Microsoft's mobile quandary

It is pretty clear to everyone now that the world of mobile computing will eventually eat the PC world and spit out the pips. But what nobody is really sure of is when or exactly how it will happen.

Mobile will dominate for obvious reasons: it is all about wires - or the lack of them. Not having to physically plug into a communications network is good. Not having to plug into a power source is also good. And this, of course, is almost as good for PC laptops as it is for personal digital assistants (PDAs) and mobile phones.

Whatever happens, laptops will carry on. It is quite clear that screen size is important for many applications, and for some - like DTP, CAD and video - the bigger the better. But the bigger the screen, the less mobile the device. Screen size impedes mobility and demands more battery power, which also impedes mobility because of weight.

Of course, there is no reason not to have a wireless device that plugs in for power. This is the ultimate destiny of the so-called Power PC. But will the laptops and workstations of the future be running Windows? Understandably, the answer is of keen interest to Microsoft.

Microsoft's problem is that, in all probability, some of them will be running Windows unless Microsoft wins the battle lower down the market on the PDAs. SO far, things are looking good for Microsoft, with the success of its Pocket PC taking market share from the Palm Pilot. The latter might have put up a stronger fight for the turf if 3Com had not fallen out with the original Palm team, most of whom now run Handspring.

The pocket PC is not yet dominant and may not even achieve dominance, but I doubt if this actually matters. My attention has been caught by something else. Let me first explain.

Microsoft, Intel, Dell (and perhaps Compaq) are the true champions of the PC era, having beaten off competition from everywhere - including what we could call the incumbent vendors, such as IBM, Digital, Hewlett Packard (HP) and others.

The incumbents ruled the IT industry prior to the advent of the PC. Although Digital was the only one that died outright, it was only IBM and HP that managed to get much of a life in the PC-oriented world. IBM did well at first, almost taking ownership of the PC (it is still tempting at times to call it the IBM PC); but not so well later. HP, meanwhile, built a remarkable printer business and a healthy PC business. But neither of them could match the remarkable success of the PC giants.

We should expect the mobile revolution to be the same, and for a similar kind of thing to occur for similar reasons.

There will be new champions, and the incumbents - Microsoft, Intel, Dell and HP/Compaq - should have a difficult time, not to the extent of disappearing (although that is far from impossible) but at least to the extent of getting it wrong, in the same way that IBM got it wrong.

The 'straw in the wind' that has caught my attention is the appearance of the mobile phone/camera, the mobile phone/music player and the mobile phone/web surfer. If you go to the Carphone Warehouse website and look to see what it is pushing as the 'latest products', you will see one device that is a Pocket PC. But you will also see the Pogo (browser plus MP3 player plus phone), the Nokia 7650 digital camera plus phone and the Ericsson digital camera attachment for an Ericsson phone (the CommuniCam).

The initial IT killer application of mobile phones was instant messaging. The second killer application will be multimedia messaging. Users will be able to record sound and send pictures and video over the network. Wait for the mobile phone camcorder. It is coming. Millions of people will do it - possibly even billions.

Who has discovered this? Well, the new giants Nokia and Ericsson (with Ericsson now in league with the old consumer giant Sony).

So how come the emergence of this market was not clearly obvious to Microsoft, Compaq and the host of also-rans who are hoping to get a piece of the mobile market?

This is not about PDAs, it is about consumer devices. PDAs are primarily business devices. The old PC guard has put its troops on the wrong turf. It is about multimedia, not about recording addresses and playing with spreadsheets.

In the end, like all other markets, this one will be decided by the numbers. Nokia and Ericsson are the companies with the large numbers of users. They determine where the market goes. If Microsoft wants a piece of this market then it will have to make deals with them.

But Nokia and Ericsson probably think of Microsoft in the same way that Microsoft used to think of IBM: as more of a threat than a partner. They are unlikely to do Microsoft any favours. They are certainly not going to want to pay a big licence fee for an operating system.