T-Mobile to launch Microsoft phone in Europe

CANNES, France: T-Mobile, a unit of Deutsche Telekom, will buy handsets manufactured by Taiwan contract manufacturer High Tech Computer, the same company that built the first Microsoft-enabled handset for France's mobile operator Orange, a unit of France Telecom. "It will be available in the summer," Anne Marie Duffy, Microsoft's European marketing manager for mobile devices, told Reuters in a telephone interview.

T-Mobile, one of Europe's top wireless carriers, said it will add its own services on the device, which will sport all standard Microsoft features such as email, messaging, picture taking and a calendar.

The announcement coincides with the opening of 3GSM, the world's largest mobile communications trade show in Cannes, France, at which Microsoft will try to convince more operators of its good intentions to enter the handset industry.

Since Microsoft made clear it wants a piece of the mobile software market three years ago, it has been slow to win over established mobile phone makers, having signed up just one of the top five players: South Korea's Samsung Electronics.

Recognizing that traditional phone producers such as Nokia and Motorola feared Microsoft could come to dominate the handset industry like it does the personal computer market, Microsoft shifted its focus to mobile operators, who have traditionally had a tense relationship with handset makers.

The software giant is persuading them to produce their own handsets, using reference designs provided by Microsoft and its chip-making partners such as Texas Instruments.

T-Mobile is Microsoft's fourth operator to produce phones with the Microsoft-TI reference design, after Orange, AT&T Wireless in the U.S. and Smart in the Philippines.

Orange is the only one with a Microsoft phone on the market, having sold around 40,000 since the launch late last year. That number is about one-tenth of non-Microsoft picture phones sold by Orange's British rival Vodafone over the same period and a drop in the ocean of the 400 million handsets that were sold around the world last year.

Microsoft also said that Samsung would show in Cannes its first Microsoft-based handheld computer with integrated phone for the European and Asian GSM markets.

Taiwan's Mitac would also show its first Microsoft product, a clamshell phone with an integrated camera. In addition, a mobile phone reference design that Microsoft and U.S. chip giant Intel announced last year, will now be available to mobile operators through Taiwan's electronics contract manufacturer Wistron, traditionally a laptop producer which recently started making handheld computers for U.S. computer maker Dell.

"It underlines that new companies can enter this mobile phone market as a result of our efforts," Duffy said. Like Microsoft, Intel is new to the mobile phone market, which it has identified as a growth market compared with the stagnant personal computer industry.

Intel also has had trouble getting a foot in the door with established handset makers and instead is creating relationships with the same Asian contract manufacturers that Microsoft is courting.

T-Mobile also has agreed to start offering Microsoft's MSN services, which are designed for Microsoft smartphones and handheld computer phones. It is the first time that Microsoft will try to charge consumers for Internet services that until now were free of charge, such as messaging and Hotmail email.

© Reuters