re: Wireless Data Tornado: MSFT v. NOK (and SUNW) - Liberty Alliance
Very good article from WSJ below about a war that has been raging in the background for for several years.
It gained some notoriety when Bill Gates e-mails that discussed being forced to work with "CDMA and the Seven Dwarfs" (after being excluded from Symbian which uses the Epoc OS) were surfaced by DOJ 2 years ago.
SUNW not specifically mentioned in this article but Nokia and Sun are certainly allied in this war and a new alliance (Liberty Alliance) has been recently formed that complements the existing Symbian Alliance.
Charter Members of the Liberty Alliance Project include ActivCard, American Airlines, the Apache Software Foundation, Bank of America, Bell Canada Enterprises, Cingular Wireless, Cisco Systems, CollabNet, Dun and Bradstreet, eBay, Entrust, Fidelity Investments, Gemplus, GM, Global Crossing, i2, Intuit, Liberate Technologies, Nokia, NTT DoCoMo, OpenWave, O'Reilly and Associates, RealNetworks, RSA Security, Sabre, Schlumberger, Sony Corporation, Sprint, Sun Microsystems, Travelocity, United Airlines, Verisign, Vodafone and More.
Another Liberty Alliance WSJ article called "Sun Microsystems Recruits Partners To Challenge Microsoft's Passport"is here:
Message 16419543
Nokia's press release on the new alliances formation is here:
Message 16417465
Microsoft's handset code named "Stinger" is mentioned in the article below. First "Stingers" will be GPRS models and Samsung is (over) due to deliver the first US models to VoiceStream.
>> Forget Browsers, the Real Battle Is in Software for Mobile Phones
David Pringle
Kevin Delaney
Wall Street Journal
Forget the games console or browser wars. The most intriguing technology battle these days is a fierce contest for supremacy in mobile-phone software between Microsoft Corp. and Nokia Corp.
Best known for its ubiquitous mobile phones, Nokia is using its clout in the wireless industry to sell entertainment services such as games and ringtones to consumers, and business software to companies. In short, the Finnish company is fast becoming a software company for the mobile-phone industry.
Microsoft, which wants to become as powerful in the wireless sector as it is in the personal-computer market, isn't about to cede the mobile-phone software market to some Nordic wannabe. So, the Redmond, Washington, giant is fighting back by trying to weaken Nokia's grip on the handset market.
"Nokia wants to become the Microsoft of the mobility area," says Magnus Ahlberg, a Microsoft marketing manager, without a hint of irony. Microsoft executives, he adds, "don't want that to happen." To counter Nokia's growing dominance of the mobility market, Mr. Ahlberg and other Microsoft brass have spent the past year wooing European mobile-phone operators, such as Britain's Vodafone PLC and Spain's Telefonica SA, which sell the majority of mobile phones to consumers and businesses. And these efforts are beginning to reap some rewards: Microsoft is expected to announce Thursday that a European mobile-phone operator will launch a high-end handset running Microsoft's software. The gizmo is expected to resemble a personal organizer, but will include a built-in wireless connection. Such an announcement would cap several other recent Microsoft deals with operators -- including Vodafone and Orange SA, a unit of France Telecom SA -- to supply wireless technology.
Stakes Are High
There is much at stake. Nokia and Microsoft are looking for new sources of revenue as demand slows for their core technologies -- new handsets in Nokia's case and personal-computer software in Microsoft's. They both want a slice of the revenue from wireless-data services, a fast-growing market that Microsoft believes is already valued at $100 billion a year globally.
Nokia says that it wants its Club Nokia portal, which sells ringtones, games and graphics software, to be a third engine of growth after handsets and wireless infrastructure. Although Nokia officials won't provide investment figures, some analysts say the Finnish giant now spends three to four times as much developing software for mobile phones as it does designing the handsets themselves. Despite its software efforts, Nokia denies that it is seeking to monopolize the mobile sector.
The outcome of this struggle between two technology superpowers will have ramifications beyond the wireless industry. Microsoft is spending billions of dollars developing so-called Web-services technology to make Web sites communicate automatically with one another. Some of these Web services will be designed to work with wireless devices, and Nokia, with a 35% share of the global mobile-phone market, could undermine Microsoft's efforts. Nokia is backing rival Web-services technology from two Microsoft foes, International Business Machines Corp. and Sun Microsystems Inc. "Nokia will not use Microsoft software. They are bitter enemies with Microsoft," says Per Lindberg, a London-based analyst with Dresdner Kleinwort Wasserstein.
Roots of Rivalry
The rivalry between Microsoft and Nokia can be traced back to 1998. That is when Nokia snubbed Microsoft to team up with British computer company Psion PLC and other leading handset makers, including Telefon AB L.M. Ericsson and Motorola Inc., to form Symbian Ltd., a London-based consortium. Its mission: to develop mobile-phone software that would prevent Microsoft from extending its dominance of the PC market into the handset sector. Nokia's decision to join Symbian left Microsoft boss Bill Gates fuming.
Locked out of the leading handset makers, Microsoft tried to outflank Symbian by targeting the handset makers' customers -- the mobile-phone operators. Microsoft estimates that 70% of all handsets are sold through the telephone companies.
