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BT & MICROSOFT SMART PHONE LINK
Copyright 2001 www.telegraph.co.uk

[ October 5th 2001 ]

The race to become the dominant player in mobile smart phones took another twist last night as MmO2 , the soon-to-be demerged mobile arm of BT, said it will release a phone in conjunction with Microsoft, the US software giant.

The new phone, which will allow mobile users to perform a variety of tasks from word processing to playing the popular computer game Tomb Raider, will use a cut-down version of Microsoft Windows. It will compete directly with products using similar software from rivals Palm and Symbian, the joint venture between Psion, Nokia, Motorola, Ericsson and Matsushita.

The market for smart phones, which are effectively combined mobile phones and electronic organisers, has begun to hot up, as mobile operators look to shift revenues towards data services and away from voice calls as faster networks such as GPRS (general packet radio service) and eventually 3G (third generation) become available. So far, however, very few consumers have bought the limited range of smart phones to hit Britain's high streets.

Dave McGlade, managing director of BT Cellnet and executive director of MmO2 , said: "Previous products have failed as there were no compelling things to do on the devices." He added that the company had no plans to launch similar products with Microsoft's rivals in the near future.

Juha Christensen, vice president of Microsoft's mobility group who sensationally defected from arch-rival Symbian last year, said: "This is a clear indication that Microsoft is a solid business partner in the mobile area."

In reality, Microsoft's decision to deal with mobile phone operators, such as MmO2 , rather than handset manufacturers, such as Nokia, owes more to Symbian freezing out its US rival in that market. Microsoft, however, has had more success in partnership with electronic organiser manufacturers, where Compaq's Ipaq is the sector's current success story.

The new MmO2 device, which will launch in the group's five markets in the first half of next year, will cost up to 500 plus the cost of signing up to MmO2 's GPRS tariff. It is slightly larger than a standard mobile phone and weighs 186 grams.

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Lara Croft and Tomb Raider are trademarks of Square Enix Ltd.
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