Motorola to make Windows Media phones, keep iTunes

No. 2 handset maker says many operators, wanting to open their own music stores, have asked for the Microsoft-run phones.

Mobile handset manufacturer Motorola has announced that it is integrating Microsoft's digital rights management (DRM) technology into a number of its handsets.

Announced on Monday, the first day of the 3GSM World Congress in Barcelona, the deal will see Motorola add support for Windows DRM, Windows Media Audio, Windows Media Audio Professional, and Media Transfer Protocol (MTP) to a range of its handsets.

The companies claim that when the Motorola handsets are released later this year, customers will be able to connect to Windows-based PCs via USB 2.0 and automatically synchronize the music on their computer with their phone using MTP.

"Our relationship with Microsoft is about making the mobile world seamless with the desktop world and allowing consumers to experience music wherever and whenever they want," said Richard Chin, Motorola's corporate vice-president of global product marketing.

Motorola has been using Microsoft technologies on its some of its handsets since 2005 and plans to offer Windows Media-enabled handsets worldwide in the second half of 2006.

Motorola, which launched its first iTunes phones last year, will keep Windows Media phones as separate products, said Chris White, the company's senior director of global product marketing for music handsets.

"The iTunes phones will remain a separate line of products," White said at the 3GSM World Congress in Barcelona, Spain, the world's biggest mobile-phone trade fair.

At stake is the emerging market for legally distributed digital music, which Apple Computer has opened with its iTunes music player. Apple has sold 1 billion tracks since iTunes launched.

Microsoft is trying to break into the digital-media market with Windows Media software, which is incompatible with Apple's, to compress, transfer and protect media.

Motorola said the new Windows Media phones have been requested by many operators wanting to open their own music stores. Microsoft is willing to sell technology that enables this to operators, while Apple has its iTunes Music Store to protect.

Microsoft now has deals with Nokia and Motorola. Combined, the two handset makers produced more than half of the 810 million mobile phones that were sold last year.

Nokia announced a deal to include Windows Media in some of its phones last year at 3GSM. Nokia has helped set up mobile-phone software firm Symbian, which competes with Windows Mobile, Microsoft's technology for handsets.

In addition to Windows Media, the Nokia phones will also contain an open standard for the transfer and protection of songs and video. Motorola said its Windows Media phones may also support this standard from the Open Mobile Alliance, or OMA.

"It's possible that we may support OMA. This is not an exclusive deal," White said.

The OMA standard has suffered, however, from endless haggling over licensing terms in negotiations with key patent holders that have been gridlocked for more than a year.

The patents are owned by a small group of companies, including Sony, Royal Philips Electronics, Intertrust Technologies, ContentGuard and Microsoft.

The development of applications such as Windows DRM, which restrict what a user can do with their digital content, has encouraged media companies to offer material in a digital format. However, some experts claim that DRM is seriously flawed.

Suw Charman, executive director of the Open Rights Group, told MPs earlier this month that: "DRM can't distinguish between lawful and unlawful behavior, and it contains all the information needed to crack it. It just takes one person to crack a DRM technology and it is obsolete."

At 3GSM, which is the mobile industry's biggest event and is expected to attract 40,000 attendees, Microsoft also announced that it has acquired mobile search specialist MotionBridge.

Based in Paris, the company of around 50 employees specializes in search technology for mobile operators. This includes providing customers with customized results and deep links to downloadable content from multiple sites.

Microsoft also promised it will continue to support MotionBridge's current operator partners such as Orange, Sprint and O2.

Andrew Donoghue of ZDNet UK reported from Barcelona. Reuters news service contributed to this report.