HELSINGIN SANOMAT international

Business & Finance - Tuesday 22.10.2002

Battle between Nokia and Microsoft heating up

 Software giant expected to release smart phone together with Orange

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Software giant Microsoft is now planning a full assault on the mobile phone market. Mobile operator Orange is expected to launch a colour-screen handset, which would use Microsoft's wireless software Windows Smartphone 2002, in Britain on Tuesday. The new phone would be marketed under the Orange brand.
   
Nokia and other key handset manufacturers have attempted to keep Microsoft out of the mobile phone industry by developing their own Symbian operating system to compete with Microsoft's Windows.
   
The mobile phone industry has feared that margins would evaporate if Microsoft entered the game, similar to what IBM and other PC manufacturers have already experienced.
   
Mobile phones sold under the brand name of a mobile operator have been common in the United States, but the practice is spreading only now to Europe. An increasing number of such phones can now be expected, as the concept is an important part of Microsoft's current smart phone strategy.

The Symbian group won one round in the battle
on Monday, when Samsung, the world's third largest mobile handset manufacturer, announced it will licence the Symbian platform.
   
Symbian is now the operating system of choice for the world's top five mobile handset producers, who account for over 80 percent of global handset sales.
   
Samsung has previously licensed Microsoft's Smartphone operating system as well, but Opstock technology analyst Tero Kuittinen believes Samsung is now likely to use Symbian, as the Microsoft agreement was only signed "just in case".
   
Samsung reasoned that by choosing Symbian, it can take advantage of applications and services that have been developed by third parties for the Symbian platform. Technology consultant Risto Linturi observes that the role of these third parties is critical in the battle between Microsoft and the handset producers.
   
"Nokia's largest challenge is to get a sufficient number of software houses and equipment suppliers to create infrastructure around smart phones", Linturi explains.

Linturi has spoken for years
about how Microsoft sees wireless devices as a serious threat and challenge. According to the consultant, Nokia should now do what Microsoft did with Windows, or preach to equipment manufacturers that Symbian is the only viable solution.
   
Nokia's camera phone 7650 is the first mass market smart phone with the Symbian operating system. According to a recent study from British research company Canalys, Nokia was the market leader in smart phones in Europe in the third quarter of 2002. The Canalys figures show 666,000 Nokia smart phones sold, with the camera phone accounting for 620,000 of them.
   
Analyst Kuittinen observes that the most surprising thing in the battle between Nokia and Microsoft is how little Microsoft has achieved so far. For example, Microsoft has cooperated with a smaller British handset manufacturer, Sendo.
   
Kuittinen calls this cooperation a disaster. A Sendo phone with Microsoft software was due to come out already in September last year, but the launch has been repeatedly postponed. Kuittinen suspects the reason is that Windows is too complicated and heavy an operating system.

Previously in HS International Edition:
 Nokia earnings improve in third quarter; net sales expected to grow in 4Q (17.10.2002)

Links:
 Nokia home page
 Microsoft home page


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