Microsoft smart phone to take on Blackberry

September 27, 2005 - 9:27AM

Microsoft teamed up Monday with mobile computer maker Palm and telecom giant Verizon on a new "smart phone" aiming to grab market share from the popular Blackberry device.

The world's biggest software group and the two partners will combine their marketing clout to take on established "smart phone" devices using the Blackberry platform developed by Canada's Research in Motion.

"Most people carrying a Blackberry today still have a mobile phone," Allen Bush of Palm said.

"That idea is just ludicrous to us; that in this day and age, you can't combine that elegantly."

A new "Windows Mobile" telephone that doubles as a hand-held computer with features including being synchronized with popular Microsoft Outlook messaging and scheduling software should be in US stores by early 2006, said Palm's chief executive officer Ed Collie.

Microsoft chairman Bill Gates called the telephone "more than a milestone" and said it is designed to make users feel as though "Hey, I've got Outlook in my pocket."

Bush predicted it wouldn't be a "winner take all" battle with Blackberry, but that it was more likely to become a market with many competing devices.

"I think the market is converging now," Douglas Smith of Microsoft said. "This a natural step that all things go mobile. This is where it has all been leading."

Users of the new Treo phone developed by Palm will have Microsoft software connected to Verizon's broadband EV-DO network capable of transferring huge amounts of data "lightning fast," said Verizon president Denny Strigl.

"I think we've hit a sweet spot," said Colligan.

Gates, Colligan and Strigl refused to discuss how much the mobile phone would cost or say anything about a radio feature engineered into the device.

Company marketing people said the "smartphone" would likely be priced at the high end of a market currently ranging from 199 to 599 dollars.

The Treo uses a Microsoft operating system to link users to multiple e-mail accounts and even view Powerpoint presentations.

The companies have been developing the telephone for years, using code names derived from 1960s rock bands and children's television program Sesame Street in a project jokingly referred to as "the worst-kept secret in the industry."

"Palm always did great work, so we lusted after some of those things they did well," Gates said. "Likewise, Verizon worked well with most Windows devices online. The strategy is to draw on our strengths."

Company officials said the announcement was timed to give "the 640,000 developers writing applications today" a chance to tailor products and uses for the Treo.

The companies are aiming to capture a major portion of approximately 126 million business people who use Microsoft software to coordinate work, email and scheduling in their work places, Gates said.

Verizon's high-speed network reaches half the nation's population, Strigl said, making it more accessible than the Wi-Fi system used by laptop computers.

"You don't have to go three blocks to find a (Wi-Fi) hot spot," Strigl said.

"I might add you don't have to drink a cup of coffee," he said, taking a jab at cafes that offer wireless computer connections to customers.

Colligan conceded that Palm and Microsoft have competed vigorously in the past.

"Sometimes partners compete and competitors partner," Colligan said. "And that is what is happening here."

Gates said the only problem he expected with the Treo was "keeping it in stock."

