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ComputerWire: IT Industry Intelligence

Microsoft Corp's mobile strategy continues to gather pace with the announcement that the company has agreed to supply the leading Chinese domestic mobile handset manufacturer TCL Mobile, with both its Pocket PC 2002 Phone Edition and Smartphone 2002 operating systems.

Microsoft, having been shut out of the major global phone manufacturers is pushing a strategy of selling its products via original device manufacturers (ODMs).

These are predominately either Asian contract manufacturers such as High Tech Computer Corp (HTC) and Compal Inc, or small-volume phone manufacturers such as Sendo Ltd. The only major phone vendor committed to Microsoft, Korean manufacturer Samsung Corp, is rumored to be considering a move away from Microsoft software.

The other major vendors exclusively back Symbian Ltd, a London-based operating system developer that is a joint venture between them. But Microsoft is being extremely divisive in this market by trying to sell products directly to mobile operators that can be made in the Far East by contract manufacturers, cutting established vendors such as Nokia Corp out of the chain. The first device of this type, the XDA, will be launched this month by European mobile operator mmO2 Plc, and was manufactured by HTC.

TCL mobile, a venture 30% owned by Chinese computer manufacturer YCL International Holdings Ltd, sold 1.04 million handsets in the first quarter of 2002, compared to 114,000 the year before. China is now the largest single mobile market in the world, with 144.8 million mobile subscribers.

Wan Mingjian, president of TCL Mobile said: "In the last three years, the profit and revenue of TCL Mobile have grown tenfold... This partnership will enable us to accomplish our vision of becoming one of the world's top five manufacturers of multimedia and mobile communications products within the next three to five years."

TCL Mobile will manufacture devices based on Microsoft's mobile operating systems, but is likely to initially concentrate on the Pocket PC Phone Edition, which has so far been used by third parties to build two-handed combination PDA and Smartphones. TCL expects to commercially launch a handheld using Pocket PC Phone Edition in the fourth quarter of 2002, and a Smartphone in the second quarter of 2003.

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