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Tue, Feb 18, 2003 - Page 12 News List

Microsoft to detail cellphone, organizer plans

BLOOMBERG , CANNES, FRANCE

Microsoft Corp will detail plans for a Deutsche Telekom AG cellphone with its software and demonstrate an organizer from Samsung Electronics Co that uses its programs to make phone calls and check e-mail.

Samsung is looking for wireless carriers to distribute its SGH-i700 device, which also has a built-in digital camera, said Vince Mendillo, director of marketing for Microsoft's mobile devices division. Pricing and availability will be up to the carriers, he said.

Microsoft, which began selling the first mobile phone using its software in October with Orange SA, lags Nokia Oyj and its Symbian Ltd consortium in the market for software that runs cell phones with features such as e-mail and music. Microsoft, the world's largest software maker, has posted losses for the unit that makes its phone and organizer software.

"Symbian has a decent size head-start over Microsoft's Windows-powered `smart phones' but this market is still wide open," said Kevin Burden, an analyst at market researcher IDC. "Nokia still has all the tier-one mobile-phone vendors planning to use its software."

Microsoft Mobile Devices Vice President Juha Christensen will announce the products later today in a speech at the 3GSM World Congress conference in Cannes, France.

Deutsche Telekom's T-Mobile International AG will begin offering a phone with Microsoft software in "major European markets" by October. The phone will be made by Taiwan's High Tech Computer Corp and will let customers get e-mail, send text messages and photos and access the Internet.

T-Mobile will also be the first carrier to sell a new service, called Pocket MSN, from Microsoft's MSN Internet unit that will let customers get information from the Web and check accounts with Microsoft's Hotmail free e-mail service.

Pocket MSN allows customers to read and write e-mails when they are in area with no wireless service, MSN Marketing Director Bob Visse said. It's also easier to use than a previous MSN Internet service for phones and organizers, he said.

In order to provide customers with some of these services, T-Mobile will buy software from Microsoft for running its server computers, Mendillo said. Microsoft will also show a design for a phone it developed with Intel Corp.

Microsoft's progress in the phone market has been slow, analysts said. The company, which initially expected to have a phone on the market in 2001, only has phones on sale with its software in Europe. Phones will go on sale in the US later this year.

The company's Mobility group, which makes software for phones and organizers, lost US$39 million in the quarter ended Dec. 31, on sales of US$21 million.

"We are making a long-term investment," said Mendillo. "We have a lot of patience."

Symbian is a joint venture of some of the world's top mobile phone makers, including No. 1 Nokia and No. 2 Motorola Inc. Nokia is the driving force behind Symbian and does the bulk of the software work, analysts say. Microsoft is hoping that competition between Nokia, Motorola and other consortium members in cellphone manufacturing will undermine Symbian's software business.

Motorola last week said it will use the Linux operating system, rather than Symbian's products, for some of its phones.

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