From the WSJ
By CASSELL BRYAN-LOW
February 13, 2006; Page B5
In an effort to muscle in on BlackBerry's stronghold on the mobile email market, Microsoft Corp. today unveiled several devices as well as offers from cellphone-service providers to make it easier for its customers to get messages on the go.
The initiatives build on software upgrades Microsoft announced in June to give customers immediate access to new email messages. Research In Motion Ltd.'s BlackBerry devices long have offered services that continuously deliver -- or push -- email to the handsets. Cellphones running Microsoft's software have relied on a cumbersome and sometimes costly method to automatically update users' email inboxes.
Now, Microsoft is announcing the first four devices to be shipped with its new push-email function built in. They are manufactured by cellphone and computer makers, and include Hewlett-Packard Co.'s new hand-held computer called the iPAQ hw6900. In addition, several wireless service providers are launching services to allow customers to take advantage of the push-email service. Those providers include Vodafone Group PLC and Cingular Wireless, which BellSouth Corp. owns jointly with AT&T Inc.
BlackBerry maker RIM, Waterloo, Ontario, leads the increasingly competitive mobile-email software market with more than 4.3 million subscribers. Analysts estimate there are about six million to 10 million mobile email users overall and that Microsoft, Redmond, Wash., has a few hundred thousand users. Finnish company Nokia Corp., the world's largest cellphone maker, recently signaled its designs on the mobile market by buying RIM rival Intellisync Corp. for $430 million.
Looking to leverage its big installed base in corporate technology departments, Microsoft hopes to compete largely on price. For corporations that already have Microsoft's Exchange Server 2003 software for managing email accounts and its Windows Mobile 5.0 software for cellphones, the push-email upgrade is available at no additional cost. With some competing offers, corporate customers need to pay several thousand dollars to purchase a mobile-email server and may have to pay an additional license fee of up to $100.
"Cost has been a significant barrier to widespread adoption of mobile business messaging," says Pieter Knook, senior vice president of Microsoft's mobile-devices division.
Analysts say they expect Microsoft to rapidly gain market share in the mobile-email-software market, but don't see the company catching up with RIM, at least anytime soon. Microsoft still has "some issues in the functionality they can offer," says Ben Wood, an analyst at technology research firm Gartner. "RIM's solution is richer in terms of some of the security and management features."
Other challenges include legal disputes, which recently have plagued the wireless-email industry. Closely held Visto Corp, Redwood Shores, Calif., has sued Microsoft and several other companies for patent infringement. Mr. Knook declined to comment on the Visto suit.
RIM, which has previously lost a patent infringement suit to U.S. patent holding company NTP Inc., is opposing a possible injunction shutting down most U.S. sales and service of BlackBerry. RIM last week said it has an alternative technology to keep its BlackBerry devices running in the event of a court-ordered shutdown.
Mike Lazaridis, RIM's president and co-chief executive, says the increased competition generally is helping to raise awareness among customers about wireless email. Of Microsoft's focus on push email, he says: "the fact that they're trying to catch up clearly establishes our credibility in this space."