- The Washington Times - Monday, September 15, 2003

CHICAGO (AP) — The fledgling competition to develop “smarter” cell phones for Web-hungry consumers is getting a powerful new tag-team entry: Motorola Inc. and Microsoft Corp.

The nation’s largest cell-phone and software manufacturers plan to announce an alliance today under which Microsoft software will power a series of new Motorola smart phones and wireless devices.

The products will start with the Motorola MPx200 phone that is to make its American debut in the fourth quarter and be carried by AT&T; Wireless Services Inc. They will be the newest entries in an increasingly competitive market.

Smart phones, combining the features of cell phones and hand-held computers, have been introduced in only a few countries and remain sparse in the United States. Fewer than 10 million of the estimated 450 million handsets being sold worldwide this year are considered smart phones.



But Gartner Inc. forecasts that volume could multiply six or seven times by 2007 as companies roll out increasingly sophisticated models to try to meet consumer demand for portable digital devices.

“The race for mobile technology will start heating up now in the U.S., with different handset makers and platform providers all vying for the hearts and minds of consumers,” said analyst Michael Gartenberg of Jupiter Research. “The market is one that hasn’t been won by any one company in particular yet.”

While Motorola hopes the new phones will help it chip away at Nokia Corp.’s big lead in the global handset market, Microsoft is still little-tested in cell phones despite its powerhouse status in desktops, the Internet and video games. The move is part of a push to get its software into nearly anything that connects to the Internet.

“This represents a key milestone for our business, to bring together Motorola’s expertise in designing and engineering handsets with our software capability,” said Andy Haon, director of product and solutions management for Microsoft.

Analysts aren’t quite ready to predict that the Redmond, Wash.-based giant will take over a new market.

“It’s very significant for them, but they still have an enormous amount to prove,” said Ben Wood, a telecommunications analyst for Gartner. “They have to make sure this is a success, get other manufacturers signed up and keep improving the software.”

Mr. Wood previewed one of the phones and said he saw “marked improvements” over previous products on the software platform and in design. “The main thing is it’s faster,” he said.

He said Microsoft-powered offerings have a long way to go to overcome the head start of Symbian Ltd., a Europeanconsortium that includes Nokia and Ericsson and is the top competitor for Microsoft in smart-phone software.

Motorola was a founding member of the Symbian venture but recently sold its stake to Nokia and Psion PLC.

The sleek, clamshell-design Motorola MPx200 — while laden with Web-related, multimedia and other functions — is first of all a cell phone, the two companies say.

Users can manage their personal information and synchronize their e-mail, calendar and contacts, browse the Web, download and listen to digital music and view video clips.

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