Motorola, Microsoft Team Up on Cell Phone

Microsoft software will power a series of new Motorola smart phones and wireless devices.

CHICAGO (AP)—The fledgling competition to develop "smarter" cell phones for Web-hungry consumers is getting a powerful new tag-team entry: Motorola Inc. and Microsoft Corp.

The nations largest cell-phone and software manufacturers plan to announce an alliance Monday under which Microsoft software will power a series of new Motorola smart phones and wireless devices.

The products, starting with the Motorola MPx200 phone that is to make its American debut in the fourth quarter and be carried by AT&T Wireless Services Inc., will be the newest entries in a category being eyed by several big software and phone makers.

Smart phones, combining the features of cell phones and handheld computers, have been introduced in only a handful of countries and remain sparse in the United States. Fewer than 10 million of the estimated 450 million handsets being sold worldwide this year are considered smart phones.

But Gartner Inc. forecasts that volume could multiply six or seven times by 2007 as companies roll out increasingly sophisticated models to try to meet consumer demand for portable digital devices.

"The race for mobile technology will start heating up now in the U.S., with different handset makers and platform providers all vying for the hearts and minds of consumers," said analyst Michael Gartenberg of Jupiter Research. "The market is one that hasnt been won by any one company in particular yet."

While Motorola hopes the new phones will help it chip away at Nokia Corp.s big lead in the global handset market, Microsoft is still little-tested in cell phones despite its powerhouse status in desktops, the Internet and video games. The move is part of a push to get its software into nearly anything that connects to the Internet.

"This represents a key milestone for our business, to bring together Motorolas expertise in designing and engineering handsets with our software capability," said Andy Haon, director of product and solutions management for Microsoft.

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