UPDATE: Microsoft and AT&T form wireless alliance

Microsoft Corp. and AT&T Wireless today announced a partnership which they say is designed to keep North American mobile professionals and companies connected.

Together the companies have developed and will offer to customers products for Microsoft Windows-powered Pocket PCs, laptops and Smartphones. According to a press release issued by the companies, these offerings are designed to enable seamless, wireless access to applications and information located behind corporate firewalls.

Also announced: AT&T will be the first wireless carrier to offer enterprise-grade Microsoft .NET location-based services on Pocket PCs and laptops through MapPoint .NET mapping and location services and the .NET Compact Framework. The companies will collaborate on sales and account planning, marketing and solution development.

The companies said that the alliance has been in the works for months, and customer trials are underway presently. They expect to launch the first set of services in the fourth quarter of the year. The Pocket PC Phone Edition devices will be equipped with integrated GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) voice and data-calling capabilities. The companies are also developing a voice-enabled PDA powered by Microsoft’s Pocket PC Phone Edition software that will also be available in the fourth quarter.

Given Microsoft’s history with release deadlines, Albert Daoust, handheld computing analyst for Toronto-based Evans Research Corp., thinks an actual product launch this year is doubtful. However, since Rogers AT&T Wireless has shown a strong commitment to handheld devices in Canada, Daoust believes they will adopt the technology as soon as they can.

“Rogers AT&T likes to be on the leading edge. For this next generation high-bandwidth network they’ve got 85 per cent coverage as opposed to (AT&T’s) 60 per cent south of the border. And although they started marketing to their cable subscribers, they want something snazzy for businesses to try and increase their presence in a business market which is still mostly Bell Mobility,” Daoust said.

Although it’s still too early to know if there really is a demand for triple function devices that combine e-mail, some handheld computing and a cell phone, Daoust said “the carriers will offer anything that will help them take subscribers away from their competitors and slow the churn of their own (customer) base. They are also looking for a device that chews up minutes … and all the manufactures want to work with them.”

While Microsoft has been known to bungle releases, Daoust noted that the company has a history as a relentless pursuer of attractive markets. Microsoft’s ultimate level of interest, he said, largely depends on companies like RIM and Palm creating an enterprise market for triple function devices.

“Microsoft has anted into the pot and whether they fold or go to the next round is going to depend on how well the Palm camp does. They’ll ante in for $5 and if they really want it they’ll raise it $1,000,” Daoust said.