Sendo to ship Microsoft smart phones by year end

Mobile-phone maker Sendo PLC is preparing deals with both European and U.S. mobile phone operators for the launch later this year of its Z100, a combination phone-PDA (personal digital assistant) based on Microsoft Corp.'s Windows Powered Smartphone 2002 platform, the company said last Friday.

The first devices are expected to be on the streets in the second half of this year, said Hugh Brogan, Sendo's chief executive officer, at a news conference here. He declined to name the operators that would offer the handsets, but said the advanced phones "will show up in Spain quite early, as well as in France, the U.K. and possibly Germany." A deal with a "national U.S. operator" will be announced at the CTIA (Cellular Telecommunications & Internet Association) event in Florida next week, he added.

The Sendo Z100 is expected to be the first Microsoft Windows Powered Smartphone 2002-based, mobile-phone and PDA hybrid on the market. South Korea's Samsung Electronics Co. Ltd., the only major mobile-phone maker working on a phone running the Microsoft software, this week said it does not expect to release its handset until the fourth quarter.

Sources close to the company said Sendo will announce a deal with Spanish operator Telefonica Móviles SA, which is displaying the Z100 on its stand here. However, Brogan declined to comment, saying only that several agreements with operators are imminent. Brogan also returned a "no comment" when asked about possible deals with Germany's T-Mobile International AG, France's Orange SA, and U.S.-based VoiceStream Wireless Corp., which have all been named as probable Sendo Z100 partners.

Windows Powered Smartphone 2002, previously known as Stinger, competes with Symbian Ltd.'s and Palm Inc.'s phone software platforms. Sendo, of Birmingham, England, was founded in late 1999. Microsoft last year paid over US$10 million for a stake of less than 10 percent in Sendo.

The Z100 is a GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) device operating on three frequency bands; 900MHz, 1800MHz, and 1900MHz. The handset, weighing 99 grams and measuring 48 x 122 millimeters, sports a 176 x 220 pixel TFT (thin film transistor) screen that can display 65,536 colors. It comes with an unspecified amount of RAM and 32M bytes of flash memory. Processing power for the Microsoft operating system is provided by a Texas Instruments Inc. ARM 9 core-based processor. The standard battery will power the device for 200 hours in standby mode, or two hours of talk time. A Secure Digital (SD) card and a MultiMediaCard (MMC) slot are available for expansion. Street price, including mobile phone operator subsidy, of the Z100 will be about €399 (US$352), Sendo said.

Although Sendo works closely with Microsoft, it does take its own approach to the market. For example, Sendo added support for Java to the Z100. Java is showing up in many new phones and was developed by Microsoft arch rival Sun Microsystems Inc.

"Microsoft is not a supporter of Java, but (mobile phone) operators are asking for it," said Sendo chief executive Brogan. "We always intended to have Java in our product."

Though Microsoft had not included Java support in Windows Powered Smartphone, Sendo's addition of Java Virtual machine to the Z100 will allow the handsets to run Java-based applications, which can be downloaded over the air.

Sendo started shipping mobile phones, not the Z100 model, to many operator customers worldwide in May last year. The company, managed by former Koninklijke Philips Electronics NV executives, sold over 500,000 units in 2001, according to Brogan. The target for this year is to sell "a few million," he said.

One analyst attending the news conference was charmed by Sendo and especially by the Z100.

"I think the Z100 will be a successful phone, provided it has no bugs," said Paolo Mosole, analyst with Italian brokerage firm Intermonte Securities. "Sendo has presented a good and competitive product that I think will drive up the company's market share, they might be underestimating demand."

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