Verizon Wireless Said to Be Aiming to Release Microsoft Phones

Verizon Wireless, the largest U.S. wireless carrier, will introduce two phones from Microsoft Corp. in about May or June that are targeted at teenagers, two people with knowledge of the companies’ plans said.

The models will have easy access to social-networking sites and include keyboards for text messaging, according to one of the people, who asked not to be identified because the plans aren’t public. The phones will be made by Sharp Corp. and carry the Microsoft and Verizon Wireless brands, the other person said.

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Until now, Microsoft has focused on providing its mobile Windows software to phone makers, rather than offering a model under its own brand. The move would parallel Google Inc.’s decision to sell the Nexus One phone, which uses that company’s Android operating system. Microsoft is seeking to recapture a larger share of the phone market after Android and Apple Inc.’s iPhone lured away customers from Windows.

By moving directly into wireless phones, Microsoft and Google could risk hurting their relationships with other manufacturers and service providers. Microsoft will continue to work closely with handset companies that make Windows phones and the mobile carriers that sell them, the person said.

Microsoft executive Robbie Bach, who oversees the mobile- phone business, said in January that it would be “very, very difficult” for Google to sell its own phone while keeping manufacturers and carriers for other Android handsets happy.

Different Tack

With its phone, Microsoft will take a different tack than Google, said the person familiar with the matter. While the Nexus One is only available from Google, Microsoft’s phone will be sold by Verizon, the person said. The phone stemmed from a Microsoft project code-named “Pink.”

Brenda Raney, a spokeswoman for Basking Ridge, New Jersey- based Verizon Wireless, declined to comment, as did Jay Cudal, a spokesman for Microsoft. Chris Loncto, a spokesman for Osaka, Japan-based Sharp, also declined to comment.

Verizon is increasing its lineup of smartphones in a bid to get more revenue from data plans, which customers must buy to access the Internet or download applications. Smartphone shipments will increase 46 percent worldwide this year, research firm Gartner Inc. said. That compares with estimates for total mobile-phone market growth of as much as 13 percent.

Cliq, Sidekick

The phone is intended to address a similar audience as Motorola Inc.’s Cliq or T-Mobile USA Inc.’s Sidekick, one of the people said. In 2008, Microsoft acquired Danger Inc., which makes the software for the Sidekick. The Cliq includes software called Motoblur, which serves up Twitter messages, pictures and contacts to the phone’s home screen.

Microsoft will probably spend more money marketing its new mobile Windows software than the Pink phone, said Matt Rosoff, an analyst at Kirkland, Washington-based Directions on Microsoft. That will smooth over relationships with handset makers and carriers that are Microsoft partners, he said. Microsoft said last month that the software, called Windows Phone 7 Series, will be available in handsets by the holidays.

“They will say, ‘Windows phones is where our investment is going. You should be betting on that,’” Rosoff said. “They did keep a team working on the successor to the Sidekick and that’s what this is. This is a legacy of Microsoft being a big decentralized company doing a lot of things and seeing what wins. It’s not quite the same situation as with Google.”

Touch Screens

Rosoff said the Pink phones won’t run the new Windows software. Windows Phone 7 will offer touch-screen features, letting handsets work more like the iPhone. The software, unveiled at a conference last month, also has a new design and connects with Microsoft’s Xbox Live online games and Zune music service.

Microsoft’s Windows dropped to a 7.9 percent share of the worldwide smartphone software market in the fourth quarter, from 12.5 percent a year earlier, while the iPhone and Android posted gains, according to ABI Research.

The iPhone took 16.6 percent of the market in the fourth quarter, up from 10.8 percent the previous year, Oyster Bay, New York-based ABI said. Android climbed to 8.5 percent from 1.7 percent.

The Wall Street Journal reported last month that the Pink phones would be made by Sharp and go on sale as early as the spring. Technology Web site Gizmodo posted yesterday what it said were photos of one model.

Microsoft rose 17 cents to $28.63 yesterday in Nasdaq Stock Market trading. Verizon Communications Inc., co-owner of Verizon Wireless, gained 14 cents to $29.27 on the New York Stock Exchange.

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