House now burning down? Do A Google Search.

There’s nothing quite like being in an emergency situation and not knowing exactly which number to call. I know — I’ve been there recently, and it was terrifying and mind-opening. In a world filled with smartphones capable of holding 80 billion numbers and where any restaurant’s phone number is a Googling away, gone are the days where every house has emergency numbers on the fridge and a copy of the Yellow Pages in the pantry.

Google’s realized this (probably from the spike in searches for “OH GOD MY HOUSE IS ON FIRE”), and has taken steps to shave a few precious seconds off the emergency-number-getting process. When you search for emergency terms (like “poison control”, or “police department”) on Google from your mobile, it’ll now spit out a Click-To-Call phone number as the first result. If your handset’s browser has GPS functionality, it’ll even localize the number automatically (that’s great for if you’re traveling and don’t know the local equivalent to 911.)

Just don’t Click-to-call accidentally. As it turns out, the poison control ladies don’t like when you call just to say “Hi!”

Immersion releasing SDK to put haptics in Android, helps smartphones move what their makers gave them

About a month ago, we told you about Immersion's MOTIV dev platform to design Android apps with tactile feedback, and today its release has finally arrived. The SDK comes with predesigned haptic effects, sample code, and the ability to tweak the duration and intensity of the feedback -- allowing developers to perfectly tailor the amount of shake in your groove thang. Interested parties can hit up the source link for the SDK download and start indulging in the haptic dark arts immediately. 

Nielsen: Apple, RIM Are Now Beating Android OEMs In The U.S. Smartphone Race

Google’s Android OS is leading the pack for smartphone market share in the U.S., but when it comes to the largest smartphone manufacturer, RIM (NSDQ: RIMM) and Apple (NSDQ: AAPL) are neck-in-neck for the top position. Table after the jump.

The data, which comes from Nielsen and covers the period between November 2010 and February 2011, indicates that Apple and RIM are the biggest single smartphone vendors, at 27 percent each.

Meanwhile, Android devices collectively make up 29 percent of all smartphones in the U.S., making it the most popular OS, but that number is divided up between three main vendors—HTC (12 percent), Motorola (NYSE: MMI) (10 percent) and Samsung (five percent)—plus a selection of smaller shares that get grouped as “others” and account for just two percent of all Android sales. (Those others probably include the likes of LG (SEO: 066570), ZTE, Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) and Huawei).

Microsoft (NSDQ: MSFT), the other player that is deploying its OS across multiple vendors, has, at 10 percent, a far smaller market share than Android, but an equally fragmented number of vendors making devices on the platform.

Here are some takeaways:

—RIM and Apple, being both leaders in OS and in actual handsets sold, are in the stronger position as far as issues of fragmentation are concerned, compared to the likes of the Android and Windows Phone vendors.

—Nokia (NYSE: NOK), with only a two percent share of the market, has a very long way to go before it can claim a strong position, considering that it is partnering with an equally small-market-share OS, in the form of Microsoft’s Windows Phone. If anything, it would seem that partnering both with Google (NSDQ: GOOG) and Microsoft would have been the smart option, if one of Nokia’s biggest goals was to keep itself in the game in the U.S. market (and elsewhere). But that’s not something that has been entirely ruled out by either party.

—So far, HTC has been the most successful in playing the multiple OS game, but at a 19 percent share, it is still quite a ways behind RIM and Apple.

—Other data from Nielsen shows that in terms of age breakdown, all the OS’s are virtually identical, except for in one respect: Android leads by two percentage points as the most popular OS with 16-24 year olds. That points not only to lower prices but also securing key customers for years to come.

Galaxy Indulge microSDHC card regularly reporting back to MetroPCS (but hey, you get Iron Man 2 for free!)

