3GSM - MS debuts Smartphones, Wireless Pocket PCs

Microsoft Corp. and its manufacturing partners debuted gadgets based on its new Wireless Pocket PC platform at the 3GSM World Congress in Cannes Tuesday. Attendees are being given a hands-on sneak peek at the Pocket PC 2002 Phone Edition and the Windows-Powered Smartphone 2002 device (previously known by the code name Stinger), which will go on sale from partners in Europe and U.S. by the end of June.

The Smartphone devices are primarily mobile phones with some PDA (personal digital assistant) functions, while the new Pocket PCs are PDAs that also act as mobile phones, said Magnus Ahlberg, Microsoft's mobile marketing manager EMEA (Europe, the Middle East and Africa).

Carriers that sell the Pocket PC 2002 Phone Edition devices will most likely use their own brand names. The first branded Pocket PC 2002 Phone Edition devices will be the HP Jornada 928 Wireless Digital Assistant (WDA) from Hewlett-Packard Co. and the XDA from U.K.-based mobile phone operator mmO2 PLC, he said.

The carriers that will brand the various devices will release prices for the products shortly, Ahlberg said, though he expect the devices would be competitively priced so as to compete with products already on the market.

Since announcing last year that it will jump into the highly competitive PDA market with the likes of Handspring Inc. and its combined mobile phone-PDA Treo and Research In Motion Ltd.'s Blackberry wireless e-mail device, Microsoft has wasted little time in promoting its plans for the Pocket PC platform. At the CES trade show in Las Vegas in January, Microsoft began outlining details for products that blend telephony functions with PDAs. Microsoft is now showing off the actual devices.

"By offering both the Pocket PC Wireless and the Smartphones, we are trying to cater to all needs across the market. For example, the Smartphones, which are being branded by Orange (SA, the French mobile phone group owned by France Télécom SA), Vodafone (Group PLC), T-Mobile (International AG in Germany) and Telefónica (SA in Spain), are in trials now and we are finding that they are strong (products) even in the lower segments of the markets," Ahlberg said.

Microsoft enters the market with many factors in its favor, one of the biggest being that users who are already comfortable using Microsoft on the PC will be inclined to continue using that same software on their PDAs, according to Paolo Pescatore, a senior wireless mobile communication analyst at IDC.

"Microsoft already has so much to offer from the fixed Internet world as well as from the PC world. Microsoft is going to be a big player in the wireless device market from a content perspective and from a software perspective. The company is taking the values of its own operating software from the PC and putting it on to the PDA and that has the large mobile device makers like Nokia really worried. A big part of the wireless device market is going to be about how many services you can offer users, and Microsoft already has a variety of attractive services," Pescatore said.

According to Ahlberg, there are already over 10,000 registered MS Mobility applications developed for the Wireless Pocket PC platform. "Being able to offer services over the mobile phone PDAs will be key for the carriers as that is where the most revenue will be generated. We are going to be able to offer thousands of services," Ahlberg said.

Along with giving demonstrations of the Pocket PC 2002 Phone Edition and the Windows-Powered Smartphone 2002, Microsoft also made a host of product and partnership announcement at Cannes including:

--The availability of its Developer Tools: Smartphone 2002 Beta software development kit (SDK) and Pocket PC 2002 SDK with Phone Edition support.

--The launch this week of Microsoft's Mobile Information 2002 Server, which delivers over-the-air synchronization for Pocket PC 2002 and Smartphone 2002 devices.

--A mobile alliance between Microsoft and Intel Corp. to jointly develop next-generation -- including 3G (third generation) -- reference designs for Pocket PCs and Smartphones.

The Pocket PC 2002 Phone Edition is a PDA with a high-resolution color touch screen comes with built-in combined GSM (Global System for Mobile Communication) and GPRS (General Packet Radio Service) technology or Code Division Multiple Access (CDMA)-based 1XRTT, Ahlberg said.

"The Pocket PCs will make it to the market in Europe first with the mmO2 device and the HP device available by the second quarter. We'll lead in Europe then, in the U.S. (the HP device) will come not that far after that, by the end of the second quarter. There will also in the future be other versions of the Wireless Pocket PC from other carriers, including Orange," Ahlberg said.

The Wireless Pocket PCs have larger screens than the Smartphones and are intended to be operated with two hands using a touch-screen stylus, Ahlberg said. Unlike the Smartphone, the Pocket PCs include such applications as Pocket Word and Pocket Excel.

And though the Pocket PCs can be used as a mobile phone, being held directly to the ear, the device comes with a small built-in speakerphone and Microsoft is also selling headsets as well as smaller Bluetooth attachments that fit into the user's ear. "You can use the device as a regular mobile phone, but it is a little bulky for that and we think people will prefer this more elegant option," Ahlberg said.

