Revenge Of Windows Mobile

Will 2006 be the yearwhen Microsoft Mobile finally takes off? It certainly looks like that. Microsoft’s mobile ambitions are on display at the 3GSM show in Barcelona. CEO Steve Ballmer gave a big wet kiss to wireless operators in his Valentine’s Day keynote address at the wireless mega show.

Store shelves are crammed with brand new Windows Mobile 5.0 devices. And a lot of it has do with HTC and its amazing designs. Cingular 8125, T-Mobile’s latest revs of SDA and MDA and Treo 700. HP just announced a refreshed line-up. The Motorola Q is one of the most eagerly awaited PDA/phones. More are coming. Like the new Samsung i320 which features a full keyboard device, very small and compact. There are 47 device makers churning out Windows Mobile devices.

This wasn’t supposed to happen …..

Guest Column by Matt Maier

When Microsoft made clear its mobile ambitions a two and a half years ago, conventional wisdom said the PC-juggernaut would fail miserably, held at bay by Nokia, and others in the wireless industry who weren’t keen on watching their businesses turn into a no-margin commoditized nightmare, and overwhelmed by the complexity of the fast-moving industry. When Redmond had problems with Sendo, its first hardware partner, many assumed it signalled the end of Microsoft’s ill-fated mobile ambitions.

Instead, the exact opposite has happened. After spending years lining up hardware partners like HTC and Palm, working around handset vendors to sign deals directly with carriers such as Cingular, and coming up with a respectable version of Windows Mobile (like usual, the third rev was a charm) Microsoft is poised for a banner year.

Revenues in its mobile and embedded devices group grew 51 percent last year (to about $75 million) and nearly broke even, posting a $2 million loss in its first quarter, compared to a $29 million loss the year prior.

“We’re finally at a real tipping point,” group product manager John Starkweather told Business 2.0 earlier. “It’s taken a number of years and software iterations, and now we’re expecting some serious growth.”……. by partnering with white-label electronics manufacturers such as HTC, Microsoft presented operators with a means to customize phones exactly to their network specifications, while HTC allowed the carriers to brand their own names on its phones. “We realized there had always been a love-hate relationship between carriers and big phone vendors,” Starkweather says.

Microsoft may have already hit its stride. Devices like Cingular’s 2125 and 8125 are popping up on most major carriers in the US and Europe, it did the unthinkable, and convinced Palm to dump the Palm OS for its new Treo in favor of Windows Mobile, and has nearly 50 different hardware partners shipping product.

Undoubtedly, there’s still a long ways to go: Symbian powered nearly 34 million devices last year, more than double what Microsoft was able to ship, but the gap is narrowing. As the price of high-end phones begins to drop, and more people begin to use their phones as extensions of their desktops–looking for email on the go, etc–Redmond is ready to reap the gains.

Guest Post by Matt Maier, wireless and gizmo correspondent for Business 2.0 magazine. Subscribe to his Third Screen Newsletter.

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