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Summary:

Microsoft is apparently going to counter the Android and iPhone offensives on the mobile market with a new strategy: confusion. The company will allegedly continue to sell its increasingly less relevant Windows Mobile 6.5 for a lower price when it launches version 7 in the fourth […]

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Microsoft is apparently going to counter the Android and iPhone offensives on the mobile market with a new strategy: confusion. The company will allegedly continue to sell its increasingly less relevant Windows Mobile 6.5 for a lower price when it launches version 7 in the fourth quarter of 2010.

The fourth quarter of 2010? I mean, does Redmond expect Google and Apple to go on a yearlong vacation? No wonder Microsoft is becoming irrelevant on the mobile platform. As I have pointed out in the past, Android is going to kill Windows Mobile.

We have been writing about the troubles at Microsoft Mobile for almost a year now. That trend hasn’t quite changed. Microsoft’s smartphone operating system share continued to drop year over year to account for 9 percent of the total market in the second quarter of 2009, according to research firm Gartner.

Windows Mobile 7 will be the premium platform that will compete with the iPhone while 6.5 will rival Android, according to a report in Taiwanese trade newspaper Digitimes. If that is the case, then the folks at Microsoft should call their friends at T-Mobile USA and have them send over a few Google phones. That would make them face their delusion. With Microsoft’s not-so-loyal hardware partners — Motorola and HTC are already cheating on it — it seems the company might have unfortunately lost the plot.

(Related research report: Check out our latest GigaOM Pro report, “Google’s Mobile Strategy” (subscription required). We will also be discussing this topic as part of a free Research Roundtable Webinar on Aug. 27, 2009. Register here.)

Windows Mobile 6.5 photo courtesy of Microsoft

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  1. Friends of Dave (friendsofdave) ‘s status on Wednesday, 19-Aug-09 14:48:04 UTC – Identi.ca Wednesday, August 19, 2009
  2. If only MS management had brains like you, we wouldn’t have seen products like Xbox, Zune, etc.

    1. Xbox yes, Zune no. Also, check the amount of money they have had to spend on XBox to beat the competition.

      In mobile, they had the lead and they still are losing market share. What does that tell you.

      1. OM, was there a better way to beat Sony’s iconic game console ? And no Wii is not in the same league …

        WinMo had the lead, it tells you that smartphone innovation started in MS. Sure, it needs more work to get back in the game.

        1. aaycee

          smart phone innovation started at symbian. I think it is wrong to give Microsoft credit. but one has to credit them for recognizing the opportunity. of course one has to smack them for blowing that opportunity. You think they can get back in the game? If yes, I would love to know how from You.

          1. MS has plenty of opportunities to do well in this market. They own Windows and Exchange, where most business data is still stored. If they can exploit this ownership by making people’s data available securely and seamlessly through fixed and wireless environments they have a great story.

            After MS gave away Internet Explorer to crush Netscape you’d think they could find the right price point for Windows Mobile. Even if they do that, they won’t win the mobile space, which moves quickly (as you point out) and is geared toward back-end revenues – two characteristics it has in common with online business, another area that MS keeps screwing up.

            Microsoft built great stuff initially. While doing it they built an internal culture of selfishness and nasty intramural competition, and fed that on huge monopoly margins. Look at how well the Microsoft diaspora has done in business. Compare it to the PayPal and SGI diasporas. They’re GM and they don’t know it.

          2. Symbian and UIQ were really the innovators in the space! Microsoft, tried to pull together their developer community into a rational mobile development process. and it was certainly better than Java in most respects.

            Personally, I think that Microsoft could get in the game in the same manner that Google is with Chrome and Nokia should, by focussing on making WebKit-like tools the central application platform. A browser based platform with connections to functionality allow for flexibility and standardization. Three profiles for pocket, business, and tablet would suffice. Think 2 years out, not 6 months. Allowing developers to leverage the more advanced tools would be a plus.

            1. Agreed.

              I think from a developer standpoint, the old Palm/Treo did a great job — it was a great platform that was doing surprising well as a “smartphone” but somehow lost its way. i think none of these guys really focused on one thing – multimedia or enterprise/productivity.

              The iPhone is all about multimedia and consumer type apps while RIM is about enterprise/productivity and they are both gaining market share.

          3. They have several strengths, developer ecosystem, enterprise presence, telco relationships, OEM relationships at several levels. The aleged dual platform stratergy you are terming confusing, seems like a good stratergy to me, if it is correct. One for the lower end market and one for the premium market. Yea Q4 2010 is long ways away but hey this not the end of the world. Think long term !

            1. Key issue to address on two platform strategy will be 1)Ecosystem Impact 2) OEM Cost Structure and 3) Consumer branding/perception (Windows Phone – though WM phones have it today touch vs non-touch). First two has same set of questions – How different are these platforms from one other? Do you need to build two SKUs for each app? Do you need to have two engineering teams to support development on WMo platforms?

              At the end of the day it will be cost vs opportunity for OEMs and developers.

              I don’t think lowering the cost of WM6.5 vs. WM7 OS will make a huge difference (not sure if consumer sees it). Core will be difference in the price of devices (after subsidy)and experiences they bring out.

