Bill Gates's Other Bugaboo

In the mobile Net market, tiny Symbian has a head start

With the U.S. Justice Dept. closing in and the stock market tetchy about the high-tech sector, Microsoft Corp. Chairman William H. Gates III has lots more to fret about than a London startup. But of all his worries, Gates puts eight-month-old Symbian, a maker of mobile-phone software, right up near the top. Indeed, in an internal memo last year, he called the outfit one of his company's greatest "threats." Strong words for a tiny venture with a workforce of 300. Yet in this David and Goliath match up, little Symbian is wielding a powerful digital slingshot.

What's really troubling Gates is Symbian's mighty parents. Mobile phone powers Nokia, Ericsson, and Motorola, along with British handheld-computer maker Psion PLC, formed the venture last summer. The idea was to create a common software platform for the next generation of Web-surfing phones, souped-up cell phones that will give callers access to the Internet. These smart phones may proliferate faster than personal computers, accounting for perhaps 25% of 1 billion cell phones expected to be in use worldwide in six years. The aim: to untether the Net from desktops and phone lines. If the phone behemoths have their way, these machines, from phones to palmtops, will run on Symbian software--not on Microsoft's system for handheld machines, Windows CE. "Our goal is to become the wireless standard," says Symbian CEO Colly Myers.

The battle is already raging, with both sides scouring for partners and licensees. The stakes are enormous. If Microsoft prevails, it will ensure a key role for itself--and for the U.S.-dominated computer industry. But if Symbian comes out on top, the power moves toward the mobile-phone makers, which are dominated by Europeans.

Symbian has a head start, since its owners control most of the 175 million-unit cellular phone market. The partners want 60 million to 90 million new smart phones a year running on Symbian by 2003. But while they prepare five new wireless gadgets for next year, Microsoft is busy, too: signing up partners, from British Telecommunications PLC to Qualcomm Inc. of the U.S., to push handsets and other devices using Windows CE. One new phone, Microsoft says, should be unveiled in Germany in mid-March. "Eventually, we'll have a much broader range of devices [than Symbian]," says Greg Levin, Microsoft's manager for Windows CE in Europe.

BEWILDERING. The conflict boils down to a tussle between the computer and the phone. Microsoft argues that mobile Net surfing will just extend PC and server activity. With mobile machines running Windows CE, users will shift seamlessly from the office to the home, ballpark, or canoe. Symbian, Microsoft claims, with its focus on the handset, lacks the network links.

But the phone makers say computers are too unfriendly, bewildering users with crashes and freezes. More serious, the Symbian partners say Windows CE, a computer-industry product, is too slow to process commands for voice transmission. Microsoft says the charge is untrue, and that Windows CE is up to speed for phones.

The phone makers are already making their case in the market. In Sweden, the Telia phone company offers such Internet services as CNN Interactive and condensed E-mail messages via mobile phones. France's Alcatel has designed a display for mobile phones that depicts rush-hour traffic in Paris.

Within a year, the Symbian partners will market their first smart phones. Ranging from micro-portables to palmtops, they'll boast color screens and offer market updates, weather reports, and maybe even ESPN bulletins following each Mark McGwire home run. Microsoft hopes to leverage its business-networks edge to open niches for Windows CE.

Whoever wins, consumers can expect tools that will make the Net as portable as a purse or wallet. "Life is going Internet," says J.T. Bergqvist, senior vice-president at Nokia Telecommunications. "We believe most Internet usage will be wireless." The only questions now: What sort of machines will sell--and which operating system will prevail?

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