Microsoft may be braked in growth sectors like phones, home..X, personal digital..
((and I'm think nervously home-area networking -- (POS)=personal operating space, (WPAN) = wireless personal area networks such as Bluetooth all devices such MP3 players and digicams and owens going to be connected )) :-)
Monday November 8, 7:21 PMBusiness News uk.news.yahoo.com
ANALYSIS-Microsoft may be braked in growth sectors
By Sara Ledwith, European Technology Correspondent
LONDON, Nov 8 - A stinging anti-trust setback for U.S. software giant Microsoft could clip its wings in fast-growth sectors where the group is less advanced than European and global rivals, analysts said on Monday.
U.S. District Judge Thomas Jackson's finding that Microsoft had wielded monopoly power hurt prices in European technology stocks generally, coming as some were at year highs, and raising doubts about who would drive future innovation.
"It does open a can of worms and with current valuations, especially in the U.S., I would say it's not helpful," said Bill O'Neill, international investment strategist at HSBC.
But as investors looked beyond taking profits, the Dow Jones European technology index picked up off earlier lows to trade off 0.28 percent around 1300 GMT. Some analysts said the damage could be more confined to Microsoft.
NO ATTACKING THE STANDARD
The ruling comes as Microsoft's Windows operating system -- the backbone to run desktop personal computers -- has become the industry standard, with 90-95 percent of global computers running on it and most software applications building on it.
Undoing this would be impractical and costly to everybody in the near term. "It's predominantly a case of 'there isn't really very much we can do there'," said O'Neill.
Microsoft rivals like Oracle , Sun Microsystems,
, Apple Computer and the "open-source" Linux are U.S.-driven and would have a long way to grow, and no European challengers are in the wings.
Another analyst said Microsoft's strength in operating systems has actually fuelled innovation by simplifying things.
"In the mid-1980s there were four operating systems -- this used to up everyone's development costs," he said. "Windows is the standard. Who would be dumb enough to attack the standard?"
ANTITRUST CONCERNS MAY BE BRAKE
Where Microsoft looks more vulnerable is in fields where it does not dominate -- for O'Neill this was predominantly in the Internet arena, but other analysts highlighted fast-growth markets like mobile Internet and digital home entertainment. With a significant future wave of growth seen coming through Internet access through mobile devices -- a market with clearer mass potential than the personal computer -- this could strengthen some European players' hands, analysts said.
"The difficulty they have now is the fear factor -- what can they do and what can't they do?" said Nainish Pabna, technology analyst at Nomura Securities. "I think we have to look at the next growth stage."
He cited the historic reluctance -- founded on anti-trust concerns -- of computer giant IBM to buy the Microsoft operating system. "We might see something similar here."
While Microsoft has been moving increasingly aggressively to win ground in both wireless data and the set-top box home entertainment arena, it may now find its growth braked.
In mobile devices, that could point to gains for the partners in the Psion (LSE: PON.L - news) -led Symbian alliance, or 3Com
through its palmtop leader Palm Computing, fighting Microsoft's Windows CE for dominant status.
Industry forecasts suggest that by around 2003 there will be over one billion mobile subscribers, up from over 300 million now -- the business works at a radically larger scale than the 185 million PCs which were shipped globally in 1999.
In digital home entertainment -- accessing multimedia and the Internet through set-top boxes -- Pabna said 10 or so players globally are battling for dominance in operating systems. "Now (Microsoft) are definitely going to be behind," he said.
Microsoft has been buying up holdings in this area -- like its 7.8 percent stake in Dutch-based cable television operator United Pan-Europe Communications NV -- which, going forward, could prove harder for it to hold on to
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