But Microsoft's initial attempts to squeeze its software into small portable devices were widely derided. Its early systems, based on its PC software, were regarded as over elaborate and too power-hungry for mobile phones. As a result, most mobile-phone operators shunned the U.S. giant.
Microsoft did win a contract from U.K.-based Orange to develop software for a new phone with a built-in video camera, but the project was hardly a success. The videophone was completed much later than planned, to the dismay of Hans Snook, then chief executive of Orange, who publicly blamed the delay on Microsoft's software. "We are working together with Microsoft, which is maybe not a nice story to tell at the moment," Mr. Snook told a conference run by Symbian in the fall of 2000. Microsoft denies that it was the cause of the delay.
Gaining the Upper Hand
But just around the same time, Microsoft's mobile-phone software fortunes began to turn.
In September 2000, the U.S. company persuaded Vodafone to test a new product called Mobile Information Server (MIS). About one-third of European companies' e-mail systems run on Microsoft software and MIS makes those systems accessible from a mobile phone. Nokia has a similar product called Nokia Mobile Office. Three months later, a team of 10 Vodafone executives went up to Microsoft's new wireless center in the harbor district of Stockholm to discuss how the two companies might team up to sell the software. It was clear to everyone that Microsoft was hungry to strike a deal. After all, Vodafone is the biggest mobile-phone operator in the world.
Over the next two days, Amit Pau, managing director of Vodafone (United Kingdom) Multimedia and his colleagues won several concessions as Microsoft pushed to seal the deal. Microsoft wanted its long-standing partners, such as systems integrator KPMG Consulting Inc., to install MIS on customers' premises. But Vodafone insisted that it would only sell MIS as a managed service run by its own employees on its own servers. The giant operator also got top marketing billing. The service, which was launched in June, has been branded Vodafone OfficeLive, followed by the subtitle: delivering Outlook Services powered by Microsoft Mobile.
"We desperately needed their input for our next-generation products," says Jonas Persson, who negotiated the deal for Microsoft. "We are not in a position to demand right now that our branding should be all over the place." Still, the deal gave Microsoft some much-needed credibility in the wireless market. "The Vodafone deal put us on the map. It had the sales people bouncing off the walls," says Robbie Ray Wright, director of Microsoft Mobility Group EMEA.
At the same time, Microsoft was beginning to make inroads into the hand-held computer market. Although its first software programs for controlling hand-held computers flopped, devices using Microsoft's latest operating system, dubbed Pocket PC, have proven to be a hit. Devices running Pocket PC, which include machines made by Compaq Computer Corp. and Hewlett-Packard Co., accounted for one-third of the European personal organizer market in the second quarter of 2001, according to London-based market research firm canalys.com. The latest Pocket PC devices come with built-in mobile phones and Microsoft claims that 20 hardware companies have agreed to build devices that use the operating system. On Thursday, the software giant plans to launch a new version of the Pocket PC software, which will include enhanced wireless software.
Interest in Stinger
Microsoft also has managed to persuade some smaller mobile-phone makers, such as Samsung Electronics Co. of Korea and Britain's Sendo Holdings PLC, to develop mobile phones running its handset operating system, known as Stinger. Steve Ballmer, Microsoft's CEO, demonstrated Stinger on a color-screen phone at a trade show in Las Vegas in March. Although Microsoft has always fiercely protected the look, feel and branding of its PC software, Mr. Ballmer signaled at the trade show that mobile-phone operators would be able to customize Stinger. "It's a device, of course, that a carrier can take and brand and differentiate and make their own," he told the audience.
Microsoft's Mr. Ahlberg argues that operators' brands have been overshadowed by that of Nokia's and that they need to take back the initiative. Too many customers, he sighs, tend to "walk into a carrier store and say, 'I want to have a Nokia and give me any subscription,' " he says. Microsoft has even gone as far as buying a stake in Sendo, which specializes in producing customized handsets for operators.
Customized phones appeal to Richard Brennan, an executive vice president at Orange, who has been in discussions with Microsoft about Stinger. "We are definitely looking at Stinger devices," he said in an August interview, "but they would have an Orange interface and look and feel." A few weeks later, Orange signed an agreement to work together with Microsoft on the development of mobile phones and associated servers.
That was a big deal for Microsoft, given the delays with Videophone and the fact that Orange's main infrastructure supplier is Nokia. Vodafone, together with Telefonica Moviles SA, a unit of Telefonica, T-Mobil, a unit of Deutsche Telekom AG, and others, also has agreed to test Stinger handsets in preparation for a possible commercial launch early next year.
Microsoft's recent successes notwithstanding, Nokia remains for now the undisputed king of wireless technology. Moreover, Nokia's sway with consumers and its market power means that few operators are likely to attempt to cut it off. Mauro Sentinelli, managing director of Telecom Italia Mobile, says that although he has some concerns about the Club Nokia portal competing with Telecom Italia's services, he makes it clear that his company will continue to work with the Finnish handset maker. "Nokia is one of the basic pillars of the industry," he says. "We can't do without Nokia." <<
- Eric - |
