Microsoft and Nokia Go User-Friendly

With the success of the iPhone, mobile-phone players want to improve menus and other navigation tools on their own handsetsbut at what cost?

Of all the ways Apple's iPhone is disrupting the mobile-phone industry, one of the most tangible is in how it's shaking up the user experience. The release of the music-playing mobile phone brought many people a whole new way to call up services, navigate from one section to another—even dial a phone number. Apple (AAPL) may raise the bar further in January, when it's expected to make it easier for outside developers (, 10/16/07) to create tools and features for the iPhone.

Competing makers of smartphones—wireless handsets that double as mini computers—have gotten the message. And in the wake of the iPhone launch, many are taking pains to improve their own software and hardware to eliminate the often arduous or non-intuitive task of gaining access to even the most basic information. "The industry has been in need of it long before the iPhone came out," says Julie Ask, an analyst with consultancy JupiterResearch.

Rivals, including Microsoft (MSFT), Motorola (MOT), Sony Ericsson, and the Nokia-led Symbian group of developers, have all recently announced investments and features to overhaul how their phones look and feel and how they're used.

The User Interface Difference

The so-called user interface, the menus and other features we use to make the phone do what we ask, will never be the same. "We are investing a lot in user interface," says Phil Holden, director of mobile services for online services business at Microsoft. "Many of us believe one way we can differentiate our [mobile] search experience is through [digital menu] innovation."

Microsoft, which some critics say has lagged behind in digital menu innovation, on Oct. 16 unveiled a series of upgrades, many of them aimed at cell phones and building on its acquisition of mobile-search company Tellme. Microsoft introduced a free directory assistance service—usable from any phone—that's similar to a directory product available from Google (GOOG). Microsoft also introduced voice-activated mobile-Web search and made it easier for users to request maps via cell phones.

Apple's rivals are also making an effort to foster an ecosystem of developers who can in turn create new applications for use on cell phones. On Oct. 15, Motorola said it will become a co-owner, with Sony Ericsson, of UIQ, a company that has created a user interface for mobile devices that run the Symbian operating system.

Nokia Ramps Up Efforts

These digital menus let cell phones perform sophisticated tasks such as sending and receiving e-mails. Motorola and Sony Ericsson, which have already used UIQ's digital menus in phones, plan to increase developer support for UIQ. Motorola's backing "gives confidence to UIQ software developers that they are not wasting their time," says Avi Greengart, an analyst at consultancy Current Analysis.

The world's largest cell-phone maker, Nokia (NOK), is also ramping up efforts to create a more pleasant user experience. On Oct. 16, the Nokia-led Symbian consortium announced "the largest change to [its operating system] in two years," says David Wood, executive vice-president for research at Symbian.

The industry consortium doesn't develop its own interface designs, but it unveiled new technologies that could come in handy for interface developers. One is ScreenPlay, a new graphics tool that will let designers create new types of digital menus. ScreenPlay allows for "blending," where a transparent graphical element can sit on top of another menu item.

Outpricing the Market?

Carriers too are taking steps to improve cell-phone users' experience. On Oct. 16, AT&T (T) announced a new feature, My Media Net. The service lets consumers use a PC to customize their online wireless experience. For example, users can sit down at a regular-size keyboard—rather than the smaller-size wireless keypad—to enter Web addresses frequently dialed on a cell phone.

Of course, there are pitfalls to adding too many bells and whistles to cell phones. Chief among them: The more feature-rich the device, the more expensive it becomes. As phones' digital menus start to run richer graphics, they will require more expensive handset innards, wrote Richard Windsor, an analyst with Nomura, in an Oct. 15 report. "We think that the launch of the iPhone has caused the industry to accelerate its development schedules for next generation [user interfaces] which should have a meaningful upward impact on the [cost]," he wrote.

And those higher costs could slow smartphones' entry into the mass market. While smartphone sales are expected to rise 38% to 144.6 million in 2007, growth could slow to 11% in 2011, when 307.1 million such devices will be shipped, according to Nomura. That's still a lot of growth. Still, Windsor writes, "while some may consider our forecasts for the smartphone market as conservative, we consider them to be realistic [considering] the cost to deploy the features that users are demanding."

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