Microsoft's mobile strategy set to pay off

The biggest news from the recent CTIA Wireless 2007 show: After years of mostly talking about mobile applications and content, the industry is finally acting. And, lo and behold, Microsoft is positioned to cash in.

Mobile handsets became more than just phones several years ago with the success of simple applications such as text messaging, picture messaging and mobile games. Up next are handsets with music players that can download songs; mobile phones with network-assisted GPS navigation and local search; and handsets with biometric sensors and near field communications that offer a secure alternative to credit cards.

Ironically, most mobile handsets still use esoteric real-time operating systems (RTOS) such as Mentor Graphics' Nucleus and ENEA's OSE. These RTOSs were designed for small footprint devices, optimized for reliable phone operation and served the mobile industry well for many years.

Smart phones, a small but growing percentage of the burgeoning handset market, use high-level operating systems (HLOS), such as Symbian OS, Linux and Windows Mobile. HLOSs enable handsets to run more sophisticated user applications. They also provide better development tools, and support interoperation with desktop computers and the Web.

A big push to standardize mobile phone operating systems has begun. Standardization is desperately needed as feature-rich handset models are introduced at an ever-faster clip. Handset operating system standardization will enable more phones to run the same applications; reduce application development time and cost; and streamline handset testing and management for mobile operators.

Best of all, handset operating system standardization will attract more talented software developers. With approximately 2.5 billion mobile phones in use today, new models featuring more processing speed and memory, and 3G networks rolling out all over the world, there is a significant opportunity for software developers.

The race is on to extend HLOSs beyond expensive smart phones and into mid-tier handsets. Symbian OS's advantage is that it was specifically developed for mobile devices. Though Symbian is the leading smart phone OS supplier, Nokia owns close to 50 percent of the firm, and some doubt Symbian can remain independent.

Linux is an open source operating system, and is widely seen as manufacturer-neutral. However, Linux was developed for servers and is being adapted to the mobile environment, and mobile standardization efforts are fragmented. Still, it has made significant inroads in Asian mobile phone markets.

The mobile phone industry has long been leery of Microsoft gaining control of the handset operating system. Microsoft has wisely responded with a two-pronged strategy: Windows Mobile is Microsoft's branded solution for enterprise and professional users who demand desktop compatibility; Windows CE is Microsoft's embedded solution (available largely in source code format) that can be branded and customized by others for the consumer market.

Intrinsyc Software was among the first to spot the opportunity. Its Windows CE-based platform, Soleus, enables fast development of a wide range of consumer mobile devices with all of the advantages of a Microsoft engine -- which is precisely what the industry needs.

The biggest challenge for handset applications remains the user experience. People love to hate Microsoft, but by offering a flexible user interface on a platform that can interoperate with desktop PCs and the Web, Microsoft is uniquely positioned to power the new generation of multimedia, multifunction mobile phones.