If you're the kind of person who buys phones based on Hollywood tie-in deals (and for your sake, we hope you're not) you'll be pleased to know that the Samsung Galaxy Indulge comes pre-loaded with Iron Man 2. That's right, a sequel to a movie you only ever saw half of, once, while it was on the TV over the bar at Armand's on Liberty Ave. (assuming that you're a certain Engadget editor, and for your sake we hope you're not) is coming pre-loaded on the world's first Android-packing, LTE smartphone. And if that wasn't enough, the SanDisk microSDHC card that the movie is stored on regularly reports back to MetroPCS with usage statistics:

This intelligent SanDisk mobile memory card provides specific, real-time network data to MetroPCS to measure customer interest in digital content. Details of aggregated, anonymous consumer usage will allow MetroPCS to determine the impact of its movie offering, which in turn allows them to provide customers with more customized content and services in the future.

We're sure everything is on the up-and-up here, but for some reason we don't think most consumers will be comfortable with storage that reports regularly to a carrier -- for any reason. Still, things could be much worse: you could be stuck with the pre-loaded Iron Man app on an LG Ally.

Gartner: PC Growth Now Slowing Amid Shift to Phones and Tablets

Smartphones and tablets will take their toll on PC vendors in 2011, slowing growth rates as people choose lighter-weight mobile devices, according to Gartner.

The analyst firm cut its expectations for PC growth in 2011 Thursday, reducing its earlier prediction of 15.9 percent growth to just 10.5 percent growth for the year, or an estimated 388 million PC shipments. It cited increasing consumer demand for alternatives to notebook PCs such as tablets, phones, and other devices that weigh less, can last for a workday on a single battery charge, and increasingly allow users to do almost all the same things online they can do from a PC.

“We expect growing consumer enthusiasm for mobile PC alternatives, such as the iPad and other media tablets, to dramatically slow home mobile PC sales, especially in mature markets,” said George Shiffler, research director at Gartner,in a press release. “We once thought that mobile PC growth would continue to be sustained by consumers buying second and third mobile PCs as personal devices. However, we now believe that consumers are not only likely to forgo additional mobile PC buys but are also likely to extend the lifetimes of the mobile PCs they retain as they adopt media tablets and other mobile PC alternatives as their primary mobile device.”

More specifically, Gartner is starting to notice that consumers are taking a “wait-and-see” approach toward notebook PCs in 2011 as they evaluate whether or not new tablets—like Motorola’s Xoom and Apple’s iPad 2—are compelling enough to forgo upgrading their notebooks. This is more pronounced in mature markets such as the U.S. and Western Europe, Gartner said, and hasn’t impacted the professional PC market to quite the same degree just yet.

But that could change as tablets grow more sophisticated and cheaper to acquire, and a slew of new models are expected to arrive this year. Meanwhile, smartphone sales are still quite strong.

“Not too long ago, PCs were a “fashion accessory” in mature markets with vendors linking themselves to fashion designers and even creating PCs specifically for women. The current ‘cool’ device is the smartphone, and now PCs will soon have to do battle with media tablets when they are launched in large numbers in the second quarter of 2011,” Gartner wrote in the report.

Fogale Nanotech taking the 'touch' out of 'touchscreen smartphone' at CeBIT

French sensor manufacturer Fogale Nanotech -- historically more of an industrial supplier than a consumer-facing one -- was demonstrating its non-contact capacitive sensors at CeBIT this week and how they might be used for the most consumer-facing application of them all: smartphone interfaces. Fogale had two stations set up, PCs running Windows Phone 7 emulators with the sensors attached out front (oriented like you might place a trackpad on a desk). Though they didn't have any actual phone prototypes on hand with the technology integrated, it's clear that they're trying to drum up support with a manufacturer partner or two; in the meantime, you can get a sense of what's going on by waving your hand over the phone-shaped sensors at the stations. We found that as long as you're within about half inch of the pad, the on-screen cursor flys by in perfect harmony with your finger. Of course, there are plenty of unanswered questions here: deciding on the best user experience for actuating taps is key... but perhaps more importantly, we're not certain that you need your hand waving slightly above your phone while using it anyway. Don't get us wrong, it's super cool -- but are you really that worked up over smudges? Follow the break for a quick video of Fogale's recorded demos plus some time at the live kiosk.

