Microsoft falls behind in mobiles

THERE has never much love lost between executives of Microsoft and Google.

Microsoft chief executive Steve Ballmer - in Sydney the other day for a software developers conference - was quick to pour scorn on Google's new Android mobile phone system when he turned up at a Telstra investor briefing.

"Google can hire smart guys, hire smart people, blah-de-blah-de-blah," quoth Big Steve in answer to a question from the floor. "I don't really understand their strategy - maybe somebody else does.

"Turning up to an investor meeting saying they've just launched a mobile operating system with no revenue model, yay! - I wouldn't do that," he said.

Ballmer reeled off a list of rivals in the mobile market, including Apple, Symbian, BlackBerry and Mobile Linux, and said: "Google doesn't really bubble to the top of the list."

Maybe not. But nor - yay! - does Windows Mobile, the ageing operating system Microsoft peddles to a large number of phone makers.

Win Mobile has been taking something of a pounding in the market in recent months as buyers turn to slicker, more imaginative smartphones such as Apple's touchscreen iPhone or the new BlackBerry Bold. The Microsoft system runs third in the market for smartphone systems, well behind Nokia's Symbian and Canada's BlackBerry.

It also faces a lively new rival in Google's Android open-source system. So far only one Android phone, the G1 made by Taiwan's HTC, has been built, and it's available only in the US.

HTC has dropped hints about an Australian release before the end of the year, and a small local outfit, Melbourne-based Kogan, plans to have its own Android phone - made to order in China - on sale here for $199 by Christmas.

Meanwhile, most of the excitement in the smartphone market is coming from Apple's iPhone. A big part of its success has been the advent of the App Store, a one-stop shop operated by Apple that offers a plethora of free or dirt-cheap but very sexy applications for the touchscreen gadget. There are more than 6000 of them, and they download easily and wirelessly at the tap of a finger.

The lesson hasn't been lost on Google or Research in Motion, BlackBerry's maker. Google has set up the Android Market, and has attracted thousands of open-source programmers to develop apps for the new mobiles. RIM plans to open a similar store in March next year.

There's nothing similar in the Windows Mobile world - yet. Most users grab applications from a variety of sources, including their mobile phone carriers or specialist websites.

Of course, on Windows Mobile you can run cut-down versions of Word, Excel and other Microsoft Office applications, which you can't do on an iPhone. But who wants to edit a spreadsheet on a smartphone when you could be watching video, playing Moto Chaser, or strumming along on Pocket Guitar?

Steve Ballmer knows a good thing when he sees one. Microsoft is rushing to develop a new mobile operating system, complete with touchscreen technology, based on the upcoming Windows 7 desktop system.

And, yes, there will be a Microsoft apps store, probably callled Skymarket. What's coming next year may be not so much a battle between mobile phone makers as a battle of the stores.

AUSTRALIA is the cheapest place in the world to buy an Apple iPod, according to CommSec, the Commonwealth Bank's investment subsidiary.

CommSec publishes an iPod index that monitors the prices of an 8GB iPod nano in 62 countries.

According to CommSec chief economist Craig James, Australia was the 14th cheapest place back in July when the Aussie dollar was high. Now that the dollar has slid dramatically, he says, we have become the cheapest - 25 per cent cheaper than Britain, for instance.

This seemed a bit odd to Doubleclick, because a sliding exchange rate makes imports more expensive, not cheaper.

So what's going on? The truth is Apple Australia has not yet adjusted the local iPod nano price ($199) for the change in the exchange rate. Like most big multinationals, Apple sets a rate months ahead and holds it regardless.

So Australians are paying the same price they were when the new nano was launched in early September.

That will surely change. Apple Australia has already jacked up the prices of its MacBook notebooks (introduced after the currency movements), and sooner or later - unless the dollar goes back up - it will do the same for the iPod range. Doubleclick tips something like $240-$250.