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Summary:

Microsoft recently held its annual Financial Analyst meeting at which Robbie Bach, president of the Entertainment and Devices division, laid out the company’s strategy in the smartphone space. His presentation acknowledged that Windows Mobile is not faring well in the consumer space, and the plan to […]

MS FA MtgMicrosoft recently held its annual Financial Analyst meeting at which Robbie Bach, president of the Entertainment and Devices division, laid out the company’s strategy in the smartphone space. His presentation acknowledged that Windows Mobile is not faring well in the consumer space, and the plan to address that situation was laid out. The problem is that Microsoft has never been a company to move quickly, and the smartphone playing field changes rapidly. And Microsoft’s plan to address this change, according to Bach? “This is something that is going to play out over the next 3-5 years.”

Microsoft may not have 3-5 years. The smartphone market has changed dramatically in just the last two years, with Apple successfully penetrating the consumer market with the iPhone over that period. RIM has been able to push the formerly enterprise-focused BlackBerry firmly into the mainstream consumer market over that same period. Google has made a big splash with the Android platform in just a year. Microsoft may well find its time is running out for Windows Mobile, and that a slow, steady plan may not be quick enough.

We have previously mentioned that Microsoft faces an uphill battle to break into the consumer space. It doesn’t move quickly, being such a huge company, and the smartphone world is one that requires rapidly adjusting to changes on the fly. So Redmond had better get nimble, and very soon. GigaOM points out that Motorola has dropped Windows Mobile in favor of Android for all its handsets going forward.

  1. The next 1 year is going to be important with phone technology rapidly improving (snapdragon, tegra, etc.).

    Over 3 years, my thoughts are that if they can produce:
    -a converged smartphone/media player/gaming platform with an effective interface
    -”cloud-based” consumer e-mail as integrated with WM as Exchange
    -bundled mapping software for use with GPS
    -a small number of effective and competitively priced devices, either in-house or made by OEMs
    Then they can win a lot of the market.

    MS can move fast in some areas: look at Windows 7, silverlight, .NET languages, Expression. Not WM though, but if it puts in big money…

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  2. I’m not sure I agree that the phone market does require such rapid movement. Despite the hype, it’s taken Apple 3 years to make a success of the iPhone and it’s still not the biggest selling phone. Android has been out for over a year now and is mostly all talk and no action. RIM have been chipping away at the consumer market for at least the last 5 years now and are only just starting to see results. With the exception of RIM, it seems like you are confusing new entrants in the market with agility. Remember, it took Apple 3 years from the initial release (as opposed to the point where they started iPhone development) just to add the ability to copy and paste on their phones. That’s hardly rapid development.

    As for Motorola, they are a one hit wonder and nothing they do will ever make a real difference. They might seem important in the US but you have to remember that your phone market is pretty backward compared to the rest of the world. The RAZR might have seemed like a great phone up until recently in the US but it’s so 2004 for the rest of us.

    Microsoft do need to do something big reasonably soon to maintain their position in the market but I don’t see that they can’t run a 3 to 5 year plan as well. In fact, they’d be stupid not to have a long term strategy.

    I wouldn’t write them off just yet. Palm have demonstrated that it’s possible to make a comeback and their position was a hell of a lot more dire than Microsoft’s is.

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  3. Jahan Khan Rashid Friday, July 31, 2009

    its all about the pick up and play quality hardware 3d games and internet surfing imo.

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  4. I’m glad they woke up – MS really needs to push WM7 a lot more if they want to grab the action. Keep in mind though, it took Apple years to get cut+paste on the iPhone, something that PPC phones have had all along. And the iPhone STILL won’t multitask, something I was doing 5 YEARS AGO on my first ipaq.

    The last two years have only changed because Apple introduced a “PPC for dummies”. They made the geek-oriented pro stuff every PPC has into a device camouflaged behind a fancy GUI. True, Apple does both hardware and OS, MS only deals with the latter.

    Now if MS could put a phone inside the Zune…there’s an idea. But the fact that even HTC, one of the largest WM customers, is putting their own touch GUI interface over WM6.5 shows that MS is indeed behind the times. Even if MS gets WM7 right, its only half the picture – without handset manufacturers committed to providing groundbreaking devices, even the best mobile OS won’t survive. And I don’t see MS getting into the handset manufacturing business any time soon.

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  5. People need to stop whining about copy and paste. Seriously.

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  6. wmpoweruser.com has more detail about Microsoft’s long and short term plans with a very interesting video.

    http://wmpoweruser.com/?p=6414

    It looks like WinMo 6.5 and 7 will coexist in the market and target different groups with different budgets. WinMo7 is going to include features that have become popular on other phones, will only be available on “premium hardware” (presumably the Chassis 1 specs that Mary Jo Foley talks about at here: http://blogs.zdnet.com/microsoft/?p=2752) and will then build on these improvements.

    This certainly seems like a good way to kick off a 5 year plan.

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  7. Microsoft and Palm squandered the early leads they had in smartphones. MS and Palm allowed both RIM and Apple to blow by them. iPhone sales haven’t been hampered by the lack of multitasking and until recently copy and paste. Outside of Windows and Office MS has lost billions. If WM moves in to the consumer market why did MS waste $500 million buying Danger.

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  8. Microsoft concentrated too much on business/corporate/enterprise with Windows Mobile. I was one of the few in the consumer market who preferred Windows Mobile over all other options (iPod touch included) because I happen to be a technophile who knows how to squeeze the most out of devices like that.

    But what about those who saw a WM device from a few years ago and, say, saw nothing but Internet Explorer Mobile installed? Are they going to know about Opera Mobile, or Iris, or Skyfire, or other such alternative browsers? Are they going to know about SoftMaker Office, as an alternative to the anemic Office Mobile? What about the apps that can help streamline the interface? (I personally can’t imagine using a WM device without PocketBreeze and iLauncher, or similar Today screen plugins.)

    Also, for all their talk about Exchange, it sure doesn’t mean a lot to the average, Exchange Server-less consumer. Maybe they should implement basic Exchange functionality in Outlook rather than requring an expensive Exchange Server setup to use it at all. (I may actually consider Exchange if I could just leave my desktop on and running Outlook or something, and my WM device just automatically synced e-mail and PIM data so long as both had an Internet connection.)

    Whatever they do, I hope they give a good upgrade to the stock PIM suite, Office suite, and Web browser, so that we don’t even need third-party apps to provide adequate functionality in the first place. (In fact, I just recently found out that the Notes app in Windows Mobile 5 and later is NEUTERED compared to its Windows Mobile 2003 SE counterpart! Calibration issue in the lower-right aside, you can no longer recognize handwriting into text! Only way to get around it is to pay up for Pocket Informant!)

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  9. Hi,

    I think the article you had a while back saying that people are not interested in smartphones but in feature phones really says it all. The fact that the iphone is so poor in so many areas where RIM and Microsoft is strong says it all. For me I use one phone for work and for leisure and so that phone needs good Exchange compatability, it needs to be good at arranging meetings for writing and reading emails. The other things are nice to haves. However, Apple looked at it a different way and said what people wanted was an ipod with a browser and basic telephony functionality. The UI is one point but like Apple you need a lock in…they have itunes and to a limited extent the app store. Microsoft does not have that in the consumer area.

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