Fogale Nanotech takes the 'touch' out of 'touchscreen smartphone' at CeBIT

Trends Showing Android Gaining Among The Young And Vivacious

This little study by Nielson doesn’t actually say “vivacious,” but it’s implied — right there in the headline. The study is just an exercise in statistics and a look at the smartphone market, but it’s always worth taking a look and speculating based on the big bottom-line numbers like total market share.

These two attractive charts detail the distribution of OSes and manufacturers among smartphone owners, which, it should be noted, make up only about 25% (Update: Nielson actually says 34%, comScore says lower, around 27%, my estimate was low) of the mobile-using population, in the US at least. The information is through January of this year, so it’s quite current. So who’s winning? Everybody, it looks like. It really is a dead heat at the moment, but like Jell-O, there’s always room for analysis.

As always, Apple and RIM have a major inertial advantage in being both the manufacturer and OS provider. They have absolute control and consumers trust that. On the other hand, they are unable to cast off their skin and rebrand at will, as Motorola and HTC have done. This stolidity and inflexibility means that their brand doesn’t apply as much to the younger generation, and although the stats right now show only a very modest lead in the 18-24 demographic, it’s significant in that Android-related brands are not showing a weakness among the young.

We all know that Android has nowhere to go but up, considering that it has only barely begun to crack the feature phone market, which Apple and RIM aren’t really capable of attacking without damaging their brand. When Android starts to crack the “my first phone” barrier (perhaps with a simplifying skin cooked up by the likes of LG or Samsung), i.e. the pre-18 demographic, you better believe that age gap is going to widen.

On the other hand, it’s clearly a struggle for Android handset manufacturers to maintain their share, since they’re battling on multiple fronts. It’s fair to say that right now they’re fighting over scraps, dividing between them an equivalent share of the market as is owned solely by Apple or RIM, but establishing a pecking order early on means that once that share starts to grow, eventually a portion of the Android market may outsize the totality of the iOS market. That’s a long ways out, though, and one must never underestimate the competition. After all, the iPad is acting as a bulwark and gateway gadget, and of course Apple computers are far more popular in that young demographic, so it’s still anybody’s game.

These minor differences will grow, though, and while it’s a battle of inches right now, it’s still early in the race, if indeed the race can be said to have an end at all.

Sony Ericsson wooing developers ahead of Xperia Play launch

Sony Ericsson is doing its best to attract developers who can create games tailor-made for its upcoming Xperia Play smartphone, working with third-party tool makers to simplify the development process.

The Android 2.3-based Xperia Play comes with a 4-inch touchscreen and slide-out PlayStation controls, including four navigation buttons to the left and “X,” square, circle and triangle buttons to the right. In the middle, the smartphone has a touch pad.

“It is probably the best gaming phone available on the market … but the content will be key, as with any other smartphone, and in this case content is the games,” said Francisco Jeronimo, research manager for European Mobile Devices at IDC.

To get games, Sony Ericsson will have to attract game developers, large and small. This week, the company is attending the Game Developers Conference in San Francisco to show off the Xperia Play.

To make life easier for developers, Sony Ericsson is working with third-party tool developers. On Tuesday, Havoc announced that the company has optimized its developer tools for the smartphone. Also on Tuesday, Unity announced it has started shipping an Android version of its developer tool, which comes with integrated support for the Xperia Play.

Bogdan Iliesiu from Angry Mob Games detailed the work that went into optimizing its Guerilla Bob game for the Xperia Play, in a post on Sony Ericsson’s developer blog on Monday. The work included adding support for its physical buttons and touch pad, navigation for the game menus, on-screen control tutorials and optimizing the graphics.

The porting was done using Unity, and took about one week, Iliesiu said via e-mail.

From a developer point of view, Sony Ericsson is doing a great job on the Xperia Play so far, according to Iliesiu. The hard part will be to educate users, so they don’t expect all the premium games will be free or cost around 99 cents, he said.

To help secure tailored games for the Xperia Play, Sony Ericsson has also partnered with a number of larger gaming studios. Electronic Arts is developing The Sims 3 and FIFA 10 for the smartphone. GLU Mobile and Activision are adding Guitar Hero, while titles from Gameloft will include Assassin’s Creed and Splinter Cell.

