Microsoft gears up for smartphone assault

Microsoft's battle for mobile phone software supremacy will heat up at this week's Cellular Telecommunications and Internet Association annual conference in the US.

Microsoft plans to kick off the CTIA conference in New Orleans today with an announcement that it's working with another wireless device maker, Canada's Research In Motion (RIM). The companies plan to link RIM's email programs to mobile phones using Microsoft's software.

Microsoft chairman Bill Gates will make a relatively rare appearance at the conference to drum up support for his company's Pocket PC Phone Edition and Smartphone 2002 software.

The company will also announce that US carrier Sprint PCS plans later this year to sell two camera phones - the Samsung i700 PocketPC and the Hitachi G-1000 - that will use a version of Microsoft smart phone software.

"We feel pretty good about our position," Microsoft spokesman Ed Suwanjindar said. "A year ago, we didn't have Pocket PC phone editions shipping. A year later we have more than two dozen operators shipping. We're looking forward to great things."

Microsoft, Symbian and PalmSource are battling over what operating system handset makers use to build new generations of mobile phones that combine the features of a personal digital assistant and a phone. For now, it's a very young market with about two million devices in circulation. By comparison, there were 400 million traditional mobile phones sold last year.

But the market for the phones is expected to grow significantly. By 2006, IDC expects Symbian will have increased its market share in the powerful phones to 53 per cent from its current 46 per cent. Microsoft will have about 27 per cent of the market, with Palm at 10 per cent. IDC predicts that Linux could take as much as 4.2 per cent of the market.

Microsoft considers its biggest competition the rival phone operating system from Symbian, a company owned by Nokia, Motorola, Ericsson and most other major handset makers. Microsoft may have signed up HTC and two small handset makers to make phones using its smartphone software, but most major wireless device makers are already developing Symbian phones, said Symbian vice president Peter Bancroft.

Every time Microsoft signs up another handset maker, Symbian does too. Last week, it was revealed that Motorola is developing a Symbian-based phone, and Symbian is also working with Research in Motion. Symbian is expected to make additional announcements about its licensees at this week's CTIA.

"What you're looking at is an iceberg," said Symbian representative Peter Bancroft. "What you're only seeing now is the tip."

Microsoft is also battling PalmSource, another major maker of operating systems being used in new generations of mobile phones. PalmSource chief executive David Nagel said his company's operating system is strongest within the United States, where it powers about 75 per cent of the smartphones on the market.

He saved his most pointed criticism for the early iteration of Microsoft smart phones, which were bug-filled and took up to 25 seconds to boot up. They were "a fantastic commentary of what doesn't work".

But PalmSource itself may ultimately fall victim to Microsoft. PalmSource's software is the second most popular software for smart phones worldwide. IDC projects that by 2007, Microsoft will have overtaken PalmSource for second place in the market.

Ben Charny writes for News.com