Describes two stages in the battle for supremacy in the use of software for the mobile phone market.

If attack is the best form of defence, then the mobile phone companies are striking out to repel the advances of Microsoft in their market. The reason is simple: if Microsoft’s Smart Phone operating system becomes the de facto standard for the next generation of mobile phones, mobile phone manufacturers could become little more than assembly companies. Bob Schukai, Motorola’s 3G product manager for Europe, says: ‘We’re determined not just to be box providers. That puts you in the PC game and you can get commoditised very quickly.’

Mobile phone companies are using three major defence strategies: alliances, licensing and application development. The latter has seen manufacturers offer consumers content as well as hardware products. Motorola, for example, has linked up with AOL Time Warner to provide handset owners with downloadable ring tones, screen savers and games featuring TV and film characters. Motorola has also formed the MAGNET (Motorola Applications Global Network) programme which helps third-party application developers with training, technical assistance and marketing support.

In 1998, the major handset manufacturers joined forces with Psion to form Symbian, a software licensing company that has developed an operating system (also called Symbian) for data-enabled mobile phones. Today, Symbian’s members are Matsushita, Nokia, Motorola, Psion, Siemens and Sony Ericsson, representing almost half of the handset market. Symbian’s operating system has been licensed to manufacturers representing more than 70 per cent of the handset market, although so far only a handful of Symbian-enabled mobile phones have been announced or launched. Symbian has also worked with Intel to optimise the latest version of its operating system to work with processors that use Intel’s Xscale technology, designed for wireless computing.

Nokia is also licensing its Series 60 platform to handset manufacturers wanting to develop smart phones. Series 60 includes Nokia’s software source code, Texas Instruments’ Open Multimedia Applications Platform (OMAP) chipset and the Symbian operating system. But not every handset manufacturer has opted to join OMAP or license Series 60 technology. Sendo, a mobile phone manufacturer with headquarters in the UK, is one of the new players in the market (it was founded in 1999) and has opted to support Microsoft’s smart phone operating system. Ron Schaeffer, Sendo’s head of product strategy and planning, explains why: ‘Microsoft has done a good job in getting Windows CE [the technology behind Smart Phone 2002 operating system] down to a size and processing requirement that was reasonable to put in smart phones. They also did lots of work on the user-interface and didn’t just dump Windows on to the size of a telephone screen.’

Another attraction, adds Mr Schaeffer, was the number of Windows developers: ‘There are 6m Windows developers out there with Microsoft development tools that can readily support Smart Phone 2002. The interest we’ve had from developers has been tremendous’. Mr Schaeffer admits that Sendo’s decision to support Microsoft wasn’t solely about the technology: ‘With Smart Phone 2002 we have a higher seat at the table than we would with OMAP.’

QUESTIONS

1. Why are there battles going on between mobile manufacturers and Microsoft? What is the logic behind this?

2. Critically assess the logic behind the strategies of the main contenders.