Also, the Xperia Play is the first PlayStation Certified phone, which means users will be able to play some games from the first PlayStation.

More than 50 gaming titles will be available when the Xperia Play launches. The phone will start shipping in March, according to Sony Ericsson.

MobileNotifier Does iOS Notifications Truly Right, Will Make You Want To Jailbreak

iOS’ Notifications system sucks. A lot. In the Great Smartphone War, it’s probably the platform’s most inexplicable Achille’s heel. Oh, you’re playing a game? Sorry, Bobby texted you again! PAUSED! Watching a movie? Sorry, the battery is at 10%! PAUSED!

Peter Hajas’ MobileNotifier, demoed above, shows us that things don’t have to be this way. Dismissible, nonintrusive notifications? An easily accessible notifications tray? Be still, my heart. The catch: as with anything that modifies the deeper system files, you’ll need to jailbreak to get this working.

Our fingers are crossed that Apple will finally be addressing this in iOS 5 — meanwhile, consider us jailbroken.

About Motorola: all our high-end smartphones will have Webtop from June onwards

You know how Motorola's Atrix is unique in having all these docking stations and a Webtop app that collectively turn it into a far more versatile computer than your average superpowered smartphone? Well, Sanjay Jha has just told investors at a Morgan Stanley shindig that the Atrix won't be unique for long -- the Webtop app will be making an appearance on all of Moto's "high performance" smartphones in the second half of this year, and we're told that the only reason the Droid Bionic won't be shipping with it was the simple constraint of time. What that implies, but something Jha didn't say, is that the Bionic and Moto's other forthcoming devices are likely to have laptop docks of their own -- hopefully with a connector that makes the docking accessory interchangeable between models.

Microsoft Increasing The Senseless Limit On How Many Free Apps A Developer Can Submit

So, let’s say you’re Microsoft. You’ve got this brand new smartphone platform — one that, thanks to the timing and that of the competition, is a bit of an underdog. To be at all competitive, you need to convince developers to not only make applications for your platform, but to make lots of applications for your platform. Now, what’s the one thing you definitely, absolutely, should not do? Limit those that are actually interested in your platform — say, by setting some arbitrarily low limit on the number of apps they can submit.

Alas, that’s exactly what Microsoft did. Up until this morning, Microsoft had limited developers to a maximum of 5 free applications. If they wanted to throw any more on the market, they’d either have to charge for the app or cough up $20 bucks for the submission. (Really? Charging the developer for submitting a free app, on top of the $99 yearly fee? Really?!) This cap is now set at a considerably more reasonable level of 100 apps.

I understand why they did this. They didn’t want a mountain of crapware filling their store — a totally reasonable desire. But this was probably the silliest possible way they could have gone about it. Deal with crapware developers individually, don’t just throw a wet blanket on everyone.

NEC Medias: Docomo Offerring The World’s Thinnest Smartphone In 3 Weeks

On Monday, we’ve just shown you some leaked pictures, but we can now confirm the “world’s thinnest smartphone”, NEC Casio Mobile’s MEDIAS N-04C, is real. And provider NTT Docomo, Japan’s biggest mobile carrier, doesn’t want to lose time in bringing it to market: it will hit stores over here as early as March 15.

As reported, the Medias measures just 7.7mm, which makes it the slimmest 3G smartphone out there (the Galaxy S II is 8.49mm thick).

At 105g, it’s pretty light, too (the iPhone 4 weighs 137g), especially when you consider what the device packs:

• 4-inch LCD touchscreen with 480 x 854 resolution
• Gorilla Glass
• Android 2.2 (2.3 update in summer this year)
• 5.1MP CMOS camera
• i-mode compatibilty
• 1Seg digital TV tuner
• e-wallet function
• 3G/GSM roaming
• microSDHC card slot
• GPS
• Bluetooth Version 2.1+ EDR
• Wi-Fi
• HSUPA
• infrared communication

Docomo plans to offer the Media in black and white. No word yet from NEC Casio Mobile if this beauty will be available outside Japan, too, at some point.

