Blog Post

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.

36 Responses to “Revenge Of Windows Mobile”

  1. Windows Mobile is doing well in providing developer tools
    and support. Also the extention of desktop software to mobile is also helping them to an extend.

    But as far as the OEM support for promoting products is concerd they are not still up to the mark. They are wasting
    there energy by promoting WMA and WMP and some propriety technologies which will back fire them since overnight its difficult to make people switch to those formats.
    The inablity to provide hardware acclaration support in
    DShow technologies is a major bottleneck. Symbian is good
    in those things. But in giving development tools and other things there are not up to the time making the “time to market” process lengthier. Innovation i think Nokia and Microsoft are good contenders.

    When it comes to “Smartphone” Symbian had snatched the
    “Ease of use” from Microsoft. From a user point of view Microsoft is still in the babyhood. Microsoft should know playing the cards at right time or else they may loose the game.

    I believe we cannot predict about the success failure of a particular platform as of now.Be down to earth and realistic, It will be only a forecast and may be a guess !

  2. I’ll try to list some of the OEMs/ODMs here off the top of my head – I know I’ll miss a bunch:

    HTC, Palm, Motorola, Samsung, HP, Dell, Wistron, ASUS, Acer, Symbol, Garmin, Flextronics, Mitac, Sagem, Unitech, HHP (Handheld Products), Intermec, Itronix…that’s 18 of them; there are quite a few more. Don’t forget that Windows Mobile is on ‘classic’ PDA devices as well as phones…but more and more of these makers are doing phones, even in the industrial products.

  3. It is natural for competition to evolve after the major technology breakthroughs, being the leader becomes more difficult. In fact this situation is very good for the consumers of that technology as well as the market dynamics around it. The way this is heading is very cool, three big plays competing with each other :
    Symbian, Linux and, Microsoft, as dominance decrease and competition increases we all benefit, monocultures are rarely good for the consumer. Thus this time is probably the most exciting for mobile products as these 3 forces playout there various hands. I just hope one does not come to dominate again as that is a recipe for stagnation, the 3 equally balanced would be perfect for competition and product advancement. We all have good seats for this episode of the mobile story.

  4. Windows Mobile is a very strong platform at least from a development POV. Coupled with .NET Compact Framework, its amazing the ease and productivity benefits that it brings.

    Next week, I am doing a roadshow in Pune, Mumbai and Delhi comparing the Windows Mobile and Symbian platforms.

    What is strange is that history repeats itself. Once again, Symbian which is (was ?) a clear market leader is throwing away the advantage by not constantly innovating and building a super productive development platform.

    Developers, Developers, Developers….

    Tarun Anand

  5. Don’t forget about Linux smartphones. They are already popular in Asia and will eventually find their way to Europe and US. Microsoft has a winner in Windows Mobile, but this is not going to be a replay of the desktop market. Ultimately, the OS running on your next phone will be determined by the Operator. Still I think the proliferation of Windows Mobile devices is good news for Mobile software developers.

  6. Frank Daley

    Nokia has been too slow to address Microsoft’s fundamental strength that will leverage huge growth in it’s mobile marketshare: Outlook + Exchange.

    Nokia’s licensing of some Exchange technologies allows it to be a me-too player. However, tell me ANY company that has successfully competed against Microsoft using its own technology.

    The writing has been on the wall for years, and Nokia should have become an active player in the strategic directions of the back-end email server + strategies to displace Outlook.

    Only hope now is to work with guys such as Scalix and/or Zimbra that need significant injections of capital to build a global sales and marketing presence to ho head-to-head against Microsoft with their Exchange replacements.

  7. I am just wondering, does the design on the outside or the software on the inside matter more to users? Would be interesting to see a study on that. I personally changed over the last four years from the design perspective towards the software. I had so many good looking but crappy phones (Sony Ericsson K700i was the worst!) and my current phone, T-Mobile SDA, is not a beauty but great to use.