              My personal opinion is that WM6.5 will be dead soon after WM7 launch (so questions to OEMs and ISVs – Do you really want to invest into an intermediate platform knowing that WM7 may be around the corner).

              Another complication as mentioned by OM – what is role of “Pink”? Is it WM6.5 or WM7 or something totally different (built on Danager)? Will MSFT be asking ISV community to develop for Zune, WM6.5, WM7, Pink, Danger, Xbox at the same time?

      2. @AayCee:
        “WinMo had the lead, it tells you that smartphone innovation started in MS.”
        Nonsense. Put down the Kool Aid. Having had the lead only tells you that they had the lead. MS hardly ever innovates. There have been a lot of innovators in the mobile space, but MS was never one of them, even to the point of sleazily calling their mobile OS “Palm” once upon a time. ‘tards they were, ‘tards they stay.

      3. Absolutely right…

        The XBox is a money drain. They would have lost billions on it even if it wasn’t such a poorly made device (what was that failure rate again?)

        They lost over a billion dollars for the first red ring of death fiasco. Then they had a couple of others, and the device is of poor build quality anyways.

        If it wasn’t for the Windows, Office and SQL cash cows, XBox would have long been underwater..

      4. @addicted, @Ronbo13

        You guys seem to only recognize visual innovations, however, there are innovations happening in many levels.

        XBOX is one such example, where a bussiness was built from scratch to compete with an iconic leader in the space. You don’t win a game like that if there is no innovation. tards don’t win this kindda game…

        BTW, their cash cows are not going away anytime soon … expect more fierce battle in mobile, search, entertainment …

      5. “Also, check the amount of money they have had to spend on XBox to beat the competition.”

        Xbox? Win?

        Are you really that fucking stupid?

        Some 8 billion dollars down the drain on the Xbox fiasco. And after 8 years of the Xbox train wreck they are selling at almost exactly the same rate worldwide as the first Xbox marketplace flop.

        Last gen the Xbox sold around 25 million over 3 1/2 years.

        This gen the Xbox has sold around 30 million over 4 years with massive numbers of duplicate units bought due to the RRoD nightmare.

        Last gen the Xbox was dead in Japan and mainland Europe.

        This gen the Xbox 360 is dead in Japan and mainland Europe.

        Last gen the Xbox was destroyed by the PS2.

        This gen the Xbox 360 is getting destroyed by the Wii.

        Last gen they were last place in 2 of the 3 major console markets. And second in the third.

        This gen they are last place in 2 of the 3 major console markets. And second in the third.

        Flat to declining stock over the past decade shouldn’t surprise anyone when a company can waste that many billion on a failed product.

      6. Om,
        Couldn’t agree with you more on this. Great analysis. Spot on.

        The new game in the town is “SPEED” , look at the way APPLE, PALM and Google are churning out their Mobile systems. It’s not just the original release of their OS, but the updates they are putting. I am sure there are many sleepless engineers at APPLE, PALM and Google who probably are proud about their work that they don’t mind sleeping.

        Microsoft strategy is too confusing. They have no one with brains running the mobile division. Their updates are slow. From MS Mobile 6.0 to 6.1 it took ages. Then the new 6.1 was not compatible with most of the devices (ask me about it, I tried to upgrade a HTC Touch, it was a mess for third party APPS). Now the 6.5 is coming in a month or so. Next up is Mobile 7.0 supposedly with Capacitative screen. What happens to the goats who paid a full $ 300 plus (they are not cheap) on a WinMo 6.5 device ? well they are to be slaughtered. Guinea pigs we call ‘em.

        Look at their browser. That thing is time wrapped circa 2002. And look at the competition, PALM did super duper job on WebOS in two years from the ground up. Google is coming up with updates every six months or so.
        And
        APPLE, what can you say, they are on to third major update in two plus years ( with minor updates as needed). These guys are relentless.

        Microsoft should throw out the existing platform, Redesign the UI, embrace Webkit browser then finally make it foolproof.
        Oh not to forget about speed and stability.

        The issue is they have the TALENT, but they are TOOOOOOOOOOO SLOOOOOOOOOW.

      7. Wow, only a few days after Gigaom splashes mud at microsoft (apologies for the understatement), here comes some real news. From engadget of all despicable places.

        http://www.engadget.com/2009/08/24/microsoft-delivers-oneapp-app-framework-for-featurephones/

        Makes me think if Gigaom’s blog-world domination strategy is: Jump to conclusions …or is it “beat microsoft” ?

    2. That’s one heck of a sweeping statement. The world would be boring if there was no choice. You don’t have to buy Xbox or Zune. You are not obliged to even try them. But there is place under the sun for an Xbox and for a Zune..just as there is place for Linux distro.

      Coming back to the mobile OS story…the Digitimes story referred to talks about touch support coming in Feb 2010 (yes, on 6.5 only – not 7), but Feb is Q1 2010, not as far away as Q4. Surely, Q1 2010 doesn’t make Microsoft even a quick follower and surely not an innovator. But why lay the innovator allegation at the door of Microsoft in the first place? Microsoft is not as much about leading edge innovation as it is about the exact opposite – commoditization.