Update:
Here is a good video shot at Docomo’s press conference today:

Orange, T-Mobile JV Now Losing Customers; France Tel Says 2011 Outlook Stable

When France Telecom’s Orange and Deutsche Telekom’s T-Mobile merged forces to become Everything Everywhere in the UK, the promise was for scale and the cost benefits that come with that. The formula must be working for the companies—two weeks ago they announced they wouldextend the collaboration into other markets. But the brand looks like it has yet to resonate with customers in the UK, judging by today’s earnings results from France Telecom.

Overall, Everything Everywhere lost 191,000 customers in Q4 2010 compared to the same quarter a year ago. Within that figure, it gained 974,000 contract customers (which tend to be higher value and more loyal in the longer term), but lost over one million prepay customers in the process. It also lost 126,000 customers in its small broadband operation, bring the current total to 770,000 subscribers.

Smartphones are on the rise at the operator. They now account for 82 percent of all contract-based connections, a huge increase on the 50 percent figure for same quarter a year ago.

Everything Everywhere was the first operator to launch subsidised iPads in the UK, bundling a reduced-price tablet with two-year data subscriptions. The offer was launched just before the holiday shopping season, and the company expected huge take up, but this reportedly never materialized. The company did not reveal any sales figures in the current results.

Yet while the rest of France Telecom (NYSE: FTE) and the rest of the mobile world is seeing a boom in mobile data use, Everything Everywhere’s operation says that non-voice percent of ARPUs actually declined slightly, down 0.3 percent to 26.2 percent.

Overall, France Telecom’s revenues were up by about 1.5 percent to €45.5 billion ($62.7 billion). Net income was €4.9 billion ($6.7 billion) in 2010, an increase of 28 percent.

In its home market, France Telecom says that mobile data represented 31 percent of total mobile revenues in 2010, versus to 26.4 percent in 2009. That was partly driven by the huge boost in smartphone and dongle usage on the network. The number of 3G broadband customers was up by a massive 23.5 percent compared to 2009, to 9.4 billion.

It said that revenues in France were up by 0.8 percent for the year, with mobile services, data services and handset sales driving growth. But it also faced tough competition which resulted in lowered prices and reduced margins, down by 1.6 percent to 37.8 percent for the year (with a company-wide margin decline of 0.9 percent to 34.4 percent.) The company currently has a 36 percent share of the France’s broadband market and a 46.6 percent share of its mobile market.

But price competition doesn’t look like it will go away any time soon, so France Telecom is also trying to take a different approach by focussing on services over the network to boost revenues longer term. The company has been offering music bundles with Deezer, and plans to do the same with video bundles from Dailymotion—it took an $80 million, 49 percent stake in Dailymotion last month and also has a minority stake in Deezer.

Mini Fuel Cell Specifically Has Been Designed For Smartphones

Fuel cells are still on their way into the mainstream, but we’re getting there, slowly. Case in point: the AF-M3000 [JP], a mini fuel cell that just requires users to add water to get it to work. What’s interesting is that Kyoto-based Aquafairy has developed the device specifically for use with smartphones.

Samsung preping smartphone memory with 8X wider bandwidth

Samsung late Sunday said it had developed a new type of mobile memory with ultra-wide bandwidth for smartphones and tablets. The LPDDR2 (Low Power Double Data Rate 2) RAM increases the bandwidth simply by increasing the number of pins on the chip 16 times larger from 32 to 512. The effect gives it eight times higher memory performance compared to regular mobile DDR memory, from just 1.6GB per second to 12.8GB, and is still four times wider than everyday LPDDR2.

Even with the greater headroom, the improvement will have reduced the power consumption by 87 percent, Samsung said.

The advancement will first come in a one-gigabit (128MB) chip made on a 50 nanometer process. Samsung hasn't said how soon this will ship, but its long-term plans will see a 20 nanometer, four-gigabit (512MB) version of the same wide bandwidth technology arriving sometime in 2013. Traditional memory modules are already being made in 30 nanometer methods and suggest Samsung could have the new memory ready quickly.

Customers likewise haven't been named apart from Samsung itself, although Apple is one of the largest single customers of mobile memory for the iPad, iPhone and iPod.

