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Ballmer makes nice with mobile operators

Microsoft's CEO tells a 3GSM audience that the software giant will help them introduce new services to mobile customers.

During his first-ever keynote address at Europe's biggest mobile phone trade show, Microsoft Chief Executive Steve Ballmer emphasized the importance of partnerships between his company and the mobile industry.

During his speech Tuesday at the 3GSM World Congress in Barcelona, Ballmer said that Microsoft is committed to helping mobile operators build new businesses and service models around delivering new services to mobile devices. He tried to allay fears that Microsoft's aggressive moves in the market are threatening.

"I hear a lot from mobile operators, 'Are you our friends or foes?'" he said. "If you take only one message away today, it's that we come as friends."

In particular he emphasized the need to form strong ties with cell phone companies, which are in the midst of transforming their businesses from selling voice services to offering all kinds of multimedia content such as music and live television.

"We have learned as we've invested in the mobile business is how important it is to have partnerships--in particular, having the right partnership with mobile operators," he said.

Ballmer also sees low prices in the near future for smart phones--that is, computerlike handsets that run applications such as e-mail, games and mobile TV--running the company's Windows Media software.

"We will get smart phones at consumer-style prices," he said in an interview with the Reuters news agency. "I think it will take a year or two before we get to $100-type offerings (of Windows Mobile devices). I may be wrong, but not by much."

Windows Mobile smart phones sell for between $200 and $300, before operator subsidies.

Microsoft has been courting mobile operators and equipment makers for some time now as it tries to boost its fortunes--and grab some market share from archrivals, such as Nokia. In addition to creating software that makes it easier for device makers and wireless carriers to develop new services, it has also been extending many of its PC-based applications, such as e-mail and instant messaging, into the mobile world.

"I don't care where you are in the world or in what stage of life you're in, people accept the PC and the phone as fundamental sources of information," Ballmer said. "And they expect us and everyone in the audience to serve them totally electronically."

Just this week, the company announced several new products and capabilities. On Sunday, it announced its long-awaited push e-mail capability for mobile devices, putting it head-to-head with market leaders such as Good Technology and BlackBerry service provider Research In Motion. It also announced that it is extending its corporate IM capabilities to work on mobile devices.

Ballmer dismissed claims from RIM CEO Jim Balsillie on Monday that RIM has a more versatile wireless e-mail service, helping to push more kinds of e-mail to a wider range of devices from more vendors.

"There are not a whole bunch of devices that support BlackBerry. There are many more devices with Windows Mobile than with RIM stuff." Ballmer told Reuters. "And frankly, the RIM devices are not the strength of the RIM experience."

During the keynote Tuesday, Ballmer officially announced that Microsoft is teaming up with the British Telecom Group and Virgin Mobile to offer consumers digital TV on their cell phones in the United Kingdom. Microsoft's technology will be used as the operating system for the new Virgin Mobile phones.

While Ballmer emphasized Microsoft's ability to serve up an end-to-end solution for mobile operators developing new kinds of data services, he also recognized that not all customers want to use every piece of Microsoft technology available to them.

For example, Verizon Wireless's new music service on V Cast uses Microsoft's mobile music player on the phone, but it uses a separate operating system to run the phone. Ballmer also pointed to the company's ActiveSync software, which allows handheld devices that do not use Windows Mobile to still access some Microsoft applications while away from their desktops.

"We're trying to get things to work end-to-end," Ballmer said. "But we also recognize that the world is heterogeneous, and it's important that we embrace that heterogeneity."

Reuters contributed to this story.