Mobile phone software makers Microsoft and Symbian have upped the ante at the world's largest wireless trade show, claiming new customers and shareholders as operators gear up to bring games and the Internet to handsets.
Microsoft announced today its second European operator to buy a design for its smartphone in Germany's T-Mobile, a unit of Deutsche Telekom, while Britain's Symbian said it had signed up the fifth of the world's top-five phone makers as an investor, South Korea's Samsung Electronics.
The announcements underline the clash emerging at the annual Cannes 3GSM conference as mobile phone hardware makers face a looming competitive threat from Intel, Microsoft and a host of Asian electronics companies.
These firms, formerly in the computing industry, are trying to muscle into new markets as they seek fresh sources of revenue outside the stagnant and saturated PC market.
The conference brings thousands of wireless executives, engineers and marketers to the shores of the Mediterranean for a week of product launches, deal making and hobnobbing.
But rather than gloat over successes in the past decade, with over one billion consumers around the world now using a mobile phone, they fret about growth for the next 10 years.
Due to increasing price pressure on commodity services such as mobile voice, the growth has to come from mobile data services such as games, mobile Internet and a full menu of computer services on the go.
"For the past 100 years we've built phones for the ear. Now we can build phones that connect to the eye," said David Levin, chief executive of Symbian.
The market for these emerging smart devices was still tiny last year, with just 0.5 per cent of the 405 million phones sold worldwide delivering data services such as calendars, email and games.
However, smartphone sales quadrupled last year and will multiply again this year. Microsoft's mobile devices chief, Juha Christensen, estimates that two out of every five phones sold in three years time could be smart devices.
Today's duelling announcements from Microsoft and Symbian suggested the battle over the market's future was shaping up as a bruising fight.
Samsung agreed to buy a five per cent stake in Symbian for 17 million pounds, saying it had witnessed the carnage software maker Microsoft and chip producer Intel had caused in the personal computer industry.
"They took all the value and left hardware makers as clone producers. We don't want a repeat of that situation," San-Jing Park, head of Samsung's mobile phone division, told Reuters on the sidelines of the conference.
Symbian is now jointly owned by the top five handset makers, also including Finland's Nokia, Motorola of the United States, Japanese-Swedish joint venture Sony Ericsson and Germany's Siemens.
However, Park noted Microsoft had a firm grip on the corporate world and mobile carriers, which demand Microsoft-based devices.