TELECOM Digest OnLine - Sorted: Microsoft Venture Adds to Blackberry Woes

Microsoft Venture Adds to Blackberry Woes

Laurence Frost (
Sun, 12 Feb 2006 21:08:41 -0600

By LAURENCE FROST, AP Business Writer

Microsoft Corp. has won backing from major cellular networks for a new
generation of phones designed to transform mobile e-mail from
executive accessory to standard issue for the corporate rank-and-file.

The partnerships, with operators including Vodafone and Cingular, to
be announced Monday at a mobile industry gathering in Spain, could
spell more trouble for the embattled Blackberry and other niche e-mail
technologies, analysts say.

Unlike the Blackberry and its peers, phones running Microsoft's latest
Windows Mobile operating system can receive e-mails "pushed" directly
from servers that handle a company's messaging - without the need for
a separate mobile server or additional license payments.

As costs fall, Microsoft is betting companies will extend mobile
e-mail beyond top management to millions more of their employees.

"We're at the tipping point of seeing exponential growth in this
area," said Pieter Knook, the U.S. software giant's senior vice
president for mobile and embedded devices.

On the opening day of the 3GSM phone show, Hewlett-Packard Co. and
three other handset makers are expected to launch the first Windows
smartphones equipped with the new e-mail technology out of the
box. HP's new iPAQ HW6900 Mobile Messenger also offers Bluetooth and
Wi-Fi connectivity.

Vodafone Group PLC is to sell the phones under its own brand, in a
joint marketing deal, targeting companies that already run Microsoft's
Exchange software on their servers. Exchange is the collaborative glue
behind Microsoft's popular Outlook application, which manages
appointments and electronic address books in addition to e-mail.

Together with Cingular Wireless, Orange and T-Mobile, Vodafone will
also deliver phone software upgrades to subscribers who are already
running the Windows Mobile 5.0 operating system on their smart phones.

Microsoft laid the groundwork for its e-mail offensive with an October
update to Exchange -- which led the server software market last year
with 48 percent of global sales, according to technology research firm

Some observers have been predicting that the new technology will hurt
Blackberry's maker, Canada-based Research In Motion Ltd (RIM).

Strand Consult, a Denmark-based IT research house, expects companies
worldwide to invest in much broader mobile e-mail access for their
employees in 2006.

"At the end of the year, many will be asking themselves whether they
really needed a Blackberry handset from RIM to check mail -- and RIM
might be asking themselves what went wrong," Strand wrote in a
research note.

"Microsoft will most probably overtake RIM as the leading mobile
e-mail provider."

Mobile messaging prices are already falling.

In the United States, Cingular last year began bundling an e-mail
service from Blackberry rival Good Technologies Inc. with its
unlimited wireless Internet package, at no extra charge.

Wireless access to e-mail, calendars and contacts -- once the preserve
of jet-setting executives and professionals in law and finance -- is
increasingly seen as a useful tool for a wider array of workers,
keeping them connected wherever they may be.

RIM has 4.3 million Blackberry customers, most of then in the United
States. It enjoys by far the largest single share of a wireless
e-mail market now estimated at about 10 million users globally.

But Blackberry's future has been clouded by a court decision that it
infringes U.S. patents belonging to NTP, a tiny U.S. technology
company that is demanding license payments while seeking an injunction
to shut down RIM's servers. A decision could come later this month.

Blackberry Connect, a RIM service offering mobile e-mail on rival
operating systems such as Symbian has also failed to make a major
impact so far.

"This means the door's been left open for others, including
Microsoft," said Andrew Brown, an analyst with consultancy IDC.

Microsoft is well-placed to leverage its leadership in server software
-- as well as the 400 million PC users already familiar with its
Office applications -- but still has work to do, Brown said.

In Europe, larger Windows-powered smart phones trail more compact
devices like Nokia's Symbian-based handsets. To make real inroads,
Brown said, Microsoft must harness smaller models than the Windows
phones to be unveiled Monday by HP and rival computer maker Fujitsu

Microsoft will also have to persuade customers that it can match RIM's
strong data security record. "IT decision makers' experience of
Microsoft hasn't always been a happy one, so there is some convincing
to do there," Brown said.

The 3GSM trade show runs Monday through Thursday in the northeastern
Spanish city of Barcelona. Last year the event drew 34,000 visitors
from more than 170 countries.

Copyright 2006 The Associated Press.

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