Can Magneto repel Microsoft's mobile rivals?
Published: 09 May 2005 19:00 BST
Microsoft's approach to the mobile device market is a lot like the "Survivor" ethos.
On the popular reality TV show, contestants are advised to "outwit," "outplay" and "outlast" their opponents. Microsoft is aiming to do all three, though it may well succeed if it only manages the last of those tasks.
The software maker is expected next week to introduce Windows Mobile 5, the next version of its operating system for mobile phones and handhelds. The OS, code-named Magneto, is the latest in a string of software releases that highlight Microsoft's attempts to take on rivals including PalmSource and Nokia.
"The business is actually doing fine and has had remarkable growth, but we're still way way the underdog there," Windows chief Jim Allchin said.
In the past, Microsoft has created different versions of its mobile software, each designed to run on a particular class of device. There were smartphones and Pocket PCs and even Pocket PC phones, but within a given category, all of the devices bore a striking resemblance.
A key goal this time around was allowing for more design variety. In an April interview, Allchin said the result would be an array of new products, some of which he called "amazing".
When it comes to the mobile-device market, analysts credit Microsoft with showing staying power. Its first devices were significantly less popular than those from Palm. The operating system had its first hit with Compaq's iPaq and eventually garnered a significant chunk of the handheld market. Meanwhile, a longstanding effort to break into phones is starting to bear fruit after some noteworthy stumbles.
"Microsoft has always been committed [to] improving the Windows Mobile experience," IDC analyst Kevin Burden said. "With each new version, they find new things they want to make better."
The company has seen its growth pick up, as well, although the mobile unit is still a tiny part of Microsoft's overall business and the division continues to lose money. Last quarter, Microsoft saw mobile-unit revenue zoom up more than 30 percent from a year earlier, to $80m (£42m). In particular, Microsoft saw its licenses of Windows Mobile for network-connected devices more than double from last year.
While not commenting specifically on the upcoming OS release, Burden noted that Microsoft has shown its commitment to building an operating system that can be used for all manner of mobile devices. He noted that Microsoft's move comes as some companies, such as Sony, have pulled out of the slow-growing handheld market.
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