CLARIFICATION: The seventh paragraph of this story, posted Wednesday, referred to Microsoft Corp.'s Exchange 12 software, the name by which the software was known during its development. The story has now been changed to use the name Microsoft gave that same software at its launch, Exchange Server 2007.

The phone many exhibitors and attendees are talking about won't even be on display at next week's 3GSM World Congress in Barcelona, the year's largest mobile industry exhibition.

Software and phone developers are comparing the products they'll exhibit at the conference to the iPhone, even though Apple Inc. won't be at 3GSM and the iPhone isn't available yet.

Funambol Inc. plans to show off its Linux-based applications, including mobile e-mail, as an open alternative to Apple's phone, which is based on proprietary software.

One handset maker, Neonode AB, says that the iPhone follows its design lead. Neonode introduced a buttonless, fully touchscreen phone in 2004 and plans to announce a new one at 3GSM.

A Nokia Corp. marketing executive will sit on a panel at the conference entitled "Mobile Music: The Apple Factor." The panel could touch on the competition the iPhone will present to manufacturers such as Nokia and Sony Ericsson Mobile Communications AB that are already selling phones that include music players.

The references to the iPhone hint at the threat it poses to existing phone makers. "Because the iPod has been so successful, it's difficult to discount the carry-through success that Apple could have in the mobile arena," said Nick McQuire, an analyst with the Yankee Group.

Apple announced earlier this year that the iPhone, its highly anticipated combined music player and mobile phone, will go on sale in the U.S. in June and should reach European markets in the fourth quarter.

While the threat of the iPhone might loom in the background at 3GSM, Apple's arch-rival, Microsoft Corp., may plan on trying to steal center stage. Microsoft is scheduled to make an announcement Monday and some experts suspect the software giant will introduce a new version of Windows Mobile. "It's likely they'll make some form of announcement around the next iteration of Windows Mobile 5.0. The question is when it will be ready to be shipped," McQuire said.

In April last year, Microsoft said it was working on the successor to Windows Mobile 5.0, code-named Crossbow. Microsoft said then that the new release would include strong links to Office 2007 and Exchange Server 2007 and an instant messaging feature. Unconfirmed reports online suggested the operating system would be introduced either late last year or early 2007.

Crossbow could also feature support for VOIP (voice over Internet Protocol), although Microsoft would be unlikely to highlight that feature because some operators discourage mobile VOIP, McQuire said.

Phone makers that use software from Symbian Ltd. and Research In Motion Ltd. could react to a new Windows Mobile release by highlighting their broad device portfolios, McQuire said. Operating systems like Symbian, which can enable interoperability with Microsoft back-end programs, have an advantage over Windows Mobile because they run on a wider variety of phones, he said.

New handsets introduced at the conference will likely fall into two primary categories: HSDPA (High-Speed Downlink Packet Access) and enterprise devices, McQuire said. The HSDPA phones will be thin and have good battery life, an improvement over first generation 3G phones that were "clunky," he said.

High Tech Computer Corp., Toshiba Corp. and Nokia may all introduce new handsets aimed at business users.

With the increased use of phones by business users to access corporate data comes concern over security. A number of companies including Spansion Inc., Discretix Ltd., AdaptiveMobile Ltd., McAfee Inc. and Trend Micro Inc. all plan to highlight mobile security issues and products.

In addition, more and more phones come with support for Wi-Fi, enabling services that can roam between mobile and Wi-Fi networks. A number of companies plan to introduce or exhibit products that support some facet of a converged Wi-Fi and mobile service. Boingo Wireless Inc. will introduce software for developers that will enable use of its Wi-Fi roaming network from Symbian and Linux phones. Kineto Wireless Inc. will also exhibit at the conference and Shanghai company E28 Ltd. plans to introduce its second generation of dual-mode Linux-based phones.

IDG News Service

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