Microsoft teams with LG to revive Windows’ challenge to Symbia

Every time it seems that Microsoft might have abandon any hope of dominating the mobile software market, it bounces back with a new challenge to the wireless OS heavyweights, Symbian and Linux. This time, it has formed an alliance with top five handset maker and cutting edge webphone developer LG of Korea, and the pair will work closely on “converged mobile devices” from handsets to media players to netbooks, collaborating from R&D right through to sales and the creation of mobile web services.

The agreement is no more than a Memorandum of Understanding (MoU) at this stage, so could take two years or more to turn into products, but it points to some clear aspects of Microsoft’s strategy, even as it struggles to retain momentum for Windows Mobile and its web services offerings, at least outside its PC enterprise heartland. One, it has no intention of taking the ‘road most travelled’ and saving Windows by adopting open source. Two, it is belatedly severing the Wintel ties, which have kept it largely confined to Intel-based handsets such as the Touch range from its primary partner, HTC. Three, it accepts it is not best placed to create services and user interfaces for the converged mobile world itself, but needs more successful partners - a climbdown it also made when it allowed Sony Ericsson to design its own UI for its Windows handset, Xperia X1. Four, Windows Mobile and its associated software platforms are not going away.

On the surface, Microsoft gets the most out of this deal (though exact terms and any financial arrangements remain secret). LG is currently the most advanced of the top five in smartphone design and has huge insights into mobile web services and user experiences because of its home base in the world’s most advanced market in this respect, Korea. It has strong carrier partnerships and could drive Windows devices into CDMA, W-CDMA and even WiMAX networks, as well as via close ties with the consumer electronics channels. Microsoft, however, does bring its massive installed base - the PC side of which becomes more relevant as devices converge at the high end, forming the ‘mobile internet device’ hybrid category - and its global base of developers. And as the handset makers jostle for strategic position in pressurized markets, its steadily improving OS may prove a counterweight for Nokia rivals, to the huge influence the market leader will retain over Symbian, even as it goes into open source. Motorola has already chosen to back Android (and, secondarily, Windows) rather than Symbian, while Samsung and Sony Ericsson are taking multi-OS approaches. Yet if the companies were choosing on the basis of functionality and installed base, they would pick Symbian every time, so the desire to have greater control of their software partners, and not to let Nokia have everything its own way, are the main motivators. LG, too, may be hoping to leverage a close Microsoft alliance to ensure that there is competition in the smartphone OS sector, rather than one de facto standard under the wing of the Finnish giant.

LG Electronics’ CEO Yong Nam said, on signing the MOU with Microsoft chief Steve Ballmer: “This agreement between LG and Microsoft will create critical momentum in the industry. With this partnership, mobile computing will truly become an everyday reality, and LG and Microsoft will be at the forefront of it.”