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MS Hints at Smartphone Strategy

Microsoft Corp. (Nasdaq: MSFT) says that AT&T Wireless Services Inc. (NYSE: AWE) looks likely to be the first U.S. carrier to launch handsets using its Smartphone 2002 operating system. The phones are expected to hit the market in the first half of next year.

Peter Knook, corporate vice president of network service providers and mobile devices for Microsoft, outlined the beginnings of the company's stateside smartphone push at UBS Warburg's telecom conference Tuesday in New York City.

After the presentation, Unstrung caught up with Knook to ask him about his division's plans, now that the first Microsoft smartphone has been launched in the U.K. (see Orange Uncovers Its SPV).

Knook -- a towering man, who might be one of the tallest human beings in Redmond -- wasn't particularly forthcoming about specific launch dates for the AT&T device. He also didn't say who will supply the carrier with devices, though it's fairly certain that the manufacturer will be either Samsung Electronics Co. Ltd. (Korea: SEC) or HTC Corp., as they are the only suppliers Microsoft currently has.

But he did drop some clues as to Microsoft's direction. Here are a couple other tidbits:

  • Verizon Wireless has committed to introducing Microsoft smartphones. This presumably means we will see CDMA2000-based phones next year.

  • On the podium, Knook had said that Microsoft will be working with its partners to introduce a wide variety of wireless devices for the consumer market. This will involve greater "segmentation" of device types, Knook said -- with vendors working on dedicated audio/visual, instant messaging, and gaming devices. Apparently this will involve "many, many different form factors and price points."

    "We will not be content if we are only successful in the enterprise space," Knook told the audience. [Ed. note: Don't count your chickens yet.]
At the moment, the idea of Microsoft and its partners creating a wide spectrum of wireless devices seems a trifle unlikely, considering how long it has taken for the first Microsoft smartphone to hit the market. However, if one compares Knook's vision with the prototypes of future devices put together by Nokia Corp. (NYSE: NOK) last week, there's clearly some similar thinking going on at these companies (see Pics'n'Prices: The Nokia Set).

Of course, Nokia is probably not the most popular name to drop on the Redmond campus right now [ed. note: is it ever?]. Last week, handset manufacturer Sendo Ltd. made a shock decision to drop Microsoft's smartphone OS in favor of Nokia's Series 60 offering (see Sendo Dumps MS for Nokia).

Naturally, the topic arose at the conference. The talkative Knook got a little bit more guarded.

"You should ask them why they didn't ship the product. We worked closely with them... [but] we didn't end up with any carrier orders," he said. "It’s a shame, Sendo was the first, but they're a small company with limited resources. We'll see lots of success for us with large companies like Samsung and HTC."

— Dan Jones, Senior Editor, Unstrung www.unstrung.com
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