The HP Jornada 928 WDA features:

-- integrated 900MHz/1800MHz GSM/GPRS;

-- a second LCD (liquid crystal display) for GSM status;-- Class B/multislot class 8 GPRS;-- 32M bytes of flash ROM and 64M bytes of RAM-- USB (Universal Serial Bus) and IR (infrared) ports with serial synchronization;-- Pocket IE (Internet Explorer) and WAP (Wireless Application Protocol) 1.2.1 browsers; -- SIM (subscriber identity module) Toolkit with cell broadcast and unstructured supplementary services data (USSD), which is considered a more efficient way of deploying WAP content than SMS (Short Message Service) technology;- And the J2ME (Java 2 Platform, Micro Edition) MIDP (Mobile Information Device Profile).

The HP Jornada 928 WDA will also come with lids in a variety of colors.

Both the mmO2 and the GSM carrier-branded U.S. versions of the Pocket PC 2002 Phone Edition (which will be announced at a later date) will be manufactured by Taiwan's High Tech Computer Corp. (HTC), the manufacturer of Compaq Computer Corp.'s iPaq, Ahlberg said.

Along with its XDA, mmO2 will by the second quarter distribute the combined mobile phone-PDA Handspring Treo for use on its GSM networks in Germany, Ireland, the Netherlands and the U.K. By the end of the year, mmO2 will bring out a software upgrade allowing the Treo to run over GPRS mobile data networks as well. The Treo runs on Palm Inc.'s Palm OS.

"O2 is trying to cover each segment of the business market," said IDC's Pescatore. "So O2 has plans to sell a branded version of Handspring, Pocket PC and Palm as well. But what Microsoft, and to a somewhat lesser extent O2, is banking on is that people will feel more comfortable using the XDA because it most resembles the experience they have on their PC," Pescatore said.

From a PDA perspective, the leader is still Palm, but I believe that is changing. The new PDAs coming out now are focusing more on connectivity and the services and applications that can come with wireless connectivity (such as the ability to read and send Word and Excel files). In that sense, PDAs are becoming more Pocket PC-based," Pescatore said.

The operating system for Microsoft's Smartphone is based on its Stinger software. "In terms of competition, I'd say that Symbian is our primary competitor," Ahlberg said. The Epoc-based operating system from Symbian Ltd. is an open software platform that has been licensed by, among others, Fujitsu Ltd. and Sanyo Electric Co. Ltd. Symbian is co-owned by Nokia Corp., L.M. Ericsson Telephone Co. and Motorola Inc.

Ahlberg dismissed the idea that Linux offered any real challenge to Microsoft at the moment. "Linux lacks the functionality and security in the wireless market. It's more of a plaything right now," Ahlberg said.

IDC's Pescatore sees Symbian as leading the way in the smart phone market. "Symbian has the advantage at the moment, but things are also changing in this area, as the smart phone moves into becoming a multimedia device that will have voice capabilities, as opposed to the other way around. I think MMS (Multimedia Messaging Service) will be big and it will be the application that really starts GPRS," Pescatore said.

"I wouldn't rule out the idea of Linux, simply because it has such popular support," Pescatore said.

Linux PDAs are just beginning to make their way to market, with Sharp Corp.'s Zaurus and the Royal Lin@x PDA from Royal Consumer Information Products (a division of Olivetti Office USA) both expected to be released by the second quarter.

Red Hat Inc. and 3G Lab Ltd. have been developing an operating platform for next-generation mobile phones and connected PDAs dubbed eCos/M3, which is to be based on Red Hat's eCos (embedded configurable operating system) product.

As for Microsoft's Smartphone, its hardware partners are HTC, Samsung Electronics Co. Ltd., the U.K. mobile phone manufacturer Sendo Holdings PLC, and just announced Tuesday, Compal Electronics Inc., Ahlberg said.

The Smartphone's branded carriers will be Cingular Wireless LLC in the U.S., Alcatel SA in Australia and Vodafone, Orange, T-Mobile and Telefónica SA in the EMEA region, Ahlberg said.

Microsoft wants to make the Smartphone reference design, developed with Texas Instruments Inc., available to as many OEM (original equipment manufacturer) businesses as possible, Ahlberg said.

"In terms of functionality and services, anything will be possible since we are just providing the basic blueprint. The carriers can come up with the devices and services that best suit their customers," Ahlberg said.

It is the desire to make its Smartphone and Wireless PDA as ubiquitous as possible that also led to the Microsoft-Intel mobile alliance, he said.

"The purpose of the Microsoft-Intel mobile alliance is to come up with device designs that will actually promote the rapid development of next-generation wireless applications and services like 3G and to speed up the time-to-market for the wireless device manufacturers and software companies. We want to lower the barrier to get more people in this area," Ahlberg said.

As part of that joint agreement, Microsoft will support Intel Personal Client Architecture (PCA), and the first Microsoft/Intel designs will be unveiled later this year, Ahlberg said.

Ahlberg concedes that Microsoft is up against stiff competition in the wireless PDA/mobile phone space, but he contends that Microsoft has moved quickly enough to get an attractive package to market. "This is where it starts coming together, where carriers come together with OEMs. The pieces are coming together in a package that looks very nice from an end user scenario," Ahlberg said.

The 3GSM World Congress in Cannes runs from Feb. 19 through Feb. 22. More information can be found on the show at http://www.3gsmworldcongress.com/.