Innovation: Turning Your Phone Into A Mini-PC

You can run from Microsoft, but the places you can hide are getting scarce. The company controls your desktop with Windows and has invaded your living room with the Xbox. Now it wants to get inside your cell phone too. This is not necessarily a bad thing. If you can get more rest on a train in the future because the guy next to you is checking his office e-mail via Outlook or browsing full-color Web pages on his handset instead of screaming “I’m on the train!” into it, you can thank Bill Gates for the peace and quiet.

You can also thank him for turning the cell phone from a simple communication device into a mini-PC. Of course, just as Microsoft and its longtime partner Intel don’t actually put together PCs, they aren’t going to start churning out cell phones. What the two companies announced last week is a plan to license their blueprint of the innards of a cell phone to manufacturers; wireless companies can decide what the handset will look like and how much of the Microsoft software it will contain. While vastly increasing the versatility of your cell phone, the insides are standardized and therefore much easier to make. Which means we should start to see fewer squat, black, one-size-fits-all devices. “We want to help people create the iMac of cell phones,” says Juha Christensen, vice president of Microsoft’s mobility group.

It’s a smart move, seeding the marketplace with Microsoft products and Intel chips under cover of democratizing the industry. (Two wireless companies have already expressed interest, according to Microsoft.) But that doesn’t guarantee Gates another victory. He tried this strategy before by squeezing the same applications onto the Pocket PC, in an effort to steal market share from the popular Palm Pilot, but most Palm users preferred their current software’s simplicity. Cell-phone users may turn out to be similarly wary. “The mobile environment is not simply about downscaling the PC world,” warns Timo Poikolainen, a director of Nokia’s software division.

Nokia, maker of the world’s most popular cell phone, is Microsoft’s main stumbling block, and the two companies are likely to spend the better part of the next decade duking it out for control of this $91 billion industry. As Microsoft gets set to muscle in on Nokia’s turf, the Finnish giant is selling its own software deal with a rival operating system. Other cell-phone manufacturers like Motorola and Qualcomm are also releasing their blueprints. Even companies like HP, whose latest Journada handheld computer has a built-in smart phone, are getting in on the act. “Clearly, everyone wants a piece of everyone else’s pie,” says Sarah Kim, a mobile-communications analyst for the Yankee Group. “There’s an amazing war brewing.”

All this competition should be good news for road warriors and teenagers. Screens and memory sizes will get larger, mobile music and video services will proliferate, and sending instant text messages (assuming Microsoft and Nokia can agree on a common standard) should become just as popular in the U.S. as it is in Japan and Europe. And if you still want an old-fashioned cell phone without bells and whistles, you will pay a lot less than you do now, since wireless carriers will aim to make most of their money on the extras. Just try to keep it down when you’re on the train.

–C.T.