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Gates: MS has 20m mobile market share, heads for 60%

But despite appearances, he hasn't been inhaling...

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Microsoft, previously thought to be finding the achievement of a million shipped phones somewhat challenging, already has 20 million and will shortly achieve 60 per cent of the market. Or at least, that's what Bill says.

Microsoft's marketing people do tend to use a bizarre form of counting which, if employed on the financial side, would surely get the Redmond beanies sent to prison for a very long time, but this one's particularly impressive. Speaking to the European Technology Round Table Exhibition in Berlin this week, reports Bloomberg, Bill Gates came up with this:

"If 500 million devices a year is the total maket, and we have 20 million now, then that will easily grow to be 60 per cent of the market... It's not a market where anyone, looking forward, will have 90 per cent of the market share."

How very reasonable and modest, you may observe, although the ease with which Gates thinks that 20 million (4 per cent) swiftly multiplies to 60 per cent might just strike you as a tad overweening.

How does he manage to make it 20 per cent though? Well, he cites AT&T, Vodafone, Samsung and Orange as outfits selling phones using Microsoft software, and he clearly does not entirely (or even largely) mean phones based on Microsoft's mobile phone platform. He means services, and while 20 million is probably still a bit of a stretch here, it doesn't look anything like so bizarre. And it'd be wrong to just dismiss this as a numbers fiddle to make Microsoft look good in a Bill speech (so OK, we'll stop doing that now) - Gates is actually telling us what is of most immediate importance to Microsoft in the mobile phone market (services, not directly 'owned' handsets), and therefore where it intends to apply leverage.

Which takes us on to that 4 per cent to 60 per cent ramp. Microsoft's services deals with mobile phone networks so far have tended to be very dull indeed, link ups that make it easier for business customers to connect their Microsoft mail systems, their desktops maybe, and their workforces' mobile phones being a prime example. Given that there are plenty Microsoft shops out there that find this kind of thing useful it's no doubt a living, but it's not 60 per cent of the business market, never mind the whole handset market, and even in his most optimistic dreams Bill couldn't possibly think 60 per cent share was easy. Possible, inevitable in the long run, yes, but easy, no.

And there's absolutely no way that easy access to all of your business-critical applications plays to 60 per cent of the whole mobile phone market. But other Microsoft services do. Normal people tend not to be too bothered about syncing with their desktops, picking up their email on the move or whatever, but they're pretty keen on chat, instant messaging and the like, and they'll do it more if it's easy, and easily available.

Microsoft already has IM deals with several mobile networks, and it will undoubtedly get more. There's competition, certainly, but the playing field here is tilted more in Microsoft's favour than elsewhere in the mobile phone services business, and the brand and the weight of the company's existing user base in the computer area will be an advantage. Interoperability, or a lack of interoperability, can also be exploited here in the way it has been in the computer business.

Who's going to be quick enough to stop him? Nokia? Sun? AOL? You could doubt that, and maybe in a couple of years Bill really will be Mr 60 per cent. ®

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