Change is the only Constant

Microsoft has long ruled your desktop or laptop. Will it now

take over your mobile as well? While it would too far fetched to even think of

Microsoft taking over all the mobiles of the world and putting its mobile

operating system in them, there are fair chances that the software giant could

soon become the most dominant operating system for high-end mobile devices or

smartphones.

Symbian currently dominates the mobile OS market. Symbian's

overall global market share is projected to reach as high as 80% in 2006. More

than 200 carriers across the world ship Symbian OS in 54 smartphones. Mostly

proprietary OS dominates the rest of the market. Research In Motion (RIM) uses

its OS for the popular Blackberries. Sony Ericsson uses the OSE operating

system. Nokia series 30 and series 40 smartphones run on the proprietary Nokia

OS while higher-end Nokia smartphones do run Symbian.

However, all this could change and make Microsoft the dominant

mobile OS vendor, to begin with in the high-end mobile devices. This is because

even as Microsoft's Windows Mobile 5.0 is going places, there is a growing

perception that all the currently dominant Mobile OS a la Symbian, RIM and

PalmOS are losing out. In fact, the recent announcement by Palm and Microsoft

that Palm Treo would now come with Windows Mobile 5.0 is seen as signaling the

demise of PalmOS and a great boost for MS in its efforts to gain leadership in

Mobile OS. Earlier Motorola also let its preference known for Windows Mobile 5.0

when it announced that its new smartphone Q would sport it.

Palm Treo... soon available on Microsoft OS Is this the beginning of Microsoft's dominance of Mobile OS?

Microsoft operating systems are on with nearly 46% of all

devices shipped the second quarter of 2005, according to Gartner. A share that

is like go up considerably once Palm Treo starts sporting Windows Mobile 5.0.

Microsoft is also expected to gain from the growing mobile

workforce a significant portion of which also use access corporate e-mail and

scheduling programs that run on Microsoft's Exchange Server 2003. As such, in

order for any Mobile OS to appeal to corporate workers, it must incorporate

support for Exchange. This is what forced Symbian to announce a licensing

agreement with Microsoft. In March this year Symbian announced it would license

Microsoft's Exchange Server ActiveSync. The feature allows smart phones users to

access corporate e-mail and scheduling programs that run on Microsoft's Exchange

Server 2003. According to Radicati Group's estimates, Microsoft Exchange's

popularity is growing well-while 33% of corporations use Exchange e-mail,

Microsoft's leading market share should rise to 39% by 2009. As such, ActiveSync

is essential for Symbian for the simple reason that without it many corporate

users wouldn't find Symbian appealing. This Microsoft-Symbian agreement, many

analysts believe, could be at the cost of RIM's popular BlackBerry devices.

RIM does not offer the capability to connect to Exchange servers.

Market leader Symbian believes that its play is more in the

emerging volumes market for smartphones and sees Microsoft's move as a high-end

play and quite different from its own strategy. Symbian now appears to be

working on an aggressive strategy to dominate the emerging volumes market for

smartphones. It is now working on a slew of upgrades to its latest version 9.1

OS with mid-market users in mind. By 2005 end, Symbian would release v9.2 to

handset manufacturers. The volume market is important for Symbian because of its

flat pricing strategy- it charges a $5 fee per phone unit, regardless of make

or model.

However, even if Microsoft is focusing on the high-end of the

smartphone market, it's unlikely to be the case for long. Microsoft is

unlikely to confine its Mobile OS to just a few high-end smart phones. It will

definitely try to do what it did with PCs - whichever PC or Laptop you buy

they all come with Windows. It would like to do so with mobile phones as well.

Whether it succeeds in such endeavour or not is another question.

What's RIM doing? Would RIM's Blackberry be another Palm? As

of now there's not even a slightest chance of that. Besides competing

aggressively on hardware and leading the smartphone market, RIM is also trying

to licence its software other smartphone manufacturers through its Blackberry

Connect programme. Even though the programme has not been much of a success as

two-thirds of RIM's revenue comes from hardware. However, the Blackberry

Connect programme has sure made some gains with leading device makers. Recently

Nokia added support for BlackBerry services to its Nokia 9300 Communicator

handset. US operator Cingular Wireless is launching Nokia 9300 with BlackBerry

Connect in November. The device will feature the RIM BlackBerry Connect e-mail

solution.

Smartphone Market: Heat is On



Currently, the smartphone market represents just 10% of the global mobile

phone market and is expected to reach 15%, or more than 130 mn units shipped

annually, by 2008, according to IDC estimates. According to market research firm

Gartner RIM was the leading hardware provider in the PDA market in the second

quarter of 2005 with a 23 % share. The Canadian firm shipped 840,000 Blackberry

devices in that quarter, representing an increase of almost 65 % over the

510,000 units shipped in the second quarter of 2004. Palm came in at number two

with nearly 18 % market share. Hewlett-Packard Co. that uses Microsoft's OS, was

third with a device market share of 12.5 %.

The smartphone device market is expecting a lot of action in the

coming months as competition hits up for market leader RIM. Even though it's

trying hard to protect its turf with a slew of new launches, it is losing

customers to Palm and Nokia and subscriber growth for the company's BlackBerry

is slowing faster than some analysts had predicted. On other hand, there is

considerable interest in Motorola's Q. The vendor would be launching Q in

December. Q is a first significant attempt by Motorola to get into the turf

currently dominated bye Treo and BlackBerry. With Palm releasing a Windows

version of the Treo, the competition between it and the Q will be fierce.

For long Symbian and Palm OS have dominated the mobile OS market

while Blackberry and Palm have ruled the hardware market. The new wave of

competition and excitement in the market would surely change things for them. It

already has for the PalmOS. Microsoft's entry would surely act as a catalyst for

an accelerated growth in the market. A similar fate awaits the smartphone

hardware market with players like Nokia getting aggressive to challenge the

dominance of Blackberry and Palm.

Ravi Shekhar Pandey