Nokia and Palm Computing have joined forces to challenge Microsoft in the emerging Internet smartphone market.
But with products not expected from Palm and Nokia before 2001 in the US and even later in Europe, Microsoft, which revealed its smartphone strategy yesterday, is likely to get a significant head start.
Announcing the deal at Telecom 99, Nokia said it will develop a range of smartphones, with Palm Pilot-style touch screens, that will run Palm applications. Palm has over 22,000 developers and will have many more once Sun Microsystems ports the Java virtual machine to the Palm OS.
Symbian, the mobile OS venture co-founded by Nokia, will provide the underlying platform (the Epoc32 kernel). Symbian, whose backers also include Ericsson, Motorola, Psion and Matsushita, will continue to develop its Epoc32 mobile OS separately.
Nokia's smartphones will make their debut in the US in 2001, according to Anssi Vanjoki, senior vice president of Nokia mobile phones. After launch in the US, they will be developed for other markets, he said.
Eric Benhamou, chief executive of 3Com, said demand for Internet smartphones is likely to be stronger in the US. "Because the smartphone has a strong Internet component and Internet acceptance is so strong in the US, it is likely to enjoy a broader market from day one in the US," he told VNU Newswire.
Microsoft chief executive Bill Gates yesterday debuted a working prototype of a smartphone based on Windows CE. Sources say Microsoft has several mobile phone manufacturers committed to developing the device, codenamed Stinger, and partnership announcements are expected soon.
Jonathan Roberts, Windows CE general manager at Microsoft, said devices based on Stinger will enter trial next year. "It's fair to say that it could be in trials in calendar year 2000," he said. He added that they could be available earlier, but would not name a date until operator and vendor partnerships have been announced.
Nokia has been slow to take advantage of Symbian. Ericsson and Psion have already used Epoc32 in new products. Smartphones from Microsoft, Motorola and Samsung are all at an advanced stage, but Nokia's Vanjoki said his company won't lag behind.
"Our offering is going to be better than other products and that's when the competition really starts," said Vanjoki.
Alan Kessler, president at Palm Computing, said it wouldn't matter if the Nokia/Palm product arrives after Microsoft's and others, since being first into a market was no guarantee of success.
"Palm was not the first into the personal digital assistant market. There were several others earlier that failed miserably," he said.
Movement towards integrated mobile phones and PDAs has cast some doubts over the future of the standalone PDA, such as the Palm Pilot, or the Windows CE palm PCs.
3Com's Benhamou said new smartphone devices should accelerate sales of Palm Pilot-type devices as people invest more money in wireless devices of all types.
"My expectation is that there will be many people who prefer a very good voice phone and a very good data device, while others will prefer a smartphone with both voice and data," said Benhamou. The split between those opting for one device and those opting for two will be around 50:50, he said.
Separately, Palm is in negotiations with Symbian about cross-licensing their respective technologies, a move that would help launch UK company Psion into the US. Kessler confirmed the talks were under way, but said no deal was imminent.
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