"For us it doesn't matter who made the phone, that's not our business," spokesman Bengt Olsson said. "It had to be simple and quick to install. With Microsoft, you get the absolute advantage that you have the same menu as the one you're faced with at work."
The Qtek 7070 sells for 5,500 Swedish kronor (US$685), about the same as for a Nokia Communicator. The Qtek 1010, which looks more like an organizer with a larger screen, sells for 6,600 kronor. TeliaSonera wouldn't say how many it has sold.
Nokia CEO Jorma Ollila says he isn't fazed. Original-design manu-facturers are "basically too small to compete," he told investors at a June 11 briefing in Helsinki.
Microsoft doesn't scare him either: "If we look at the largest global software player with a PC legacy, clearly that software player lacks the experience, with the inevitable outcome," the 52-year-old Finn said.
The primary market where the Illinois-based Motorola has seen competition from original-design manufacturers is in China, said spokesman Alan Buddendeck.
For Sony Ericsson Mobile Communications Ltd, which has been unprofitable since it was formed in October 2001, they are complementary, taking responsibility for some products.
"In theory, they may become a threat in the future," said spokesman Ted Kanno.
Founded in 1997, High Tech Computer makes the XDA, a pocket organizer with an integrated phone, for MMO2 Plc in the UK, and a similar device for Deutsche Tele-kom's T-Mobile International AG unit. It also produces Orange's SPV, which was the first phone to use Microsoft's Smartphone software based on the Windows operating system.
Marketing director Martin Liu says the company can compete with bigger rivals because it can tailor-make the phones.
"A branded company will sell the same device to every client," Liu said in a telephone interview. "They can't customize for operators."
It became easier to enter the market after Texas Instruments Inc, the world's biggest maker of semiconductors for mobile phones, Motorola and Sweden's Ericsson AB started licensing the technology needed to build the brains of the handsets.
"Nowadays, anyone can become a mobile-phone maker," said Per Lindberg, an analyst at Dresdner Kleinwort Wasserstein in London.
"The technology is available for everyone." he said.
The rise of original-design manu-facturers has allowed Microsoft to enter the equation, because most newcomers aren't tied to using soft-ware developed by their own engineers or Symbian Ltd, a venture whose owners include Nokia, Moto-rola and Samsung.
"Nokia owns many customers and the operators want to change that," said Peter Wissinger, who heads Microsoft's European mobile-phone unit, from Stockholm.
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