Review: iPhone-optimized Notepads

Japanese stationery company King Jim is offering printed notepads [JP] specifically aimed atiPhone owners. The idea here is to make it easier to digitize, store and organize handwritten text for smartphone users, a concept King Jim calls “Shot Note”.

Just5 CP11 Review

We bumped into Just5 at MWC 2011 and while its handsets aren't even remotely in the smartphone world, its "Cingular" and simplistic approach to mobile devices and security is still kinda neat. So it is all in the name here, Just5 refers to precisely that: these sets have only 5 features. Included are a loud speaker, a radio, S.O.S. emergency button, thermometer -- we've no idea why -- and a flashlight. The set itself has impressive build quality that is in contrast with the really low-end pricing and our favorite bit, a novel screen that pops open stiletto-style when the two buttons on the sides of the phone are pushed. The S.O.S. feature is actually interesting: pushing and holding it results in text messages being sent to 5 pre-defined numbers and the handset then starts calling those 5 numbers until somebody picks up. Just5 is targeting this set at young folks, and of course anybody else interested in a no-nonsense handset -- including the elderly. The Just5 sets are available in Europe, and are on the way to the US as you read this. Video tour and a plump gallery follows.

Microsoft's Aaron Woodman talks about Windows Phone 7 and Nokia

We sat down for a few minutes with Aaron Woodman -- director of Microsoft's mobile communication business -- here at Mobile World Congress this week to talk about the past, present, and future of the Windows Phone platform. Of course, it was at this very event a year ago when Redmond first unveiled its next-gen smartphone play, so this marks a great opportunity to circle back and see where the company has been -- and naturally, the Nokia news casts a bright new light on the platform. Read on for the full interview! 

Chris Ziegler: I wanted to talk a little bit about this issue of scale, because Stephen mentioned that a little bit the other night -- the fact that they bring so much scale to your platform that you have not had in the past. But that's interesting on a number of levels, because Samsung does have scale, right? Samsung has a lot of scale.

Aaron Woodman: Sure.

CZ: So I'm wondering first of all, what does this mean for the level of commitment that you're seeing from other OEMs, and what does it mean for the future of their levels of commitment? Because, you know, I'm thinking about it, and I'm sure that the way it's being spun is not this way, but it seems to me that if I were Samsung or HTC and all of a sudden I was selling phones that were infused with Nokia services, I would be really uncomfortable, right? So what's your take on that?

AW: Well, there's a couple of questions there. How important is scale, just generally -- and the second question is, I guess, does that scale that Nokia provides impact your current relationships for your OEMs. And then ultimately, the services and those types of things that they do provide that might be enabled by Nokia-based assets like Navteq. So is that fair?

CZ: Yeah, absolutely.

AW: So for me, I'll answer the first question -- scale is super critical. You know, in this business, it's one of the reasons that I think makes it so attractive to Microsoft. The requirement to compete in mobile phones today is enormous. The amount of assets, the amount of R&D you have to do, the competitive nature of the product features and functionality, the roadmaps people get, what consumers expect are incredibly high. And that actually makes it one of those businesses where very few people can compete. You know, it's not like you can come out of the woodwork and actually compete in this space -- I think it just requires too much in order to do that. So that's what makes it attractive, it's one of the things that ultimately... it's why Microsoft's in the business, and Nokia really helps us accelerate scale. And it's partially because of their commitment -- their desire to really make a bet and take the best of their innovation and apply it against the Windows Phone space. And I think that along with their natural market momentum will be very positive for Windows Phone.

I also think, when I think about how that impacts our other relationships... you know, I can't speak for Samsung, but what I can tell you is that Samsung wants to sell phones. And when I think about in today's market what's required to sell phones -- things like great services, or even apps -- if you just say "apps" as a basic category requirement today, the one thing that's going to pull, or like create a vacuum in for apps is scale. If you ask an ISV, they don't have any single passion about a platform, they have a passion to find customers. And that's what makes it so appealing. And so one of the benefits that everyone will get from the ecosystem is when you apply scale to the ecosystem, everyone that needs scale to create market opportunity will benefit once that's achieved. And so Samsung will have more apps on their phone because of scale Nokia provides. I think that's beneficial.

