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Microsoft: Boom Times Ahead for Windows Mobile

Windows Mobile
Source: Reuters

TAIPEI -- Microsoft (NASDAQ: MSFT) expects global unit sales of its Windows Mobile software for mobile phones to grow at least 50 percent per year in fiscal years 2008 and 2009 as demand for smartphones rises rapidly.

"Fifty percent growth is the minimum," Eddie Wu, the software company's managing director of OEM embedded devices Asia, told Reuters on the sidelines of a news conference on Tuesday.

He said Microsoft expects to sell 20 million units in its 2007/2008 fiscal year ending in June, and expects to grow at least 50 percent annually over the next two years. It sold over 11 million units of its Windows Mobile software in its 2006/2007 fiscal year ended last June.

"We're actually still seeing very good growth [for our mobile software] in markets like Europe and the United States," Wu said.

Wu added that growth of Windows Mobile is seen fastest in Asia-Pacific, Middle East, Brazil, Russia and India.

Microsoft's mobile communications division provides operating systems for smartphones and other mobile devices based on the Windows Mobile platform. Its clients include South Korea's Samsung Electronics, Motorola (NYSE: MOT), High Tech Computer (HTC) and Asustek Computer.

Microsoft competes against Symbian-based operating systems, which are used by vendors such as Nokia (NYSE: NOK) and LG Electronics.

It also faces stiff competition from other players such as Apple (NASDAQ: AAPL), BlackBerry maker Research In Motion (NASDAQ: RIMM) and Palm (NASDAQ: PALM).

"Even if Microsoft is growing at a rate of 50 to 60 percent, it doesn't mean they can gain that much share since Microsoft and Apple's mobile operating system is still much smaller compared with the Symbian system," said Kevin Chang and analyst with Citigroup (NYSE: C).

"But [Microsoft] is one of the few players offering touchscreen platforms, so that is helping them grow," said Chang, adding that vendors such as Sony Ericsson may soon also launch touchscreen smartphones with Windows Mobile.

Global smartphone unit shipments grew 52.5 percent from a year ago to hit around 12 million units in 2007, based on data by Gartner (NYSE: IT), and the market is set to continue to increase in high double digits in 2008 and in 2009, analysts said.

Microsoft also said earlier this year that it would offer full Web browsing capabilities for mobile phones in the third quarter of 2008, following in the footsteps of Apple's iPhone, which has won praise for the way it displays Web sites as they would appear on a computer.