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When the giants agreed to an alliance, Psion became the Cinderella of the mobile-phone world. Analysts figured that if it won 15% of the mobile-phone market projected for 2003, Psion's share of Symbian alone could be worth $430 million a year. The deal also meant that Psion's computers might find more customers. Psion's depressed shares soared as a result, from $3.36 to $12 on the London Stock Exchange. "For a while it looked like Psion was finished, but by getting together with the dominant players in the telecom industry and partnering with them, they have given themselves a lifeline," says Patrick Yau, an analyst with Nomura Securities in London.
So far, only Philips Electronics has actually licensed Psion's software for use in a smart phone, but the software has a compelling advantage: Symbian is charging just $5 a phone, while Microsoft charges computer makers $25 for each device that uses Windows CE, according to analysts. Jan Ahrenbring, an Ericsson vice president, adds that Microsoft's operating system "really wasn't applicable for mobile," but Microsoft maintains that the software is modular and can be customized to suit customers needs. South Korean manufacturer Samsung has produced the prototype of a Windows CE phone that it plans to market next year.
In addition to Symbian, the telecommunications industry has formed two other alliances to improve the usability of wireless devices. One of them, called the WAP Forum (for Wireless Application Protocol), is designing special browsers to bring Internet data to mobile phones, while a group named Bluetooth is trying to set a universal standard for radio communications between smart devices like palm computers and mobile phones. Interestingly, Microsoft has not joined either group.
For a look at how these devices may eventually be used, Finland offers some interesting insights. At the Helsinki airport, a Coke vending machine has a mobile number instead of a coin slot--dial up the machine and a Coke drops out, with the charge appearing on your phone bill. There's also a Helsinki car wash you can operate without leaving your car: dial 1 for wax and 2 for no wax.
Similar practices are spreading across Europe. In Germany, Deutsche Telekom's D1 service allows motorists to call in with a destination, then drive on, as a computer-generated voice calls back every 15 minutes with traffic information. In Italy, operator Omnitel lets users call a special number while standing in front of designated piazzas; the computer figures out where you are and plays back a recorded discourse on the art and history of the location in one of five languages.
But those are still sideshows. One of the biggest areas of growth for mobile is expected to come in the form of data communications. It is already possible in most European countries to subscribe to services that will send soccer scores and stock prices to your mobile using short messaging, much as a pager does. Soon an advertiser like McDonald's will be able to send a data message to every mobile phone at a football stadium urging their owners to eat a Big Mac at halftime. Or a pedestrian walking past a car showroom might receive a message inviting him inside for a special deal.