A war in wireless software is about to begin

Today, Nokia Corporation (NYSE: NOK) and Vodafone Group (NYSE: VOD) announced their collaboration on the development of S60 software on Symbian OS, with the release of the first Vodafone specific software package to all S60 licensees.

Yesterday, Comverse Technology Inc (OTC: CMVT) announced the expansion of its Converged Messaging portfolio with the launch of Comverse Instant SMS, which combines the worlds of SMS and Mobile Instant Messaging, or MIM.

Additionally, Openwave Systems Inc (NASDAQ: OPWV) is launching a whole line of new products.

2007 and 2008 will be the battle between handsets and smartphones, those with the best software will win out. Wireless service providers have been slow to bring PC functionality to handset devices for fear of losing control of the handset. In the PC business, Microsoft Corporation (NASDAQ: MSFT) and Intel Corporation (NASDAQ: INTC) make all the money, with little left over for anyone else.

This means industry consolidation in the wireless software market is about to begin. Look for everyone to start making wireless software acquisitions, either acquiring or partnering, with Openwave, Comverse and Symbian. Also look for the big software companies like Microsoft and Sun Microsystems Inc (NASDAQ: SUNW), with its Java platform, to get into the M&A spirit.