March 24, 2008 / 11:23 PM / 10 years ago

Microsoft sees Windows gaining smartphone share

SEATTLE (Reuters) - Microsoft Corp (MSFT.O) expects license sales of its Windows Mobile operating system to outpace the overall growth in advanced mobile phones known as smartphones over the next few years, a top company executive said on Monday.

Microsoft entertainment and devices division president Robbie Bach said he expects phones running Windows Mobile to gain market share as the overall smartphone market nearly quadruples in size over the next 3 to 4 years to around 400 million handsets.

“I certainly think you should expect us to continue to gain share,” said Bach in an interview with Reuters. “The market is starting to take off within the category that we really play in. In this case, we have a clear opportunity to grow share.”

Microsoft, the world’s largest software maker, has predicted its Windows Mobile license sales will reach 20 million in its fiscal year ending in June, nearly doubling its sales from a year earlier. It hasn’t issued a forecast for the next fiscal year.

The market for smartphones, mobile phones with computer-like features like e-mail and Web browsing, is growing crowded. Apple Inc (AAPL.O) has rolled out its iPhone and Research in Motion’s RIM.TO Blackberry device maintains a loyal following among business users.

Meanwhile, Britain’s Symbian operating system leads the market with almost two-thirds market share due in part to extensive use of its software by mobile phone leader Nokia NOK1V.HE and Linux could get from a boost from Google Inc’s (GOOG.O) open-source mobile phone platform called Android.

Still, Microsoft has made progress getting Windows Mobile on more phones and on more operators. The latest to sign up with Windows Mobile was Sony Ericsson (6758.T) (ERICb.ST), joining Motorola Inc MOT.N and Palm Inc PALM.O as offering devices with the Microsoft operating system.

    Instead of offering both the hardware and software like RIM’s Blackberry or Apple’s iPhone, Microsoft sees a better opportunity by offering the software platform for other handset makers to run.

    It is a business model that was successful for Microsoft on the PC where Microsoft worked with many hardware manufacturers, but less so on portable media devices like Apple’s iPod.

    “(Gaining market share) is going to happen, in our view, as a platform play. The way for us to be successful in that is to get big numbers and a bigger percentage of that pie,” said Bach.

    Analysts estimate that Microsoft generates license revenue of $8 to $15 per handset, depending on configuration.

    Editing by Richard Chang

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