Nokia offers design kit to rivals, facing Microsoft
NEW YORK, Feb 18 (Reuters) - Top-ranked mobile phone maker Nokia said on Monday it would offer other mobile handset suppliers a complete design kit for making Internet-ready phones, seeking to stave off a push by Microsoft Corp. into the mobile market.
The move by Nokia, maker of one of every three mobile phones sold globally, takes aim at computer software giant Microsoft (NasdaqNM:MSFT - news), which said earlier on Monday it was offering phone makers a standard kit of software and computer chips to build new ``smartphones'.
The Finnish mobile phone maker said in a statement released in Cannes, France with circuit-making partner Texas Instruments (NYSE:TXN - news) that they would deliver by autumn 2002 blueprints for other phone makers to design their own models.
Following through on a commitment made in November, Nokia said the company would open up its terminal software for use by industry rivals, combined with TI's semiconductor hardware and the Symbian mobile phone operating system.
Both companies made their announcements ahead of this week's 3GSM World Congress in Cannes, the biggest annual trade fair for the world's mobile communications industry.
The potential appeal of these offers by Microsoft and Nokia is that they allow phone makers to cut their own development costs and focus instead on differentiating their brands by being the first to offer distinctive features or new services.
These include the capacity to offer multimedia text and picture messaging, or simpler access to corporate email or common business software programs, to mention just a few of the growing ranges of functions from such higher-powered phones.
Not to be counted out, U.S.-based Motorola Inc (NYSE:MOT - news), also said on Monday it would work with mobile network operators directly to help them develop services that cash in on higher data speeds allowed by soon-to-arrive upgraded networks.
Nokia is seeking to rally other mobile phone makers in Europe, the United States and Asia in order to rebuff inroads being made by Microsoft into an industry where each cellphone maker has previously relied on its own custom-designed technology.
By contrast, Microsoft is working with both Texas Instruments, the leading maker of circuits used in mobile phones, and Intel Corp. (NasdaqNM:INTC - news), the biggest computer chip maker, to offer a version of Microsoft's PocketPC handheld computer operating system software for use in mobile phones.
In striking deals with both Nokia and Microsoft, Texas Instruments is seeking to benefit no matter who wins the software battle.
The battle to define a new generation of phones capable of handing high-speed Internet data without sacrificing any voice-calling capabilities parallels the decade-old battle Microsoft fought and won to set a common standard for the personal computer industry through its Windows software.
The latest generation of networks capable of handling high-speed Internet data represent a historic opening for Microsoft into the market for small devices such as cell phones, which will soon pack computer chips more powerful than most desktop computers only five years ago.
Microsoft is betting that consumers and employees will want to read their email and messages in a format that resembles their computer email.
For its part, Nokia also hopes to speed development of the market for new smartphones capable of doing double duty as both phones and business-ready handheld computers.
The industry has been suffering a steep downturn in the past year as the market for voice-only phones reached a saturation point, especially in Europe and North America.
Nokia's so-called Series 60 software system for smart phones works with many of the latest programming technologies, including XHTML, multimedia messaging service, and Java that allows phone companies to develop customized new services that tap the Internet.
Of the top five cellphone manufacturers, only Samsung Electronics has said it would use Microsoft Windows-powered Smartphone 2002 software. The South Korean company, the world's fourth largest cellphone maker, is expected to launch a Microsoft-based product at the end of this year.
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