The deal, as first reported by CNET News.com, calls for Microsoft's wireless data service software to be used in trials to offer subscribers access to corporate data such as email and contact information, as well as consumer applications such as e-books, interactive games and digital music.
The move is part of Microsoft's aggressive effort to position itself as the software provider for the next generation of computing. Many analysts expect the desktop computer, where Microsoft dominates, to fade from prominence as the primary method of accessing the Internet, with smart-cell phones and personal digital assistants emerging as a more popular alternative.
Lending credibility to the trend, investment bank Lehman Brothers has estimated that 50 percent of U.S. cell phones will be Internet-enabled by 2007. This market is expected to take off even faster in Europe and Japan, where high-speed networks are already being put in place.
The three firms are extending their existing relationships to work on high-speed wireless applications trials, they said today. Microsoft and BT are already working together on trials for corporate and consumer applications on existing networks, while BT and AT&T have been working on worldwide mobile communications under their Advance alliance.
These types of applications will be widely available within the next two years, according to Alan Mosher, a wireless analyst with Probe Research. The Enhanced Data rates for GSM Evolution (EDGE network), which AT&T uses, is capable of transmission speeds of up to 384 kbps, he said.
"At that rate, you can do things like streaming audio, streaming video; you could download music to the handset," he said. "Also, you're always connected as long as you have coverage. It's like a DSL connection, which facilitates more services like instant messaging."
Today's announcement should help further Microsoft's efforts to increase the audience for Mobile Explorer, the company's microbrowser technology for smart phones. Although Microsoft is a member of the Wireless Applications Protocol (WAP) Forum, Mobile Explorer competes directly with WAP because it is also a means of viewing Web content on small display devices such as smart phones.
Mobile Explorer reads HTML Web pages, which means Web developers do not have to create specific versions of their sites for WAP-enabled cell phones, Mosher said. WAP is a way of accessing content, such as information from a Web page, over a wireless connection.
WAP is more helpful for current, slower networks because it is effective at translating graphics-heavy Web content into text for narrowband connections, he added.
The number of WAP-enabled Web sites has jumped from several hundred a few months ago to more than 50,000 sites, Mosher said. But creating a site specifically for these smart phones adds about 10 percent to 15 percent in costs, he said, noting that HTML readers for these devices saves developers time and money.
"The advantage of HTML over WAP is that virtually all the wired Web sites in the world are written in HTML," he said. "The WAP side of the market has turned upward. But the whole thing with HTML is that increases the amount of content available."