Microsoft faces fight on mixing software with gadgets

After dominating the desktop, burrowing into the Internet and bursting into the video game market, Microsoft Corp. is making progress at getting firmly into the palm of your hand.

Already a force in software for personal digital assistants, Microsoft is ramping up efforts to provide the operating systems for those devices' close relative: the next generation of "smart" cell phones that can handle e-mail, digital photos and other data.

Microsoft splashed into the smart-phone scene in Europe last year with a device sold by the British wireless carrier Orange.

And last week it made a big North American advance as Hitachi and Samsung each said they would soon produce Microsoft-powered handhelds with phones that employ the most common U.S. network standard.

Microsoft claims it can make mobile devices easier to use by assuring seamless connections with its desktop programs. Its people talk as if they owe it to a Windows-addicted world.

"We feel a certain sense of responsibility," said Microsoft's mobile-product manager, Ed Suwanjindar. "When you ask people what they want to do with these devices, very often they're similar to the things they're already doing on their Windows desktop."

Ever more ingenious

Much is at stake. More than 400 million cell phones are sold each year worldwide, but increasingly the division between those devices and handheld computers is being blurred.

Instead we are getting all-purpose communication devices that not only carry a conversation but also host e-mail, messaging, Web-surfing, picture, sound and entertainment functions.

Software for these devices has to be ever more ingenious at making the most out of their relatively limited battery and processing abilities, and allowing for over-the-air upgrades and repairs.

At the top of Microsoft's list of competitors is Symbian Ltd., which was launched in 1998 specifically to design phone operating systems and powers such top-of-the-line models in Europe as Nokia's Communicator series.

Two other competitors also loom: PalmSource Inc., the Palm Inc. operating-system spinoff, and Research in Motion Ltd., maker of the Blackberry wireless messaging gadgets.

Microsoft says it knows software better than anyone. Its rivals say operating systems that mesh telephony and data well are another matter entirely.

"You don't want to replicate the experience of the desktop on your phone," said Peter Bancroft, spokesman for London-based Symbian, a joint venture of Ericsson, Nokia, Matsushita, Motorola, Psion and Siemens.

"This is not anything against PowerPoint or Microsoft at all, but I don't suppose anyone wants to view a PowerPoint on their phone," Bancroft added.

A traveling executive might want to store a PowerPoint presentation on a phone and display the file at a meeting, but that can be done on Symbian or Palm-powered devices, too.

Individual device manufacturers have their own specialized operating software, too. NEC is working on a phone programmed with the Linux open-source system.

Everything looks like a nail

But to Jim Balsillie, Research in Motion's chairman, mobile devices don't need Microsoft or any other specific brand of software. They merely need to have specific applications like e-mail fine-tuned perfectly.

"The operating system is irrelevant," Balsillie said. "If you're a hammer, then everything in the world looks like a nail."

Still, rivals have plenty of reason to fear Microsoft.

The Redmond, Wash.-based behemoth can influence a lot of corporate technology buyers and it has yet to really flex its muscle in smart phones the way it has in personal digital assistants.

Microsoft and chip giant Intel Corp. also plan to jointly release basic blueprints for communications devices in hopes device manufacturers will thereby standardize the handheld world like the Intel/Microsoft-dominated PC market.

But Microsoft's wireless initiatives have hit rough spots.

Several software releases have come late. A British manufacturer, Sendo, scrapped plans to develop a Microsoft-powered phone, opting to license Nokia software instead.

Microsoft's Suwanjindar admits the wireless wars won't be easy.

"I would acknowledge that the wireless business, specifically the smart-phone project, is one of the most ambitious projects this company has ever entered into," he said. "But we have a history of doing hard and risky things and having the patience to see them through."