7 November 2002 Microsoft’s ambitions in the mobile market have been dealt a major blow after the defection of Sendo, its last remaining high-profile licensee, to Nokia’s Symbian-powered Series 60 software platform.

The surprise announcement came just days before Birmingham, England-based Sendo was supposed to be launching a range of devices based on Microsoft’s Smartphone 2002 platform. A terse company statement hints at a disagreement with Microsoft, which owns a 10% stake in Sendo.

Microsoft has so far refused to comment.

But Niklas Savander, Nokia’s general manager for mobile Internet applications, was more forthcoming. He told Reuters that a key reason for the switch was that Nokia could provide the raw Series 60 source code, enabling manufacturers to more easily customise their devices.

Analyst group Ovum has suggested that Microsoft will need to change the Smartphone’s licensing terms before it can entice device makers back into the fold. “Microsoft’s licensing conditions could not accommodate the depth of customisation required by operators,” said Ovum analyst Eden Zoller.

Nokia’s Series 60 platform is based on the Symbian operating system. Highly modularised, Series 60 offers a wide range of plug-in options and simplifies the task of building next-generation mobile devices for handset manufacturers.

Instead of keeping the technology in-house, Nokia has opted for an aggressive licensing strategy in a bid to prevent Microsoft carving up the industry and marginalising hardware vendors such as Nokia.

After the recent defection of South Korean electronics giant Samsung, and now Sendo, Microsoft is left without any major licensees for its mobile technology. In order to sell its phones, it will be reduced to cutting its own deals with contract manufacturers in Asia/Pacific and selling them on directly to operators.

Sendo was founded in 1999. It designs mobile devices that are build by third party contract manufacturers in Taiwan and China. It currently supplies mobile phones to the UK virtual operator Virgin Mobile, Telecel Vodafone in Portugal and the Netherlands’ Telfort.

Infoconomy news:
Gates: Microsoft struggling against Nokia (23 October 2002)
Symbian: Microsoft momentum ‘mere hype’ (22 October 2002)

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Jorma’s dilemma (September 2002)
Nokia, Europe’s biggest technology company, faces a challenging future unless it can adapt to the rapidly changing wireless industry landscape.