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Issue #2003 - 05 (February 2003)
(Updated Feb. 13, 2003)


Rogers AT&T Canada - A Testing Ground for Microsoft Pocket PC Phone Edition

Microsoft is taking a double-barreled approach to the wireless market that will recognize the split between voice and data-centric business users.

The software company formed an alliance with Toronto-based Rogers AT&T Wireless that will see the carrier offer devices based on Microsoft's Pocket PC Phone Edition and SmartPhone operating systems. The phones will operate on Rogers AT&T Wireless's GSM/GPRS network. The deal comes a year after Microsoft formed a similar alliance with AT&T Wireless in the United States.

The Pocket PC Phone Edition, which is expected to ship in a matter of weeks, allows users to synchronize their calendar, e-mail and contacts on their Rogers AT&T Wireless device. As such, it is primarily aimed at data-oriented users. The SmartPhone, which executives said would ship late in the second quarter, is designed with the voice-oriented user in mind while offering MSN and short message service capabilities. 

Microsoft Canada president Frank Clegg said the company's foray into the emerging wireless market represents a shift in an industry that has primarily concentrated on the hardware side of the business.

"We think there's an opportunity for software to play a more critical role in developing a user base for these devices," he said. "We want to offer them everything from standard Web browsing and Office applications to full-functioned Outlook capabilities."

Rogers AT&T Wireless CEO Nadir Mohamed said the Microsoft pact will help it meet all three of the objectives it set 18 months ago to grow its business, including a focus on business and youth customers, delivering data-oriented services and creating strong retention strategies.

"One thing we've learned is that if you can extend what people are used to into a new type of environment, you can really influence and attract new customers," he said. "We know that there are a lot of Office users out there."

Though Microsoft has offered a Pocket PC operating system that powers many handheld computers, the Phone Edition and SmartPhone integrates wireless components directly into the operating system. This can significantly ease application development, executives said.

Clegg said Microsoft is often asked why it is offering two devices. "We know that there's a voice camp and a data camp," he said, adding that it can grow the market by tailoring software services to meet individual needs. "If anything, you'll see us get more specialized."

Microsoft is a relative newcomer to the wireless phone space. It competes primarily with the Symbian operating system, which is used by Nokia, Motorola, Ericsson, Samsung and Siemens. Jeremy Depow, a wireless analyst with the Yankee Group in Ottawa, said Microsoft has yet to create much demand for wireless phones powered by its OSes in the enterprise.

"It's relatively small at this point," he said. "It's aimed specifically at your upper echelons of a large corporation or business."

The Rogers AT&T Wireless Pocket PC Phone Edition device will be manufactured by Siemens. The SmartPhone is to be made by a Taiwanese firm, which executives would not name.

MobileInfo Comments and Advisory: Microsoft is working tirelessly to make an impact in the Pocket PC and smart phone markets where it has suffered some setbacks at the device end. It needs alliances with carriers too to carry these devices. This is where Rogers AT&T alliance will help. We expect Microsoft's Pocket PC Phone edition (data-centric with some voice) to succeed before the smart phone (phone with some SMS-like capabilities), from Microsoft's perspective. For the overall market, the reverse may be true.

Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.

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