In separate announcements from Barcelona yesterday, three traditional powerhouses in computing and communications -- Microsoft, Intel and Nokia - kick-started major revamps to their technology to adapt to a quick-changing smartphone and mobile device market that's increasingly dominated by Google and Apple.
"Microsoft is in a bigger 'start over' penalty box than Intel and Nokia, but it really is a start over for all of them," said Jack Gold, an analyst at J. Gold Associates about the announcements made at the Mobile World Congress in Barcelona. "Microsoft does have a much steeper road to climb to get back into the game than Nokia/Intel does."
Intel joined Nokia in unveiling Meego, a Linux -based open operating system to be used in smartphones, netbooks, connected TVs and tablets. Meego combines features from Intel's Moblin OS and Nokia's Maemo OS. Devices using Meego are expected to arrive in the second half of 2010.
Meanwhile, Microsoft CEO Steve Ballmer touted Windows Phone 7 Series software that's expected to be running on smartphones due out by the end of the year. Ballmer said the new version of Microsoft's operating system for mobile phones will bring "more consistency in the hardware platform and in the user experience" than earlier versions.
In both announcements, it was obvious that the three companies are adjusting to the market success of Apple's iPhone and the coming iPad tablet, as well as Google. The search company is behind a host of software applications for a variety of upcoming Google Android OS smartphones and devices that it helped create in its sponsorship of the Open Handset Alliance.
Gold said that Microsoft has "basically had to nuke its existing OS and start over", while Intel and Nokia could blend most of the existing code in Moblin and Maemo to create Meego.
Ballmer did not describe Windows Phone 7 Series as a start-over, of course, but implied it comes in reaction to past criticism of Windows Mobile OS and its decline in sales in late 2009.
"We have a chance to make a major impact on the [smartphone] market... (with the new OS)," Ballmer said. "We had to step back and recast."
Ballmer also didn't go as far as he did last fall when he told investors that Microsoft had "screwed up with Windows Mobile" and had shuffled its Windows Mobile team to regain lost ground.
Updated user functions in Windows Phone 7 include concepts such as 'hubs' that display a page of contacts called 'people', for example. Other hubs will be labelled 'office' for note-taking and synchronising documents with a PC; 'games', for integrating with the Microsoft Xbox live online community; and 'music+video' for synchronising the smartphone with Microsoft's desktop Zune jukebox and music store software.
Windows Phone 7 will also provide a touchscreen Qwerty keyboard as in some Windows Mobile 6.5 devices, Ballmer said.
Even with new innovations, Microsoft will continue to employ a licensing model where phone manufacturers pay a fee for Microsoft software, Ballmer said, offering no details. He also argued that 'free' software in open operating systems such as Android might not really be free.
Gold called the Meego announcement a positive for both Intel and Nokia. It will help Nokia make a "direct assault" on the enormous momentum behind Google's Android and Chrome, and will help Intel attack the ARM chip architecture used in smartphones and other smart personal devices, he said. ARM chips, developed and licensed by ARM Holdings, are used extensively in smartphones and mobile phones; Intel has developed the Atom chip to compete directly with ARM.
But Gold said "it remains to be seen if anyone besides Intel and Nokia will embrace Meego". He believes Nokia will hold onto its existing Symbian OS for lower-end mobile phones, but needs something like Meego for higher end smartphones down the road.
Nokia dominates the smartphone market today with its Symbian OS, but Android is projected to catapult to the No. 2 spot behind Nokia by 2012, according to Gartner. and IDC.
While Apple's total share of the smartphone market is well behind Symbian's, the company's growth year-over-year - and excitement over next month's arrival of the iPad - that make it such a challenge for traditional companies like Microsoft, Intel and Nokia.