  8. Matthew Maier

    Al brings up a good point: The Microsoft resurgence is being carried on the backs of the North American market, much like Palm was a decade ago. Furthermore, it still is very much a niche within the smartphone segment, and a small-ish niche at that.

    However, as the price of high-end feature phones comes down to a mass market pricepoint, say around $50-$99, which it will in the next two years, then phones like Cingular’s 2125 will likely grow in popularity. And once there’s a decent-sized base, say 30-50 million installed, Windows Mobile will certainly get more developer support than it does.

    That said, Symbian is sure to make a play for this market as well. As will Linux, etc. It should make for some interesting competition. The fact that MSFT is even competing this far along, is what many people assumed would never happen.

  9. Sarah re your developer comments, as developers we cannot control what phones our user have, far from it in fact they have a diverse collection of mobile devices. For our product to work with as many user as possible we have to develope for the mobile pyramid of supported features :

    XHTML lite
    Java (Me + enhancements)

    I’m afraid windows Mobile isnt even on the radar yet, which is why I’m interested in the possibility of Microsoft reaching a tipping point in the U.S. (I’m only familiar with Europe and emerging markets) I kind of assumed U.S. was similar but haven’t yet seen evidence. I would like to know however if it is so as it is important to us for obvious reasons ;)

  10. AI,

    i guess i should have been more specific. I think the low end of the market is almost always going to stay out of reach of microsoft because its OS is still very resource heavy and needs a lot of power and memory.

    in the near term, no way win mobile can run on a $25 phone. their the bespoke OS is going to be king. but then i could be totally wrong. the power of processors is increasing quite rapidly.

  11. tobias

    i am with you on the business user – microsoft is going to do quite well there, and i believe that it is an opportunity lost by symbian.

    just the developer support (as Sarah said earlier) is going to be key in who wins in the consumer market place.

    I tried the symbian phones – 9300 etc – they are just not there as yet and i think the only hope they have is luring non-Windows users such as Mac people.

  12. Hi Om

    Interesting comments on Windows Mobile growth, but I think it is only relevent when examining the very top end of the Mobile phone/device market. In the volume end of the market it is very different particularly in emerging (fastest growing) markets i.e. India, Africa, china etc.. low end devices based around symbian/other are king ( Also Here in Europe the market must be very different from the U.S. as their certainly isn’t a bias even at the top end of the range for Windows mobile, rather Nokia tends to dominate here. Also motorola and sony (non windows mobiles) are also very popular and contionue to take from nokias share without adding to Windows mobile. I would be interested in seeing teh U.S. figures that indicate a tipping point for Microsoft’s mobile platform however, do you have any pointers? I would be very interested in seeing some hard figures. This is a fascinating area that is devloping fast, ypour article brings up some important points.


  13. Om Malik, you say that you see Symbian as the OS for the masses. But what about business users? Synchronizing your mobile with your companies exchange and your desktop is so easy with Windows Mobile. I had many mobile phones over the years but not one of them synchronizes as easily as my SDA. Lots of people I know here in Germany have Windows Smartphones or PocketPcs and the number is growing steadily. Is it the same in the US?

  14. Unfortunately, Microsoft’s aggressive plans only address part of the problem. The remaining issue lies with the crappy customer support from various vendors. For instance, I’ve upgraded by Axim X50v to WM5 and seen my battery life tumble; there’s an online petition to get Dell to issue a ROM update. Meanwhile, my iMate KJam is working OK, but I see numerous horror stories on the iMate boards about owners’ inability to get real tech support. What good is a great operating system if the hardware vendors drop the ball?

  15. “There are 47 device makers churning out Windows Mobile devices.”

    What CRAP! 47 device makers? Where are all these companies at? So far I see HTC and uhhh….. HTC? That’s about it. Oh ya! Palm! w00h.

  16. Sarah, I agree with you. Microsoft’s long legacy includes an understanding of the Developer and providing Developers tools. Symbian is a newcomer. However, you might be giving Microsoft too much credit and forgetting the power of open source. Why would a Developer want to lock herself/himself into one platform with proprietary software code? Those days are over. Its about content. The people to truly worry about in the mobile telephony ecosystem are the wireless teleco carriers because they have been putting up their “walled gardens” of content for years. That’s bogus. Why should mobile users be only able to readily access content that the wireless carriers thinks is relevant? That’s totally against the grain of the Internet.

