Wintel is looking for a sequel.
At the Intel Developer Forum this week in San Francisco, partners and analysts are getting an eyeful of
key markets: computing, networking and wireless. If that last item comes as news to you, it's time to get in touch with the latest sector battleground.
This version has all the challenges of the PC market of old, with
role of monolithic incumbent, countered by that timeless
-Intel upstart magic. There are upward of 400 million mobile phones sold yearly, and as they become smarter and more data intensive, Microsoft and Intel want to be on their screens.
The only problem is the companies that currently hold mobile-phone supremacy have seen the end results of the Wintel domination plot line, and they'll do anything to avoid it.
It is setting up a struggle with familiar strains over the converging personal digital assistant-mobile phone market. Wintel will attempt to crack the market through the cheaper models of second-tier phone manufacturers.
The opposing strategy from Nokia will be to push an open-source operating system that will become ubiquitous enough to keep Wintel at bay.
Investors will be itching early this week to hear a little more from Intel, to see how this brand-new plan will catch on. Last week, Microsoft announced its long-awaited "Stinger" software platform for the category of phone, email and messaging devices known as smart phones. The software giant announced two versions of the software, PocketPC 2002 Phone Edition for the PDA, which also has calling and messaging functionality, and Smartphone 2002, for a phone that has some added Internet capabilities. Stinger is a few months ahead of an expected refresher version of the Palm OS that will bring wireless use to the fore.
is likely to be the first PocketPC partner to have a device with Microsoft's new mobile capabilities, expected in the second quarter, followed by Compaq's
popular iPaq family in the third quarter, says Gartner Dataquest analyst Todd Kort.
Then again, U.S. wireless networks are currently being upgraded for packet-switched data, a process that won't be finished on a significant nationwide scale by midyear. The market for converged PDA-cell phones isn't expected to heat up until 2003, so Microsoft and Intel aren't late, yet.
"Some of the handheld companies need to get out ahead of everybody else, so they can learn about the business, learn from their mistakes. They're anxious to get started," Kort says. "Compaq and H-P don't feel quite that level of pressure. They feel the market will grow pretty substantially. There's no need to put a GSM device out there and see it die in the fall."
For their part, mobile-phone makers such as Nokia,
joint venture have spent years waiting for this day. They've carefully cultivated an operating system from mutually owned Symbian as their OS of choice, through investment and a collaborative effort. Symbian is at the center of the Open Mobile Architecture Initiative, backed by manufacturers and wireless carriers alike to avoid a world with proprietary OS'es on phones.
Sound familiar? The initiative follows a familiar plot sequence, even relying on a version of Java tailored for the mobile arena called J2METK. Symbian has been groomed to eliminate a Wintel-like scenario in the phone world, and it has a head start.
The Nokia Communicator PDA-phone combination device runs the Symbian OS and is currently gaining PDA market share in Europe. The Communicator is due out this spring in the U.S. Gartner's Kort estimates that the Symbian OS powers 70% of the world's phones. Not all of them are smart phones today, but the domination outlines the challenges in front of Team Microsoft.
Further complicating the scene, the
operating system is also in the fight. Palm has bragging rights over the PDA side of the mobile-phone convergence field because the Palm OS-based Treo phone/PDA made by
arrived first on the U.S. market.
The Palm OS is more than an afterthought in the phone market, given its ability to dominate the worldwide and U.S. PDA market, despite several years of Microsoft's attempts to translate Windows to the handheld platform. Palm's slimmer, more elegant offering has dedicated fans, both in the consumer audience and among software developers. The company's ability to prove its competitiveness with an upgrade to its platform in 2002 will be key to its phone future.
Microsoft's announcement included its selection of Intel as the key supplier of StrongARM phone-specific chips, a technology also fronted by communications-chip specialist
In a similar duel at the end of 2002, TI won out in a bid to be the top chip chosen by Palm for its upcoming version of the Palm OS. As Intel is also a second-tier player for Palm OS devices, TI is in the mix for Smartphone 2002 manufacturers.
Attack of the Killer Clones
As they've looked forward on the OS side, mobile-phone makers already have identified a future crack in their business models, as well. Handsets are moving toward commodity pricing, and it wouldn't be a shock to see the mobile-phone market grow to be reminiscent of the PC world, with each manufacturer battling to maintain margins and squeak out profits in an environment rife with bargain pricing.
Microsoft and Intel may have mastered the no-name, clone-type machine game, but phone makers are dashing to cover their interests.
Phone-chip and handset-patent owners such as Motorola, Texas Instruments and Nokia have realized that a renegade crop of cheap phone makers coming out of Asia soon could make life very difficult. In response, these technology leaders have rolled out programs attempting to make money from licensing everything from chips to the entire radio portion of the mobile phone to the original design manufacturers.
Low-end phone makers are a natural beachhead for Microsoft and Intel to begin an invasion, but the phone makers are serious about squashing the duo's success. It is doubtful, however, that they would be able to convince low-end phone makers to avoid Wintel. As competitors such as Sony Ericsson,
and others struggle for profits outside the higher market-share numbers enjoyed by Nokia and Motorola in the phone sector, it's increasingly likely that one of them could use Microsoft as a differentiator in a weak moment.
Although users are expected to put smart phones through serious data paces, it is less clear that a scenario will develop that includes a Windows-like OS connection with an entire ecosystem of Windows-geared applications that are as important to consumers as the operating system itself.
It seems more likely that with more than a dozen mobile-phone makers battling for revenue, several operating systems will be employed on different models. For a company such as Palm, it wouldn't take a big share of the yearly mobile-phone shipments to make a big business increase. Meanwhile, it may well be impossible for Symbian's backers to push a seemingly neutral platform forward to the exclusion of its OS competitors.
As for Microsoft, it's taken the company many years more than it probably expected to translate the Windows platform on to PDA devices, a concept that seemed a lock for the software leader. Phones are a much larger market: around 380 million phone units shipped in 2001, compared with Kort's estimate of 13 million PDA units. But the crowd in this market is on to the Wintel formula.