I also think that if you asked... you know, if you took one of the other ecosystems like Apple, which is a very exclusive ecosystem -- no one can make hardware. If someone approached another OEM like, say, Samsung or HTC or Motorola or whoever and said, "hey, we're open -- if you want to make an iPhone, go ahead," my bet is they would do it. And they would do it primarily because consumers have demand. And Samsung is an amazing company. I don't think they're shy to compete with Nokia -- they do it today. Alright? I don't think they're shy to compete with Apple on hardware design, they're an incredible company. So I don't think this shifts the boat in terms of their competitive buoyancy.

So I don't know how those relationships will work out, but we have a very good working relationship on both an engineering side and a marketing side with each of those OEMs, and I expect that to continue. And I really do expect them not in a hand-raising position, I think scale will benefit.

CZ: And just to make it crystal clear -- I don't think that anyone has really, at least in none of the answers I've heard this week, there haven't really been any head-on answers to this question -- there will be no preferential treatment given to Nokia in terms of the level of customization that they can apply to their devices. Is that correct, or no?

AW: So it's an interesting question -- you say, like, preferential treatment, so say more about that. Is that like oh, they can modify...

CZ: They can do more. They can do more than Samsung or HTC, for example.

AW: I don't think we know, to be honest. This is where, at the end of the day, there are some principles we believe in in the platform. You know, things like we don't want to fragment the platform. We believe that we have to be whole. We believe performance and quality have to be high, so we've done things like chassis strategies and really been specific about the spec. One of the things is that working so closely with Nokia against their innovation and our innovation roadmaps gives us an opportunity to line those up in a much more aggressive fashion.

And so, could we support new things that we don't support today because Nokia has some opportunity to push in a unique way? Yeah, you know, it's not clear whether we make that available to other OEMs in that case. I just don't think we're at a point where that's known. So I don't think it's a question of, like, you know, we're trying to spin ourselves out of it. I think it's, hey, we've been working on this deal for several months, we've agreed on a principle level where we think our business objectives are in alignment, that the complimentary nature of our skill sets and expertise is very, very high. Like, you look at Navteq. We have worldwide services. A place where we're weak worldwide is maps. We have an incredible -- we both have incredible brands, but not in competing ways. It's not like, people are like, where's that Microsoft phone?

But in terms of customization, how that plays out, I think it's really unclear. We actually allow for customizations today that are exclusives to each of our OEMs. Like we worked closely with LG on their DLNA application that's only available on an LG. So it's kind of unfair to say we don't do customizations with each of the OEMs to help them differentiate through software. And then the question is what we do with Nokia and if that's a build or not, I just don't think it's known.

CZ: Okay. So, just to phrase it a slightly different way -- and I might get the same answer -- but to take it in a different direction, would it be conceivable that you would offer specific chassis or versions of Windows Phone 7 designed to run on particular chassis only to certain OEMs, whether that be Nokia or someone else?

AW: Yeah, you know, I don't know. So you're saying, like, would we do something specific at a hardware level. Let's say, I don't know, a different aspect ratio or something?

CZ: Sure.

AW: Yeah, I don't know. I think that we're motivated to sell a lot of phones, I think Nokia is, I think all of our partners are. We have conversations on an ongoing basis about how do we make the chassis specs and strategy both meet our principles around what we care about consumers and help maximize both their ability to be differentiated as well as reach customers through price points. So it's an ongoing discussion. And so I don't know. I don't know if one of the things we would do with them or not would be, hey, I get access to this specific chassis feature. I don't think we know.

CZ: Okay. And one of the reasons I'm so interested in that is that, you know, I think Nokia was on the verge of making a real breakthrough with just how low they were able to push their bottom-end specs on Symbian devices and really commoditize the smartphone in a way it hasn't been commoditized yet. And with Symbian going away, the question becomes, are they going to lose that opportunity? And as Windows Phone stands today, the answer is yes.

AW: Hmm... it's not...

CZ: I mean, as it stands today, Snapdragon... with that one chassis.

First of all, S40 isn't going away any time soon... it's a great product.

