Smartphone system battle to cool as rivals go their own ways

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The Independent Online

The battle between Symbian and Microsoft looks set to cool in the short term as the long-standing rivals in the high-end mobile phone operating system market set their sights on different segments of the smartphone sector.

3GSM, the world's largest mobile phone conference, is a busy time for both companies with a slew of flashy handsets using the respective systems launched during the show. In addition, Microsoft has launched the latest version of Windows Mobile, the sixth incarnation of the software giant's mobile phone operating system that has focused on improving the experience of using e-mail on a mobile phone.

Scott Horn, general manager of Microsoft's mobile division, said: "Windows Mobile 6 is a critical release in where we want to go with the business."

He said that after Microsoft's mobile phone division sold 6 million licences last year and achieved its first profit, he expects significant progress this year. He noted that it sold 3 million licences in its last quarter alone.

Microsoft has invested heavily in its platform for so-called smartphones as it looks to spread its wings outside its core computer system operations.

Meanwhile, Symbian announced that it had sold 51.7 million units in 2006, including a disappointing 14.6 million licences in the final quarter as a result of a slowdown in smartphone sales at Nokia. The Finnish company, Symbian's largest shareholder, accounts for around 75 per cent of the operating system's sales.

The launch of the new Motorola Z8 handset on the Symbian platform - described by Symbian's chief executive Nigel Clifford as "absolutely delicious" - helped improve analyst confidence after the fourth-quarter blip. Mr Clifford said the world's five largest mobile phone manufacturers launched handsets on the Symbian OS 9 platform during 3GSM and that the platform's market share has remained at 73 per cent for the past 18 months.

With Microsoft flexing its muscles in the market for high-end business devices and Symbian increasingly used for multimedia devices, the long-term rivalry may be set for a detente.

Richard Windsor, at Nomura Securities, said that with the platform developers going in different directions, battles between Microsoft and the Blackberry manufacturer RIM, and Symbian and Linux-based systems could become more interesting.

"We see the real focus of Microsoft's strategy as centred on the corporate space. We believe that this moves Microsoft away from competing directly with Symbian and towards competing with RIM. Although Microsoft's e-mail looks superior, RIM's security, reliability, back-end and sleek devices will take some beating," Mr Windsor said.

But Mr Clifford said that with a number of new Nokia devices aimed at business users, Symbian was still heavily exposed to the corporate market.