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Microsoft Makes Moves in Mobile Market

2009.02.18

Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. and introduced updated phone software in a bid to catch up with Apple Inc.’s popularity with consumers.

LG, the third-biggest phone maker, will produce about 50 models that run Windows over the next five years, said Scott Rockfeld, a director in Microsoft’s mobile business. Seoul-based LG will use the software as its primary program for smart phones, devices that can send e-mail and browse the Web.

Microsoft is also adding software with touch controls and a store that offers phone applications -- features that are already available on the iPhone. While 46 percent more Windows phones were sold last year than iPhones, the iPhone is growing faster and has gained a cult following among consumers. Microsoft also faces a new threat from Android, a mobile operating system from Google Inc.

“First they dismissed Apple, then they ignored them --they squandered a good year and a half letting them build up mindshare and a developer network,” said Michael Gartenberg, an analyst at Interpret LLC, a market research firm in Los Angeles. “It’s important for them to get the word out that Windows Mobile is viable and is evolving.”

Microsoft Chief Executive Officer Steve Ballmer unveiled the software -- Windows Mobile 6.5 -- today at the GSMA Mobile World Congress in Barcelona, Spain. Phones with the program will be available later in the year, said Ballmer, who gave a press conference today and will deliver a speech tomorrow. The company will also offer a service that synchronizes address books, calendars, photos and text messages with users’ computers.

MobileMe

Apple, which released the iPhone in June 2007, has a similar program called MobileMe, which costs $99 a year. Microsoft’s service is free and has more features, said Andy Lees, senior vice president of the company’s mobile communications business.

“We’re innovating,” he said. “Saying we aren’t the company that’s innovating is inaccurate. I don’t see them providing the same things we have.”

Microsoft fell 17 cents to $19.09 on Feb. 13 in Nasdaq Stock Market trading. The shares have declined 1.8 percent this year.

Microsoft, which has previously focused on Windows Mobile, has realized that it needs to put more effort into making additional software and services, said Lees, who took over the group last year. That would make it easier to do things like share photos, he said.

Android

Google’s Android program is too similar to Microsoft’s old plan, because it focuses solely on the operating system, Lees said.

Microsoft, which is working on new ways to connect phones to computers and other Microsoft products, will demonstrate an instant-messaging conversation between a phone, a computer and an Xbox video-game console, Lees said. In the future, the company plans to connect phones to its Windows Live Internet services, Lees said.

Future versions of the phone software will include Microsoft’s Zune music service. Microsoft said last week that it moved the Zune hardware team into the mobile unit. Still, Microsoft isn’t working on a Zune phone, Lees said.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg

By Dina Bass

Feb. 16 (Bloomberg) -- Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. and introduced updated phone software in a bid to catch up with Apple Inc.’s popularity with consumers.

LG, the third-biggest phone maker, will produce about 50 models that run Windows over the next five years, said Scott Rockfeld, a director in Microsoft’s mobile business. Seoul-based LG will use the software as its primary program for smart phones, devices that can send e-mail and browse the Web.

Microsoft is also adding software with touch controls and a store that offers phone applications -- features that are already available on the iPhone. While 46 percent more Windows phones were sold last year than iPhones, the iPhone is growing faster and has gained a cult following among consumers. Microsoft also faces a new threat from Android, a mobile operating system from Google Inc.

“First they dismissed Apple, then they ignored them --they squandered a good year and a half letting them build up mindshare and a developer network,” said Michael Gartenberg, an analyst at Interpret LLC, a market research firm in Los Angeles. “It’s important for them to get the word out that Windows Mobile is viable and is evolving.”

Microsoft Chief Executive Officer Steve Ballmer unveiled the software -- Windows Mobile 6.5 -- today at the GSMA Mobile World Congress in Barcelona, Spain. Phones with the program will be available later in the year, said Ballmer, who gave a press conference today and will deliver a speech tomorrow. The company will also offer a service that synchronizes address books, calendars, photos and text messages with users’ computers.

MobileMe

Apple, which released the iPhone in June 2007, has a similar program called MobileMe, which costs $99 a year. Microsoft’s service is free and has more features, said Andy Lees, senior vice president of the company’s mobile communications business.

“We’re innovating,” he said. “Saying we aren’t the company that’s innovating is inaccurate. I don’t see them providing the same things we have.”

Microsoft fell 17 cents to $19.09 on Feb. 13 in Nasdaq Stock Market trading. The shares have declined 1.8 percent this year.

Microsoft, which has previously focused on Windows Mobile, has realized that it needs to put more effort into making additional software and services, said Lees, who took over the group last year. That would make it easier to do things like share photos, he said.

Android

Google’s Android program is too similar to Microsoft’s old plan, because it focuses solely on the operating system, Lees said.

Microsoft, which is working on new ways to connect phones to computers and other Microsoft products, will demonstrate an instant-messaging conversation between a phone, a computer and an Xbox video-game console, Lees said. In the future, the company plans to connect phones to its Windows Live Internet services, Lees said.

Future versions of the phone software will include Microsoft’s Zune music service. Microsoft said last week that it moved the Zune hardware team into the mobile unit. Still, Microsoft isn’t working on a Zune phone, Lees said.

Forrás: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZn3LEqDPxV8#