re: Nokia to Microsoft: Give peace a chance.
>> Wireless Giants Say They Are Ready To Play Nice
By Kenneth Li
TheStreet.com
06/12/2002
Nokia to Microsoft: Give peace a chance.
In what's shaping up to be a sign of coexistence between the two heated combatants in the global mobile-handset arena, both have agreed to get in bed on a new gigantic umbrella organizing body, dubbed the Open Mobile Alliance on wireless data.
The new organization, made up of a blue ribbon panel of carriers, technology providers and handset manufacturers including IBM, Sun Microsystems, NTT DoCoMo, Symbian, Texas Instruments and Intel, is designed to help bring a sort of global-tech lingua franca to the Tower of Babel in the wireless data business.
The goal is to create a framework through which companies will be able to create technology, devices and services that are interoperable worldwide, something that has remained a challenge for some time.
If successful, two cell-phone users on opposite sides of the globe would be able to send data to each other regardless of carrier or region.
It's an industry first, bringing Nokia and Mister Softee under one roof, but it's one fraught with uncertainties. Since last year, the two have been circling each other in the next-generation handset ring, proselytizing for the virtues of their competing handset-operating systems.
The major handset manufacturers, including Nokia, Motorola, Sony Ericsson and Siemens , are intent on protecting what they view as their control of how consumers communicate.
Microsoft, the wireless arena gate-crasher, also has designs on the handset market, seeing it as an extension of its personal computing hegemony.
The roar reached a crescendo last November at the annual Comdex meeting, when Nokia Chief Executive Jorma Ollila used the keynote as a pulpit for advancing the Nokia world view by announcing the formation of an organizing body similar to the one announced Tuesday.
In his speech, Ollila also mentioned plans to license Nokia's version of the Symbian operating system, called the Series 60. But perhaps more important was the announcement of an organizing body called the Open Mobile Architecture initiative, also composed of a panel of handset and technology competitors, excepting the Redmond, Wash., software giant. The move was widely regarded as the first public missive against Microsoft, say observers.
The decision Tuesday to not only bring Microsoft to the table, but combine a smorgasbord of parallel initiatives, such as the Wireless Village Intiative devoted to instant messaging, the MMS Interoperability Group and SyncML, stems from a desire to squeeze profit to offset the billions in capital expenditures dumped on third-generation networks and the licenses spent on bidding for the spectrum.
But mostly it's out of desperation. Since the beginning of the year, Nokia has seen its shares halved as wireless stocks have lost favor among investors and on Wall Street. Once a growth engine helping to fuel the tech stock market boom, wireless stocks have taken a massive hit, as companies continue to reduce expectations quarter by quarter. In the past five quarters, Nokia has had to reduce forecasts four times. Global handset-sales volume, once projected to be more than 600 million by the end of this year, has been reduced to around 385 million, nearly on par with last year's volume.
Analysts were cautious about the significance of the latest consortium, perhaps numbed by a litany of promises by the industry in the past.
"To me this is kind of not as big a news event as it may have seemed at first glance," says Bryan Prohm, wireless analyst at The Gartner Group.
While "any efforts to create a more unified approach in standardization is great, [there's been] more divergence than convergence" in the work so far. Privately, other Wall Street observers joked that the so-called "wireless Web" is little more than an oxymoron.
For its part, Microsoft has found some reason to put aside its differences, if only for a moment.
"Now we're taking a seat at the head of the table in working to drive [the] wireless standard in a significant way that could impact mobile users," said Ed Suwanjindar, product manager of the Mobility Group at Microsoft. "We are cautiously optimistic about the new endeavor, but it's a significant step." <<
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