Microsoft’s Windows Mobile Has A Marketing Problem

Microsoft MyPhone

Yesterday, Microsoft (NSDQ: MSFT) had its biggest day in mobile than it has had in a long time. It released its latest operating system to consumers, publicly launched MyPhone, a free consumer back-up service and Windows Marketplace for Mobile, its response to Apple’s application store. Release.

But just as before, the launch didn’t resonate with consumers. No one waited in line overnight to buy the device, and in fact, the announcements were drowned out by Verizon’s news yesterday morning that it was partnering with Google. Even today, the FCC Chairman Julilus Genachowski applauded Verizon’s news on stage, while equally neglecting to mention Windows Mobile as one of the smartphone platforms driving innovation.

There’s a number of reasons why, but one worth noting is Microsoft’s strategy, which is now turning into a marketing problem. Microsoft has chosen to focus on the software and partner with handset-makers for the hardware. They argue that gives consumers the most choice in form factors — flip-phones, Qwerty or full touchscreen. It’s true. HTC alone is offering five new Windows Mobile 6.5 devices, and Microsoft says there will be 30 phones on sale in 20 countries by the end of the year (In comparison, Apple (NSDQ: AAPL) has three). But in here lies the confusion — no Windows Mobile looks the same, and in effect, there’s not an image consumers can identify with. Greg Sullivan, Senior Product Manager for Windows Mobile told mocoNews: “That’s the value, but there’s a cost of having that value…We still wouldn’t have it any other way.”

Microsoft has been trying to change this in the past year or so. Sullivan: “We were an ingredient brand,” meaning they were visible somewhere in the background. But “the smartphone space has changed,” Sullivan said, and they want to communicate more clearly that Microsoft is behind the offering. One way they are going to do that on the phone is by requiring a designated Windows button, which will be illustrated by the flag branding, and will take the user to the homescreen. They are now only saying Windows Mobile when referencing the operating system, otherwise, it’s just a “Windows phone.” What’s more, they are running TV commercials for the first time ever. Sullivan said the ads are appearing soon and will run during primetime shows like “Dancing with the Stars” and “30 Rock.”

It will be interesting to see how Microsoft does, compared to Google (NSDQ: GOOG), which has the exact same strategy in terms of focusing on the operating system and partnering with handset makers to build the hardware. I asked Sullivan that if Microsoft believes this is the way to win, then what will stop Google from being successful, too? Sullivan argued that since Google is relying on an open source platform, it could be affected by the platform splitting off and having multiple threads, which causes confusion. “It remains to be seen if that will happen.”

Beyond branding, Microsoft has other issues to contend with. Next year, it is releasing its next operating system Windows Mobile 7, which is supposed to more closely compete with Apple. However, a big complaint about Microsoft is that its releases are too far apart and that consumers must upgrade their handsets in order to get the update. Motorola (NYSE: MOT) listed that as a reason yesterday for why they decided to focus on Android instead of Windows Mobile. Meanwhile, Apple, Google and Palm (NSDQ: PALM) have been updating their operating systems frequently and pushing it out over the network. “The awareness of that is very high at Microsoft,” Sullivan said.

One message Microsoft execs are being told to push out while at CTIA promises some hope. As trained, Sullivan says: “In the weeks and months ahead, you will see more innovation from us in mobile than you have ever seen before.”

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