AW: Yeah, so here's what I would say. First of all, S40 isn't going away any time soon. They're going to continue to make... it's a great product. So like, that's really where they're hitting those price points more than anything else. So you say, how many years will that continue? Well, I think a lot of that will be determined by the flexibility and changes and ultimately the cost curve that you see against hardware.

You know, one of the benefits of selling a lot of phones is you can also maximize your supply side value chain. You know, you can put pressure on suppliers that are actually providing chips and memory and those types of things. And it's in their best interest because overall they're going to make more money because of the volume. And so Nokia gives us that opportunity to apply pressure against supply chains -- specifically their supply chains -- in a way that we expect to have more flexibility in terms of price points. And we'll continue to work with them to help them do that. I think, you know, at the end of the day, we have the desire to make a really, really cheap phone that meets our quality. So, I think from a principle perspective we want to sell great phones at good prices, and Nokia shares that, and then they bring the ability to provide volume and work the supply side economics, and I think that'll be meaningful.

Do I think that tomorrow we'll have a $100 BOM smartphone? No. Do I think we can get there over some period of time? Yeah, you know, I think we can find ways to do that together by maximizing what we're both capable of doing within the ecosystem.

CZ: And price point aside, how much lower -- how much room do you have to reduce the minimum spec in Windows Phone 7? At MIX last year, you first mentioned the lower-res display that would happen at some point, but beyond that, are there any other places where you would definitely be willing to compromise or move down?

The idea is not to stay at this chassis, the idea is to stay at this quality and this experience, and so we're constantly evaluating our ability to do that.

AW: "Compromise" is an interesting statement, you know? We're constantly evaluating different chipsets and different speeds and different memory speeds and those types of things, and I think you'll see us continue to evaluate that. I would be surprised if we had news for that in this year. Not specifically to Nokia to be honest -- just working through OEMs, we haven't really finished taking feedback and taking action on that. The idea is not to stay at this chassis, the idea is to stay at this quality and this experience, and so we're constantly evaluating our ability to do that.

CZ: So that sort of leads into the other end of the spectrum, which is more modern chassis specs?

AW: Modern? Our specs are really high-end specs!

CZ: No, they are, they are. But when you talk about the "three-horse race..."

AW: I love that you've already said that.

CZ: You know, Android is... it might be in danger of burning itself out here. Well, that might be too strong of a statement, but what I mean is that it does feel like it's a pissing contest between manufacturers in some respects.

AW: Yeah.

CZ: And it's obvious that you're not playing that so far.

AW: Yeah.

CZ: And I know that you've mentioned on many occasions in the past that it's more about the experience than the actual line-item specs. But do you see specific areas where you're saying, yeah, you know, it's time to bump that. We can take advantage of this extra horsepower.

AW: Yeah, you know, I think that part of it is around maximizing -- I don't want to overuse the word "experience," but like I'll use the news that we announced today around IE9. Like, today we have a browser that's a pretty good browser based upon a number of facets within the company. But we announced today that we're bringing IE9 directly over, and we're going to leverage the local GPU to actually do some of the hardware acceleration within the browser. That's pretty powerful. We required the GPU though primarily to meet the requirements we had around games. Specifically XNA titles for Xbox Live. So we have those capabilities within the phone, and I think we can continue to maximize the current capabilities to get more production out of them, more performance out of them. So I look first and I say, you know, there are things we could do even today better and faster given the current chassis spec.

So you know, it's not "next year, we need X," it's more of a, "in five years we agree that we're here, in eight years we agree that we're here."

You know, in terms of, hey, what does the world offer in the future and how do we actually start to ingest those things... I don't know how fast we'll actually be against that. That's another area where you look at Nokia as having some much better hardware -- like we have no hardware planning expertise, so we're kind of working through with our partners in terms of what they want to do and Nokia has much more ability I think to have a better long range planning in terms of hardware capabilities and so we can do joint planning. So you know, it's not "next year, we need X," it's more of a, "in five years we agree that we're here, in eight years we agree that we're here." And that's the type of planning you need from a hardware perspective, and I think they'll bring that to the table and I think it'll actually help.