UPDATE: Working With Verizon Could Help Microsoft Mobile
April 28 2009 - 5:38PM
Dow Jones News
Verizon Wireless could give Microsoft Corp. (MSFT) and the
software giant's Windows Mobile platform a badly needed shot in the
arm.
According to The Wall Street Journal, the two are in talks to
launch a smartphone codenamed "Pink." Verizon Wireless gets yet
another potential signature phone to stem defections to the iPhone.
More importantly, Microsoft gains a high-profile ally in pushing
its operating system, which many deem dependable but
unexciting.
Microsoft, in a prepared statement, said the strategy for its
mobile operating system, hadn't changed and that it remained
interested in working with a variety of operators and handset
makers.
But a person familiar with the matter said Microsoft would
likely explore prototypes based on technology it acquired when it
bought Danger Inc., a mobile software and services company, in
2008.
Danger designs the Sidekick, a smartphone device sold in the
U.S. by T-Mobile Inc. a unit of Deutsche Telekom (DT), which is
similar to Research in Motion Ltd.'s (RIMM) BlackBerry. The person
said Danger's work on the "social" aspects of smartphones would
likely play an important role in any prototypes Microsoft develops.
The "Pink" phone could also incorporate aspects of Zune,
Microsoft's music device.
Windows Mobile is feeling the heat. Many of its major partners
are shifting their focus towards rival Google Inc.'s (GOOG) free
Android platform, while Apple Inc.'s (AAPL) iPhone and the
BlackBerry continue to take market share.
Verizon Wireless - which has a base of 86.2 million wireless
customers, thanks to its acquisition of Alltel - brings the heft
and credibility needed to restore Microsoft's profile in the
industry.
To be sure, Microsoft hasn't been asleep at the wheel. It sold
20 million Windows Mobile devices last year.
But more recently, things have turned away from Microsoft.
Struggling Motorola Inc. (MOT) had all but shut off any resources
to developing Windows Mobile phones, instead focusing on Android.
Samsung Electronics Co. (005930.SE) unveiled its first Android
phone. Palm Inc.'s (PALM) Pre and Web OS platform have siphoned off
any buzz that hadn't gone to the iPhone.
Having a signature Verizon Wireless cellphone using Microsoft
software could provide upside if it taps into the carrier's large
base. If Microsoft puts more work into the operating system, and
the signature device sells well, it could be used as a standard
bearer to call back disenfranchised partners.
Microsoft is already showing some progress. At the last wireless
industry conference earlier this month, unit head Robbie Bach
showed off a new version of its mobile browser, which looked
impressive.
Still, challenges remain. The iPhone remains a dominant force.
Verizon Wireless has positioned several devices, most recently the
BlackBerry Storm, as iPhone killers, but none of the devices has
been as successful. There's no guarantee a souped-up
Microsoft-powered device will dent that momentum.
Spokesmen for Apple, Verizon Wireless and AT&T declined to
comment.
-By Roger Cheng and Jessica Hodgson, Dow Jones Newswires;
201-938-2020; roger.cheng@dowjones.com