"The influx of data services, coupled with the traditional flexibility and value of no contract plans, has considerably increased consumer interest in the no annual contract wireless market" said John Weber, Associate Research Analyst at IDC.

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"Microsoft needs to get something into the market quickly, " says Roger Kay, president of technology research firm Endpoint Technologies Associate.

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Laura Kovach, a high-grade research associate at Boston -based Evergreen funds said: "With everyone coming to the market at once, it could take a toll on the company's ability to get through at a reasonable price, " she added.

BBC: Telecoms scramble for cash