  3. By Q4 2010, web apps are likely to be the predominant way to develop functionality for smartphones, especially when HTML5, BONDI, etc. are widely supported. This will make the underlying OS virtually irrelevant and certainly something less attractive to license/pay for.

    1. Yep, because MSFT is known for its awesome, standard-compliant browsers…

    2. Right. Just like the Internet made the desktop OS irrelevant.

    3. “By Q4 2010, web apps are likely to be the predominant way to develop functionality for smartphones”

      Not so much. You know this strategy didn’t exactly work for the original iPhone. It’s not like developers were wild about only being able to build web apps before the SDK was released. Now look at the success of the App Store.

      “especially when HTML5, BONDI, etc. are widely supported”

      Yeah. That’s not going to be by Q4 2010 though, is it?

      “This will make the underlying OS virtually irrelevant”

      Nonsense. Have you actually been paying any attention to what’s been happening in the mobile space the last three years? It’s all about the OS, baby.

  4. You forgot all about project pink and purchase of Danger… what’s going on there? added confusion and screw up.

    1. Actually I did forget about Project Pink. The Danger acquisition – well I am betting that is more for the back end technologies than anything else.

      Trent you have any theories?

      1. Absolutely not, Pink is supposed to be an end to end solution and not just back end. Different experience, marketing, business model etc from WinMo. MS is spending a lot on project pink. $500M spent just on Danger and they have a whole group that is working on it.

  5. What MS has done with Zune and Xbox product lines has no bearing on how badly their failing with WM…..in the mobile OS field WM as a mobile platform is turning into an after thought. Wasn’t it just 3 years ago that HTC was all WM?? Microsoft has really dropped on the ball on WM development

  6. Steve Patterson Wednesday, August 19, 2009

    Neither Google nor Microsoft have realy thought through the need to compete with the iphone with “new revenues” by helping their phone ODM’s innovate. Both companies have adequate talent to influence phone manufactures to give them the advantage of optimized hardware.

    In a few years the processors in phones will be real fast such that code optimization will not matter and bandwidth will be so rich that applications can run in browsers. But not right how. Right now to produce a winning phone – hardware and software need optimization.

    1. Never forget that you’re balancing speed with power consumption. In a battery constrained device, faster is not always better. Think of the user experience, instead, and how that can be improved.

  7. Is it just me or is Microsoft now only really good at integration between/over Applications boundaries.
    From Office over Exchange to Sharepoint, all are integration Products. I don’t say the Products are good, but hardly matched in integration levels.
    A few month ago I asked someone at Microsoft if Functionality is the KloC of Microsoft. Maybe that explains it, functionality drives bloat but helps to integrate where it hides bloat.
    In other words as long as Phones are not mature/powerful enough and there are no killer features to integrate, wait for Microsoft to bring out anything decent. After that all beds are off.

  8. can’t really call it windows 7 in the 4th paragraph as that is the name of their computer OS.

    1. Good catch. Thanks buddy. appreciate it.

  9. Hmmmm.. its a bit hard to comment on this..!! But my dear friend, Reality BITES !!

    I heard that, When Windows Mobile project was started at MS, thier only competition which they had in mind was “Research in motion’s Blackberry”. and Ever since their release, they have succesfully built on that. Suddenly, Like a typical Rajnikanth’s movie.. came in iphone and redefined the User eXperience, one can ever expect from a mobile device. :-) he hee..!!

    Few UI enhancements which are expected in WinMO 6.5 (source-youtube) is already given by SPbShell for WinMO 6.0. In such a case, even a buyer would really think on the tangible and intagible benefits. May be technically its really competent.. but boss, the proof of the pudding is in eating..!!

    Well, jokes apart Android and Iphone are really moving on a Ferrari.. Not sure, when WinMO will pick up to that speed…or even better “beat it!!! ”

    PS: I am not an Anti WinMO guy .., I use a HTC mobile device which is running WinMO happily :-)

    1. props for integrating rajnikanth w. msft, winmo, iphone, android !

      1. LOL! Seconded.

  10. They got leapfrogged on the mobile os side and they clearly realize that, hence the massive investment in WinMobile 7. Did they make a mistake – certainly. Are they correcting that mistake, yes. Can we sit here and argue about timing of WinMobile 7 — Q4 2009 would be better then Q4 2010 but the product is ready when it is ready. While I love my iPhone and doubt that I will switch to a Windows Mobile device there are billions of users moving over to smartphones over the next 5 years and if MSFT executes on WinMobile 7 they will earn their fair share.

    We need MSFT to be successful here, the Apple App Store needs competition and looking forward to more competition from a company that knows how to work with developers to create ecosystems.

    1. Those buggy whip guys should really accelerate the new line of whips to counter the wave of horseless carriages that seem to be coming on the market.

      If the buggy whip guys do not hurry, their sales may suffer…..

    2. Sure we need competition, I would love to root for Microsoft.
      But they are slow , I mean snail slow.
      APPLEs and PALMs of the world are not going to twiddle their thumbs while Microsoft is cooking the WinMo 7 for three plus years or so.

      The fact is they are SLOOOOOO W

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