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Microsoft NASDAQ:MSFT, China Unicom NYSE:CHU form alliance

INTC, QCOM, NOK, SSNLF, AAPL, GOOG

Microsoft Corp announced Thursday a newly forged industry alliance with China Unicom, hoping to rely on the telecom company’s faster 3G network to boost its presence in the Chinese market with its latest operating systems for mobile devices.

A raft of devices including smartphones, tablet PCs and ultrabooks powered by Microsoft’s latest Windows 8 and Windows Phone 8 platforms were also launched at a press conference in Beijing announcing the alliance.

In addition to Microsoft and China Unicom, members of the alliance include a number of handset makers and chip manufacturers such as Samsung PINK:SSNLF, Nokia NYSE:NOK, HTC TW:2498, Intel NASDAQ:INTC and Qualcomm NASDAQ:QCOM.

It marks the first such alliance the software giant has forged with the nation’s telecom operators, as Microsoft uses its latest mobile operating systems to actively compete with the current market leaders, Google’s Android platform in particular.
In Q-3 of this year, smartphones running on Google’s Android NASDAQ:GOOG operating system held 90.1% share of the Chinese market, while Apple’s NASDAQ:AAPL iOS platform held 4.2%, according to figures released in November by Analysys International, a Beijing-based market research firm. In comparison, Windows Phone’s market share is too small to count.

“Microsoft has long had a good relationship with China Unicom, and the alliance further shows its ambition to gain a bigger foothold in the Chinese market by relying on China Unicom’s faster 3G network,” Roger Sheng, research director at consultancy firm Gartner Inc in Shanghai, told the Global Times Thursday.

The software giant is likely to initiate similar cooperation with China’s two other carriers in the future for a firmer market position, Mr. Sheng reckoned.

While sales of the latest Windows systems may gain momentum in Y 2013 with an array of new products entering the market, Mr. Sheng noted the software giant had a long way to go before it could expect to pull even with Android and iOS.

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Linda Johnson,
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Heffernan Capital Management
Sales@Heffcap.com

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