platform. Let freedom ring.

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