No Exclusive Field in the Digital World of the 21st Century

The number one sharer of the world software market, Microsoft (MS) and the number one in the cellular phone terminal market, Nokia is battling for the hegemony of the digital market.

The British weekly economy magazine the Economist reported in its recent issue (published on the 23rd) that the world cellular phone terminal market became an unpredictable battlefield since MS entered the next generation cellular phone, Smart Phone field.

MS, which has been grown with a motto of `one PC in every home, every desk,` is changing the motto to `one PC in every consumer`s pocket` since the growth rate of the PC sale has been blunting. MS put its interests to a computer that is small enough to put it in a pocket. Therefore, it had provided the computer operating system, Windows to the PDA, but it changed its conception.

It paid attention to cellular phones that were already in the pockets of one billion people worldwide. If it can connect the function of computer to a cellular phone, it is same as putting computers in every consumer`s pocket.

The phone that combined the functions of a cellular phone and a computer is Smart Phone. According to the market analysis organization, Gartener, Smart Phone will outpace the sale of PDA in 2004, and 54 million of them will be sold worldwide by 2006.

MS, in cooperation with an European mobile communication provider, Orange, put a terminal `SPV,` which has Windows for cellular phones, in the market last month.

Of course, MS is not making the terminal itself. It uses the same strategy that selling its exclusive technology, Windows, to the makers of PC hardware, so it made big money although the PC makers had ups and downs. It leaves the terminal to others and provides only Windows for cellular phones.

Nokia already read the strategy of MS, so it formed a software consortium with Motorola and Gimens and developed an operating system for Smart Phone called Symbian and put it to the market. The phones made by the companies participated on Symbian take 80% of the terminal market, so they are not giving any chances for MS to get in to the market.

Recently, MS succeeded to take the 3rd sharer of the world cellular phone terminal market Samsung into its Windows, but the Economist reported, “Samsung is famous for licensing all the technology.” Samsung is also participated on Symbian, so it can be classified as an ally of MS.

Since MS failed to induce major terminal makers, it is selling Smart Phones with Windows directly to the consumers in cooperation with medium and small terminal makers. Recently, a British terminal maker called Sendo fell into MS side and the HTC of Taiwan also shook hands with MS, but their influence is insignificant.

This weekly magazine reported that in the worst-case scenario, MS could buy out the terminal makers with its humongous capital power.

The Nokia`s status is not all secure. It does not have an exclusive technology like MS Windows and just keep the number one position by developing new product and recognition value of the brand, so it is weak on competition.

The Economist reported that this hot battle between MS and Nokia in the cellular phone terminal market and the strong challenge of the late starters would raise the arms of the consumers as the final winner.

Eun-Taek Hong euntack@donga.com