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Symbian to KO Microsoft at CeBIT?

If some more big outfits announce support, the war could be over before Redmond fires the first shot

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What Bill Gates and St. Paul have in common is an annoying one-note evangelical zeal. In defence of the latter it has to be said that at least he was involved in creating a major religion and only had one conversion. Mr. Gates keeps getting new pseudo-religious epiphanies with alarming regularity - and they tend to be glaringly obvious. Microsoft missed the Internet boat in the early 90s, but was able to undo some of the damage caused by spending a truckload of money. Even so, Microsoft's success in the crucial e-commerce and portal businesses has been lukewarm at best. The company won the browser war - only to find out that the real action was somewhere else than in controlling the browser software. The latest Microsoft awakening concerns the mobile telecommunications field. The realisation of the enormous market potential of mobile telecom arrives just as late as the Internet insight. But this time, Microsoft is not facing a motley crew of small, relatively inexperienced start-ups like Netscape. It's going against opponents that are both well-funded and determined to form a united front. Apparently it was only in 1998 that Microsoft started seriously to metastasize into mobile telecommunication, which gave the established telecom companies plenty of time to form a coherent battle plan. One key collaboration is the Symbian initiative to produce a universal new operating system for smartphones, others include Bluetooth and WAP. All of these projects have been under development in various incarnations for several years, even if the formal announcements of them have come much later. Bluetooth, for example, combined several in-house development projects aimed at creating a wireless interface technology connecting mobile phones with other IT devices like PC's, laptops, faxes and printers. The initiative is now being backed by pretty much everybody except Microsoft - from Toshiba to Intel. Cheap & fast By uniting behind common technological standards the various companies aim to pre-empt the attempt to introduce Windows in different forms into wireless technology universe. So far, the approach seems to be working. Symbian was able to bond the usually combative Motorola, Ericsson and Nokia. This unison created a critical mass that is now in the process of sucking Alcatel, Siemens and Sony into backing the concept. If this really happens, the battle for the control of the Internet phone operating system is over before it begins. Ericsson's launch of the MC 218 is signaling that EPOC devices are being introduced ahead of schedule - just a few weeks ago it was still assumed that EPOC products would debut "within a year". Now Ericsson is set to start selling its first offering this summer and Nokia and Motorola are widely expected to unveil EPOC phones by next fall. What gnaws Microsoft's guts perhaps the most is the low licensing fee approach used by the Symbian and Bluetooth initiatives. Bluetooth will actually cost nothing to companies implementing it - EPOC is widely assumed to cost companies just 20-30 per cent of what Microsoft wants to ask for a modified Windows OS for handheld devices. This puts Microsoft into a very difficult position. It can't compete with price, so it has to argue that cross-platform interoperability between PC Windows and handheld device Windows is so valuable to consumers that it's worth the price premium. But even though Windows is Microsoft's greatest asset, in this case it may turn out to be a liability. It doesn't matter that the PC operating system is suffering from elephantitis - Intel keeps cranking out faster chips and memory space keeps expanding at an equally break-neck speed. However, in the handheld device field, nothing matters as much as compactness and frugality. These are alien concepts to Microsoft, which has never paid much attention to the "less is more" bromide. 1999 - the decisive year? Nobody knows when the first Microsoft OS-equipped Internet phones might actually arrive to the market. But this time the "vaporware" threat carries little weight. The manufacturers are not paralysed by the possibility of a late Microsoft entry to the market, because the top three mobile phone makers in the world are already committing considerable resources to EPOC. The possibility of a Microsoft attack is not slowing down development of smartphones - on the contrary. Ericsson, Nokia and Motorola have been galvanized into action and intend to flood the mobile phone market with several competing EPOC and WAP devices, designed to create a uniform way to access internet via phones. So the ongoing roll-out of EPOC products is leaving Microsoft to try to push a Windows-based OS that comes late to the market, suffers from being relatively inefficient and unsuitable to voice applications according to most observers - and carries a stiff price premium. Moreover, the only phone manufacturer currently cooperating closely with Microsoft, Qualcomm, is bringing a new smartphone to market this spring or summer. And it uses Palm Pilot OS, allying Qualcomm with Microsoft's worst enemy on the PDA front. Qualcomm may shift to using some Windows variant in its future applications, but for the near future, the damage is already done. The scrappy Palm Pilot is still dominating the US and European PDA markets, leaving Windows-based PDAs scrambling to close the market share gap. This division in the PDA market is crucially weakening Microsoft's attempts to convince any major mobile phone manufacturer to join its bandwagon. If Microsoft can't even succeed in the PDA market, which is much closer to the PC market, what exactly is the rationale for adopting Windows Lite for mobile handsets? CeBIT 1999 may be a crucial turning point. It will be interesting to see what Microsoft can offer to the sceptical mobile industry audience. Any Symbian announcement by Sony, NEC or Matsushita would spell big trouble for Microsoft - these Asian companies with close ties to Microsoft are the last line of defence against Symbian. If they join the Motorola-Europe axis the game is over. Microsoft's previous collaboration announcements have been either nebulous (what's the actual, specific content of that British Telecom agreement, anyway?) or somewhat unconvincing (Qualcomm will become Microsoft's close ally... while launching a Palm Pilot smartphone). They need to show some real substance - new products and their launch dates, new corporate alliances that actually aim at some tangible results. The Symbian alliance will most likely try to overwhelm the fence-sitters by an onslaught of new products. By the end of next week we may have a much clearer picture of Microsoft's role in the field of mobile telecommunications. ®

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