• Illustration: The Orange SPV Smartphone

Microsoft has both enjoyed a victory and suffered a setback in its campaign to get Windows into the cell phone market. The first Windows-powered Smartphones are finally available in the United Kingdom through Orange SA, a France-based cellular carrier—albeit more than a year later than originally expected—and three other European countries are soon to follow. However, Sendo, a British cell-phone manufacturer, abruptly cancelled plans to release its Z-100 Smartphone after two years of development and only weeks from its planned ship date.

Smartphone is a software platform and an accompanying hardware reference standard for a new type of cell phone with capabilities similar to the Pocket PC Phone Edition, except that Smartphones are smaller and do not use a touch screen. Smartphones are designed for users who are more "voice-centric" and who will accept smaller screens and a user interface designed for one-hand keypad-driven input. (For more information on Smartphones, see "Wireless WAN Strategy Takes Shape" on page 14 of the Nov. 2002 Update.)

Orange SPV Launched

In late October, Orange launched its SPV phone (an acronym for "sound, pictures, and video"), saying that it would begin selling SPV phones in the United Kingdom in November, then in France, Denmark, and Switzerland "in the coming weeks." This makes Orange the first carrier to sell devices based on Microsoft’s Smartphone software, which includes Pocket Outlook; Pocket Internet Explorer, which supports both HTML and Wireless Access Protocol (WAP); Media Player; MSN Messenger; and the ActiveSynch data synchronization utility.

The SPV is manufactured by Taiwan-based High Tech Computer (HTC). (HTC is the manufacturer of Compaq iPAQ Pocket PCs and the xda Pocket PC Phone Edition sold by mmO2, T-Mobile, and others.) Smartphones will be less expensive than their relatives based on Microsoft’s Pocket PC Phone Edition (PPC-PE). The SPV initially costs UK£170 (roughly US$270) with a one-year contract, while British operator mmO2 is selling its xda PPC-PE device for UK£400 (about US$635) with a one-year contract.

In addition to providing the Smartphone features, the SPV

• Uses GSM Tri-band (900, 1800 and 1900) to enable voice services in both Europe and North America, and the GPRS data network (where available) for data communications
• Supports the Multimedia Message Service (MMS), a successor to Short Message Service (SMS) popular in Europe
• Can back up data and update its software over theair via the Orange network
• Can use the Orange Wirefree Server (based on Microsoft Mobile Information Server) to give corporate users wireless access to their e-mail and calendars via Pocket Outlook
• Has optional accessories, such as a clip-on digital camera, CNetX’s Pocket SlideShow program to view PowerPoint files, and a game called Rebound! from Ideaworks3D.

Last-Minute Pull-Out by Sendo

Only weeks after the Orange launch, Sendo announced that it was canceling its Z-100 Smartphone, which had been expected to ship imminently. Reportedly, Sendo was to begin shipping to Spain’s Telefonica and Italy’s Wind in November, and it had deals with T-Mobile in the United Kingdom, Cingular in the United States, SFR in France, and CSL in Hong Kong.

This move is especially surprising given that Sendo was the first Smartphone adopter and that Microsoft had invested more than US$10 million in Sendo last year for a 5% stake in the company.

Sendo said that it has decided to reengineer the Z-100 to use the Symbian operating system, Java, and the Nokia Series 60 user interface and application software that runs on top of it, pushing back the launch to the second half of 2003.

Both Sendo and Microsoft have been tight-lipped about the reasons for the switch, suggesting that legal action is likely. Now, apart from HTC, only Samsung (ranked third in worldwide market share) and Compal (another Taiwan-based mobile device OEM) have plans to launch Windows Smartphones, both by the middle of 2003. China’s Legend and TCL Mobile are also working on Smartphones. Sendo was a small player and it’s unclear whether its defection will ultimately affect the success of the Smartphone platform, but Sendo's defection couldn’t have come at a worse time—just when Microsoft is trying to build momentum for Smartphone. Positive early user experiences with the Orange SPV phone and rapid sales growth will be critical for Microsoft to regain traction with other carriers and ultimately to interest another large name-brand manufacturer, such as Motorola.

Resources

For general information on Windows Smartphones, see www.microsoft.com/mobile/smartphone.

For more information on the Orange SPV phone, see www.orange.co.uk/cgi-bin/business/phones.pl?phone=spv.