Microsoft Invests $600m in Nextel to Bolster Wireless Internet Access

Microsoft, the US software giant, has strengthened its position in the internet wireless access market by investing $600m in Nextel Communications, the US mobile services group. As part of the deal, Microsoft will be setting up a portal, or gateway, to the internet through its MSN internet site, allowing Nextel's 3m customers to access various web-based information, including e-mail, address books, calendar, news, and financial information, directly on their mobile phones. The system will also be compatible with other hand-held devices, such as pagers and portable computers. This move is a significant step for Microsoft in its bid to expand its presence in consumer markets, where it believes the future growth of the internet and e-commerce will take place.

Key Takeaways:

• Microsoft has invested $600m in Nextel Communications to strengthen its position in the internet wireless access market.
• The partnership will enable Nextel's 3m customers to access MSN services, including e-mail, address books, and calendar, directly on their mobile phones.
• The system will also be compatible with other hand-held devices, such as pagers and portable computers.
• Microsoft is actively seeking to bring other wireless carriers on board to promote its wireless strategy.
• The company is positioning its Windows CE operating system as the industry standard in consumer devices, including handheld computers and other wireless products.
• Microsoft will also be launching an access service for its Hotmail e-mail service, allowing its 40m users to access e-mail, use their online address books through their cellphone, and receive news and weather bulletins.
• The venture is seen as a challenge to Symbian, a consortium launched by Motorola, Nokia, Ericsson, and Psion to promote the UK technology group's operating system as the basis for the next generation of smart wireless devices.
• Symbian-backed products are due to be launched this year, but Microsoft and Nextel's wireless MSN portal will be accessible by devices using Microsoft's Pocket Internet Explorer and Windows CE software.

Statistics:

• $600m: Microsoft's investment in Nextel Communications
• 3m: Number of Nextel customers who will have access to MSN services through their mobile phones
• 40m: Number of Hotmail users who will have access to an email service through their cellphone
• $5bn: Microsoft's investment in AT&T to gain stakes in cable companies
• 2 companies: Microsoft and Nextel to collaborate on the wireless MSN portal

Sources:

• Financial Times Limited, 1999
• Microsoft
• Nextel Communications
• AT&T