Microsoft Corp. Chairman Bill Gates urged the nation's wireless carriers to embrace fancier cell phones, saying his software developers would create better software for them that would fuel a new era of revenue growth for the industry.
Gates told software developers and phone executives attending the Cellular Industry & Telecommunications Internet Assn.'s annual convention that consumer interest was building for devices that combine the personal productivity functions of hand-held computers with the communications capabilities of wireless phones.
To that end, Gates announced that Sprint PCS and Verizon Communications Inc. would use Microsoft's Smartphone operating system software in phones made by Samsung and Hitachi.
Gates also said Microsoft would redouble efforts to expand its alliances with other carriers.
Geared toward business users, the phone software contains all of the Microsoft Office programs and lets users conduct conference calls. The new phones will have voice memo recorders, built-in digital cameras and software that can play short video clips once carriers have sufficient bandwidth.
As sales of personal computers slow, the software giant faces a crucial battle to gain a foothold in a booming wireless phone industry, which has nearly tripled in size over the last decade to 141 million subscribers and annual revenue of $76.5 billion.
"From a company revenue standpoint, the mobile market is absolutely critical to the future growth of Microsoft," said Bob Egan, of consulting firm Mobile Competency.
Microsoft is battling London-based Symbian and PalmSource Inc. of Sunnyvale, Calif., which also are selling software to power a new generation of mobile devices.
The phones sport color screens, digital cameras and improved Web-surfing capability.
Some of the new mobile services already are taking off: Wireless data messaging generates more than $1 billion in revenue for carriers, according to CTIA. The technology has been aided by shows such as Fox Television's "American Idol," which allows viewers to cast their vote by wireless messaging services.
Of the world's top four wireless handset makers -- Nokia, Motorola Inc., Samsung and Siemens -- only Samsung has thrown its support behind Microsoft's Smartphone software. And even that support is tenuous, as Samsung has continued to support software based on the rival Symbian operating system as well.
But Gates said Microsoft would make inroads in the mobile market by focusing on carriers instead of handset makers.
Separately, Microsoft said it would delay launching a high-speed Internet access service it plans to offer with Verizon to work out technical details. The service, originally set to launch this quarter, is expected to be available by the end of June.