News From Telecom World

Microsoft and LG plan to work closer on mobiles

Posted on: November 5, 2008

As competition in the mobile phone market heats up, two companies with flagging momentum are teaming up to try to compete better with the market leaders.

Microsoft Corp. and LG Electronics Inc. on Monday said that they plan to work closely together, collaborating on research and development, marketing, applications and services for converged mobile devices.

The announcement came from Seoul, Korea, LG’s base, during a trip there by Steve Ballmer, Microsoft’s CEO.

The collaboration is not a first for the companies. LG has already been making phones that run Windows Mobile. But the agreement could signal an intensified effort by both companies to try to beat the competition.

While LG has had some hot sellers, such as the Chocolate, it now faces challenges from new competitors Apple Inc. and Google Inc. that are generating more excitement. Google just two weeks ago introduced the first phone to run on its Android software, High Tech Computer Corp.’s G1. Apple’s iPhone continues to build momentum.

Microsoft too has been affected by the new competitors. It has been working recently to try to position Windows Mobile, traditionally regarded as solely a business tool, as also being useful for more personal applications. LG has traditionally focused on phones that would appeal most to mass-market consumers.

Both companies have slipped in rankings recently. A recent Gartner Inc. study showed that worldwide, Microsoft in the second quarter this year slipped into the third place among providers of smart-phone operating systems, behind No. 1 Symbian Ltd. and No. 2 Research In Motion Ltd. Last year in the same quarter, Microsoft beat out RIM for the second position.

A recent IDC study showed that LG during the third quarter this year slipped into the No. 5 position worldwide among mobile phone makers.

In a statement, the companies said they expected that their agreement would create momentum and innovation in the industry.

Source: Computer World

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