• Illustration: Mitac Mio 8380

After a shaky start, it appears that Windows Smartphones are starting to increase data services revenue for European carrier Orange, and holdout Motorola has become the first major vendor to announce a Smartphone device, which AT&T plans to offer before year’s end. These three developments could greatly boost the adoption rate of Microsoft-based phones elsewhere. However, Samsung, which announced intentions to build a Smartphone over a year ago, has not yet delivered a phone.

Meanwhile, phone vendors and carriers nervous about committing to first-version software need wait no longer: Microsoft has updated the Smartphone platform. (See "Smartphone 2003 SDK and Platform Details Available".) In addition to addressing bugs and sluggish performance, the update adds some important new features and includes .NET Compact Framework support, which makes application development substantially easier.

The Smartphone platform—now formally known as "Windows Mobile Software for Smartphone"—is a software platform based on Windows CE and an accompanying hardware reference standard for a new type of cell phone that integrates personal digital assistant applications with cell phones and next-generation data networks. Smartphones have capabilities similar to the Pocket PC (PPC) 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.)

Motorola, Mitac Enter Market

Before Sept. 2003, Samsung was the only one of the top five cell phone manufacturers to publicly state intentions to build Windows-based Smartphones, and until recently, Taiwan-based HTC has been the only manufacturer to build Smartphones (mostly for European carrier Orange). However, this is about to change.

Motorola, second only to Nokia in cell phone market share, has contracted with Taiwanese manufacturer Chei Mei to build a Windows-powered GSM Smartphone—the MPx200—targeted at the North American and European markets.

Two carriers have also announced that they will be carrying the Motorola Smartphone. In October, European carrier Orange plans to offer the MPx200 in addition to the HTC-based "SPV" Smartphone it already offers.

In addition, Windows Smartphones are coming to North America for the first time: AT&T announced that it will begin offering the Motorola Smartphone in the United States before the end of 2003.

These developments should give Microsoft’s efforts in the "smart" phone market a major boost.

Motorola has also announced that it is selling its 19% stake in the Symbian consortium back to members Nokia and Psion. Even though Motorola plans to continue to license the Symbian OS and has just released a Symbian-based phone (the A920), this move indicates that Motorola is fairly agnostic about the underlying OS. Although this is a positive sign for Microsoft, Motorola is still hedging its bets: it has also announced development of a Linux-based Smartphone and says it will base its higher-end phones on the Java platform, which runs on a variety of OSs.

Unrelated to the Motorola deal, Mitac, a Taiwan-based computer maker expanding into the handheld-device market, also plans to start selling its new Smartphone-based Mio 8380 in Europe by the end of Sept. 2003. However, no carrier has announced plans to carry it yet, and Mitac is remaining mum. (See the illustration "Mitac Mio 8380".)

Orange Launch Bears Fruit

Orange, a French cell phone carrier, is the early pioneer in the Windows-based Smartphone market. Even though Orange took some early arrows in its back over slow performance, buggy phones, and irate developers, it appears that its efforts are beginning to produce results.

In a presentation given to financial analysts in July 2003, Pieter Knook, vice president of Microsoft's mobile devices business, noted that Orange has already been seeing 15% higher average revenue per user from its Smartphone customers than from users on comparable "smart" data-enabled devices, such as the Nokia 7650. Of this extra revenue, 93% was due to data service purchases, which add substantial browsing and e-mail synchronization traffic to the SMS text messaging popular in Europe. Knook went on to note that their research shows that 62% of these Smartphone customers feel additional loyalty to their carrier once they are using Smartphones connected to these data services.

If independent researchers or existing Smartphone carriers confirm this information, it may entice many more carriers to offer Windows-based Smartphones.

What Happened to Samsung?

Curiously quiet is number-three phone manufacturer Samsung, which announced support for Microsoft’s Smartphone platform over a year ago. Although Samsung is offering its PPC Phone Edition-based SCH-i700 device in the United States through Verizon, it has yet to ship its long-awaited SCH-i600 Smartphone, even though it received FCC approval more than a year ago. Neither Samsung nor Microsoft has commented (nor has Verizon, the first anticipated customer for the i600), but some pundits are speculating that Samsung may be changing its strategy and is refocusing its efforts on phones that use the Symbian platform. (Samsung is a partner in Symbian along with Ericsson, Nokia, Panasonic, Psion, Siemens, and Sony Ericsson.)

The Samsung relationship is important to Microsoft, which needs a major vendor to produce Smartphones for the CDMA networks popular in North America and parts of Asia.

Resources

For more information on Windows Smartphone, see www.microsoft.com/windowsmobile/products/smartphone.

For details on the Motorola MPx200, see www.phonescoop.com/phones/phone.php?id=315 and commerce.motorola.com/consumer/QWhtml/mpx200.html.

For more details on the Samsung SCH-i600, see www.phonescoop.com/phones/phone.php?id=186.