ANALYSIS-Microsoft looks left out of mobile frenzy
By Sara Ledwith, European Technology Correspondent
LONDON, Jan 11 (Reuters) - More big U.S. technology names lined up for a share of the wireless Internet boom on Tuesday, in a rising tide of partnerships which made global software leader Microsoft (NASDAQ: MSFT) look increasingly isolated.
Computing giant IBM (NYSE: IBM) and global software No.2 Oracle (NASDAQ: ORCL) both rolled out deals to develop wireless Internet access and cash in on demand for extra information technology services as mobile phones evolve into mini-computers.
Slated to be one of the hottest investment themes of this year, the market for Internet access through mobile devices is forecast to cover 500 million handsets worldwide by 2003, of a total of one billion cellular subscriptions.
IBM and Oracle both raised their profiles -- IBM as technology coordinator in a series of deals with mobile operator Vodafone Airtouch , Oracle in a tie-up with Cap Gemini . But Microsoft, the leading desktop software brand, was nowhere to be seen.
Vodafone, which as the world's leading mobile telecoms operator is seeking simply to maintain dominance in the new multimedia era, was not ruling out any potential partners, saying it planned to build on the alliances unveiled on Tuesday.
IBM HIGHLIGHTING LINUX
For IBM, the Vodafone deal came just days after it said that in computing it would make the Linux alternative operating system -- which has won broader acceptance as an alternative to Microsoft's Windows -- a centre-piece of its hardware strategy.
And the core partners in the Vodafone line-up include 3Com's (NASDAQ: COMS) Palm and Psion Plc , two key players in a fight to produce the operating system of choice for mobile devices.
IBM said no decision had yet been taken on the operating system or other technological aspects of the Vodafone platform, which some analysts said reflected the hasty nature of that deal.
But beyond a link Microsoft unveiled in December with Swedish telecoms group Ericsson , the Seattle-based giant has touted few major-name connections in the phone market.
Some analysts say its operating system for mobile devices, Windows CE, is looking less and less likely to win out, especially in the high-volume phones market, although it may carve out a niche in fatter, more complex gadgets.
"The industry is basically rejecting it," said Anita Farrell, telecoms equipment analyst at Merrill Lynch. She said EPOC, the system devised by an alliance led by Psion, was used to drive 80 percent of cellular phones sold.
"There's a real powerhouse there -- a lot of relationships are taking place," she said.
Microsoft recently unveiled a new range of "pocket PCs" from firms like Casio , Compaq (NYSE: CPQ) and Hewlett-Packard (NYSE: HWP) which use an upgraded version of CE-based software.
In the short term, analysts note the new mobile data market will certainly be growing fast enough to feed all comers.
But the eventual winners will be shaken out in about three to five years, and recent experience in technology makes it tempting to bet that "first-comers" in any new arena have an unassailable advantage.
So if Microsoft is to make the most of the surge in mobiles over the coming years, it needs to win more ground now.
"For now, for the early years it's a rising tide that lifts all boats," said Brian Skiba at Lehman Brothers. "Clearly Microsoft has passions to be in there as well, but the software question has not yet been decided." |
