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Microsoft, Google unveil new smartphones

Not to be outdone by last week's news of Apple's upcoming iPad Mini, Microsoft and Google unleashed new mobile devices on Monday in what has becoming an increasingly crowded battle of wireless gadgets.
"It is one of the best, if not the best, hardware you'll find," boasted CEO Steve Ballmer about Microsoft's new line of smartphones, which will go on sale at carrier-dependent prices in November.

Samsung, HTC and Nokia have all partnered with Microsoft to build phones running the new Windows 8. Last week Microsoft released the new version of its flagship operating system and the much-hyped Surface - the company's answer to the iPad, Amazon's Kindle, Samsung's Galaxy Note and Google's Nexus tablets.
Google, which canceled its release event in New York because of Hurricane Sandy, unveiled the new Nexus 4 smartphone (starting at $299) and two tablets, the Nexus 7 ($199) and Nexus 10 ($399), on Monday. All will run the newest version of the Android operating system, affectionately called Jelly Bean, and will go on sale in early November.

Apple's iPhone and iPad are the only mobile devices to run iOS. Google licenses the Android operating system to other third-party device manufacturers. Samsung's Galaxy smartphones and tablets run Android, as do Amazon's Kindle devices.

Once a company has a user on a device running its operating system, it "upsells" the user with applications, music, books and other services. Google does this through the Play Store, Apple through the App Store. Microsoft has now opened the Windows Store. The idea is to entrench users with enough content - most of which doesn't transfer out of the platform - and device-specific software that they remain loyal to that particular ecosystem.

Google also makes money from mobile searches, defaulting to the Google search engine on all Android devices. Microsoft will do the same with its Bing search engine on its new smartphones.

Research analyst Van Baker of Gartner points out that while he believes most consumers will stick to the operating system they know, cell phone carriers should be eager to boost Microsoft's standing in the market, to introduce more competition among operating systems. Microsoft, however, still has a long way to go before becoming the third dominant operating system.

"They don't want Apple and Google controlling all their environments," Baker says. "Microsoft is a strong candidate for that third ecosystem. They're certainly spending enough (advertising) money." Microsoft declined to say what it will spend advertising its new mobile devices.

Though Windows is still the most popular desktop operating system, it is far from a heavy hitter in the mobile device space. Analytics outfit comScore reported the percentage of active smartphones running Windows in the United States declined from 4.0 percent in April to 3.6 percent in July. Conversely, Google's Android grew from 50.8 to 52.2 percent and Apple's iOS from 31.4 to 33.4 percent over the same time period.
Baker adds that onetime smartphone heavyweight Research in Motion could make a comeback and fill the third competitive spot - but he is not confident that will happen. The Canadian company has watched its operating system share drop to just 9.5 percent of the U.S. market.

Google will sidestep cell phone carriers somewhat with the new Nexus by offering it as "unlocked," meaning it isn't specific to a particular carrier. This gives customers the ability to avoid the long contracts most carriers require to access discounts on the devices they sell.

At Microsoft's release event in San Francisco, the company enlisted actress Jessica Alba to tout the new device. Like Ashton Kutcher, Alba is a celebrity with a bit of tech cred - she co-founded the socially conscious e-commerce site the Honest Company.

Alba acknowledged she was an "iPhone convert," and Microsoft used her to placate concerns about music portability, a common question consumers have when switching to a new device. To make the transition between operating systems easier, Microsoft provides a free app for Apple devices that ports music, data and contacts to Microsoft devices.

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