  17. i don’t think they are going to dominate the mobile market because of many reasons. one of them being that most phones have a feature overkill, are still sluggish and well, don’t do the job of the phone quite well.

    they do the pc stuff quite well. i think activesync is a good technology. it still takes a lot of memory and is slow like shit. but compared to three years ago, this is space age.

    but don’t discount symbian, which in my opinion, is going to be the smart phone os for the masses because it is more robust for phone features first (and then the tiny-pc stuff.

  18. Microsoft have finally got themselves into a position where they not only have the platform, service providers and hardware vendors on side but they have also provided an adequate tool set for the developers to develop software for their platform. In many ways they are helping to open up software innovation on devices.

    The likes of Google can leverage off of the fact that they can put their own internet explorer style web surfing application on there as well as having the MS pocket IE software available.

    Symbian unfortunately don’t seem to be able to get around the issues with providing web data on small scale devices where Microsoft can.

    Which one would you choose? I know as a developer I would go with ease of use and a quick easy learning curve for my users which suggests Microsoft Mobile 5.0 to me! (It’s just a shame Google are banking on Symbian developers in their mobile strategy!)

  19. What I like about Microsoft challenging the Symbian crowd is that this competition motivates (scares) the heck out of Nokia, Ericsson, et al and the heat will be on for Symbian (as well as Microsoft) to attract developers to their platforms. Furthermore, the chances of open source software coming to these devices increases substantially. For example, Symbian has already started to provide a Python interpreter for the Nokia Series 60. This is really great because developers have choice and they’re not locked into figuring out what version of Java (if Java at all?), for example, is on these phones (what a pain in the butt that has been so far to-date). If I can develop content applications on these mobile devices with Python or Ruby, I’m going to be in 7th Heaven!!!

  20. I’m impressed with the latest version of Windows Mobile devices and having seen the Direct Push functionality in action think they’re going to have a great year. However, stating that there are 50 different hardware partners is a little misleading when so many of them are offering re-branded HTC products. It would really help MS if they got some more of the traditional mobile phone brands on board (either that or Motorola could actually ship something rather than demo it at trade shows).
    Also I’m not sure where you got a figure of around 17 million devices shipped by MS last year. That seems very high compared to recent Canalys and Gartner reports, have you got a reference?

  21. true. when you are that big, failing takes special talent. MS is also wining because of the sheer size and who knows what kinds of armtwisting and other tricks MS may be using. i have heard rumours that ms for mobile is being offered dirt cheap, if not free, and with a compnay that controls most of the computers and business software, breaking deals will not be a problem. Example : Newspaper buys stake in giant retail chain in exchange of advertising space!!! how can a startup fight, unless, he is a pioneer in terms of idea/execution etc etc (like Google). how many startups can do that? and i do hope we have a choice and I am able to buy a non-MS mobile device. unlike the fact that my favourite MacOS will now be run on the same intel chip that the next discount store dell will. o brother, where is the choice?

  22. Alejandro

    I think part of the reason MS will win thw cell-OS battle ( and they certainly will) is basically they are doing the same they did with palm: taking a high end desktop OS api and shrink it until it ‘ll run on cellphones, while it might seem the wrong thing to do , they have murphy’s law on their side, as processors and memory get cheaper, optimization mothher less and features more.
    Meanwhile Symbian and Palm came the opposite route, a limited OS for portable devices and they will had a hard time scaling it up to the new devices.

  23. terrific post and well-timed. i’m glad to see that someone has grasped the 700w for something more than just device specific OS change.

    But, a larger question, could WM5, 360 and the Media Center OS show a fore-sighted, profitable (and accordingly rare) gamble on the long run? The economic implications could be ground-shaking, not just for the tech biz (see Apple, i.e. iPod = short run), but the economy in general.