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Gates says mobile phones will overtake iPods

Microsoft's chairman says he doesn't "believe the success of the iPod is sustainable in the long run."

Microsoft Chairman Bill Gates sees mobile phones overtaking standalone MP3 players and views the raging popularity of Apple Computer's iPod player as unsustainable, he said in an interview published Thursday.

"As good as Apple may be, I don't believe the success of the iPod is sustainable in the long run," he said in an interview published in Germany's Frankfurter Allgemeine Zeitung.

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"You can make parallels with computers: Apple was very strong in this field before, with its Macintosh and its graphics user interface--like the iPod today--and then lost its position," Gates said.

Apple has around two-thirds of the global market for MP3 music players, which store thousands of songs on pocket-sized disk drives or smaller flash memory chips. Apple sold more than 5 million iPods in the last quarter.

But it faces increasing competition not only from the likes of Sony, whose iconic Walkman dominated the personal audio market for two decades, but also from mobile-phone companies integrating MP3 players into handsets.

Partly in response to pressure from Apple, Microsoft is now positioning itself to be a key player in the growing market for digital movies, pictures and music.

It is working with partners such as Samsung to provide its Windows Mobile smart phone software to nearly 70 handset makers.

"If you were to ask me which mobile device will take top place for listening to music, I'd bet on the mobile phone for sure," Gates told the newspaper.

Gates made similar comments in an interview with CNET earlier this week.

In the United States, however, Microsoft smart phones have been overshadowed by Research In Motion's BlackBerry wireless e-mail device, which has sold 3 million so far.

Gates said that Microsoft's upcoming Windows Mobile 5.0 --which will let e-mails pop up on a person's phone as soon as they arrive, and which is expected to be running phones on the market in the next few months--will be cheaper.

"The BlackBerry is great but we're bringing a new approach," he said. "With BlackBerry you need to link to a separate server, and that costs extra. With us, the e-mail function will already be part of the server software."

"Therefore I'd venture the prediction that Microsoft will make wireless e-mail ubiquitous."

He acknowledged, however, that Microsoft had made mistakes in the past.

"The consumer is always unpredictable. In principle, you can only throw products onto the market and then learn from your mistakes," he said.

And the 50-year-old Microsoft chairman said he will not remain with the company forever.

"I think that when someone is 60 years old, he should better leave it to someone else to follow trends in technology," he said. "But until then, there's still a lot to do."

Story Copyright © 2005 Reuters Limited. All rights reserved.