Microsoft Jostles for Mobile Market Position
Tue Feb 19, 7:12 PM ET
Brian McDonough, Wireless.NewsFactor.com
Microsoft (Nasdaq: MSFT - news) is going after the mobile market in a big way. In a one-two punch that puts the desktop software juggernaut head-to-head with Nokia (news - web sites) (NYSE: NOK - news), the world's leading cell phone maker, Microsoft announced deals with both Intel (Nasdaq: INTC - news) and Texas Instruments (NYSE: TXN - news) (TI) to produce reference designs for makers of smartphones and PDAs.
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At the same time, Nokia announced a similar pact with TI.
The moves, all announced at the 3GSM (global system for mobile communications) World Congress 2002 in Cannes, France, are touted as efforts to accelerate the deployment and adoption of wireless devices and services, according to Ed Suwanjindar, product manager with Microsoft's mobility group.
"The main benefit for manufacturers and developers ... is that this reduces the cost and speed to take products to market," Suwanjindar told Wireless NewsFactor. "It also means much of the research and development burden is taken on by Microsoft and Intel or Texas Instruments."
They may also determine who dominates the wireless device market in the coming years. Texas Instruments is the top manufacturer of circuits for mobile phones, and Microsoft and Intel control 80 percent of the desktop markets for operating systems and chips, respectively.
On allying itself with both TI and Intel for reference designs, Suwanjindar said Microsoft is trying to serve the entire market. "These original equipment manufacturers have existing relationships with TI or Intel," he noted. "We want to be able to work with interested vendors whether they want to work with TI or Intel."
Wintel Moves Together
The Microsoft-Intel deal will have the chipmaker and the software behemoth creating reference designs based on the Windows Pocket PC and Smartphone 2002 software platforms and the Intel Personal Internet Client Architecture (Intel PCA).
"We're creating standard building blocks for PDA and cell phone design," Intel spokespersonn Mark Miller told Wireless NewsFactor. "The unique aspect of the Intel-Microsoft relationship is that folks understand the developer communities each of us brings to the table. Independent hardware and software vendors know how their products work on Microsoft and Intel foundations."
The Intel PCA is a development blueprint for building wireless handheld communications devices that combine voice and Internet capabilities. As part of the initiative, Microsoft will be supporting the architecture. The reference designs are in progress and expected to be introduced later this year, Miller said.
If successful, the move would allow the two companies to extend their considerable dominance of the PC market beyond the desktop and could be a serious problem for competing chipmakers and for rival mobile operating systems, such as Palm's.
Stinger This Summer
Microsoft also is setting itself up against handset giant Nokia. As Microsoft was announcing its deal with Intel at the conference, Nokia was a few booths down unveiling a partnership with Texas Instruments to create -- yes, reference designs that will set the standard for the next generation of cell phones and applications.
TI's deal with Microsoft combines the chipmaker's OMAP processors and GPRS technology with Microsoft's Smartphone 2002 software. The partners say the reference designs will power new levels of service in voice, data and such multimedia capabilities as mobile access to e-mail and personal information, robust Web-browsing capabilities, audio and video playback and streaming, and rich gaming.
Microsoft's Suwanjindar said the alliance with Texas Instruments already is bearing fruit. Although the official reference designs will not be published until about the third quarter, products already combining the two companies' technologies can be considered a subset of the forthcoming designs.
"We'll be releasing our Stinger phone in several months," he said of the Microsoft cell phone expected in Europe this summer. "TI's OMAP processor is a key component."
Forward March
Microsoft executives stressed the potential for the Intel deal to lead a host of manufacturers to bring all things wireless to all people.
"Ultimately, we're striving to bring down the barriers to entry for device manufacturers and paving the way for a market explosion of innovative, smart devices at low cost, which will benefit customers, carriers and the industry at large," said Microsoft mobility division vice president Ben Waldman.
Intel is aiming specifically at the corporate market. "As the wireless handset industry integrates data, the combined solutions of Intel and Microsoft will enable wireless devices and applications to effectively become part of the enterprise environment at global businesses," said Ron Smith, senior vice president and general manager of the wireless communications and computing group at Intel.
Microsoft was similarly upbeat about the power of its TI alliance. "Utilizing Microsoft and TI's leading-edge technologies, the new smartphone reference design will make the transition from 2.5G product concept to production fast and simple for handset manufacturers," Waldman said.
Setting the Standard
Microsoft and Intel said they are filling a vacuum, citing a lack of a standard design platform in the wireless industry to speed the development and deployment of next-gen products.
Each device or application is created in its own environment. The Intel and Microsoft reference designs will allow developers to build from a standardized platform, ensuring that high-quality products are designed and deployed in a timely manner.
The Microsoft-Intel and Nokia-TI deals are far from the only attempt to shape the future -- and profit distribution -- of the next generation of mobile devices. Hewlett Packard has a design initiative with Texas Instruments under way, and Motorola and Ericsson (news - web sites) have announced similar efforts.
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