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Windows Phone 7 Shows Why RIM, Nokia Need a Fresh Start

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Microsoft (s msft) today introduced its new Windows Phone 7 mobile platform in a nearly hour-long demonstration of the operating system by Microsoft Director of Windows Phone Program Management, Joe Belfiore. With the new platform, Microsoft becomes the third company in as many months to unveil a new mobile phone operating system, joining both Research In Motion (s rimm) and Nokia (s nok). Unlike the latter two companies, however, one aspect quickly became clear during Belfiore’s presentation: By starting over from scratch, Microsoft has given itself a better chance than its peers to reinvent its place in the smartphone market.

Time for a redesign. As I watched the livestream of the Windows Phone 7 event, I was taken by the design thought put into the new platform, something I can’t ever recall saying about Microsoft’s earlier attempts at mobile. The interface is more unique than any we’ve seen since the original iPhone, with tiles and hubs instead of icons and apps. Dare I say it: The Windows Phone  7 user interface is actually a feature and one that will get consumers interested in Microsoft-powered handhelds. A panoramic navigation method both uses limited screen space intelligently and doesn’t force users into deep, cascading menus. The integration with Microsoft services appears top-notch, ranging from OneNote in the cloud to Zune for media, Xbox Live for gaming and Bing for navigation and search.

Power Point mobile brings sexy back. Microsoft ran the risk of alienating its existing user base when it announced earlier this year that the old Windows Mobile platform was in the past and that Windows Phone 7 was the future. Indeed, none of the tens of thousands of existing Windows Mobile applications will run on the new Windows Phone 7 devices.

Instead, apps must be ported or re-written using Microsoft’s Silverlight, .NET Compact or XNA frameworks, and Microsoft itself has already done just that with its mobile Office suite; Belfiore demonstrated a slick Power Point presentation on stage this morning. (Did I actually just give the oft-maligned slide decks a shout-out?) Although some are bemoaning the lack of basic features such as cut-and-paste — Belfiore said Windows Phone 7 will gain that in early 2011 — the real challenge before Microsoft now is in getting developers to build applications for the new smartphones. Perhaps that’s why Microsoft is presenting the illusion of developers jumping on board, even though they haven’t committed to do so just yet. But why are apps even an issue?

[inline-pro-content align=”right”]Do apps sell phones, or do phones sell apps? Palm’s webOS (s hpq) is the poster child to illustrate the potentially vicious chicken-and-egg scenario between mobile applications and handset adoption. WebOS arguably offers the best mobile user interface, but the catalog of quality applications always lagged behind those from competitors. In today’s app economy, consumers are looking for devices that can be easily extended through software, games and utilities. Although there were other key reasons why webOS devices didn’t gain large chunks of market share, a relative lack of apps by comparison to iOS and Android phones is a contributing factor.

While some say market share of smartphones is irrelevant, I’ve previously argued that such sales figures matter greatly to developers. If devices aren’t selling to large numbers of consumers, why should a programmer build apps for a small target audience? Mobile app developers are the new king makers; if developers don’t build apps, the catalog doesn’t expand rapidly, which causes consumers to choose another device, continuing the spiral of death for a platform.

Nokia and RIM are stuck; for now. While the path ahead may be rocky for Microsoft, the company is treading in a different direction from RIM and Nokia, who are both facing the same pressure from Apple and Google. Take a look at RIM’s new BlackBerry 6 or Nokia’s Symbian^3 platforms and you’ll notice a key difference: Both operating systems are constrained by current user bases. Neither company took Microsoft’s approach by radically redesigning their smartphone user interfaces. Instead, both BlackBerry OS 6 and Symbian^3 are targeted as an evolutionary update or a refresh for existing customers, providing a familiar interface but adding new bells and whistles or better touchscreen integration to compete with the status quo. As a result, both are more of the same for current users and less likely to attract new customers.

Both Nokia and RIM are thinking of the future, however. Nokia is readying MeeGo-powered devices, possibly by the end of this year, even though a key executive in the MeeGo area recently left the company. Nokia expects to compete with the high-end smartphone and device market with MeeGo, a Linux-based platform created by the merger of Nokia’s Maemo and Intel’s (s intc) Moblin Project earlier this year. RIM has already tapped the QNX platform, which it acquired this past April, for its 2011 entry into the tablet space. If successful, the company could leverage QNX in future smartphones, too.

Microsoft has to go “all in.” Windows Phone 7 comes at a time when Microsoft is nearing irrelevance in the fast-growing smartphone market, a turn around from the early days of smart mobile devices. In July of 2006, for example, research firm Canalys estimated Microsoft’s market share at 15 percent and growing (PDF) as compared to just 6 percent held by Research In Motion’s BlackBerry devices. Fast forward to the present day and RIM is fighting for its life against iOS and Android devices while you can count Microsoft’s share using the fingers of just one hand.

The combination of complacency with Windows Mobile and the rise of intuitive touch user interfaces from competitors such as Apple and Google have left Microsoft as an “also-ran” in the smartphone race. However, one has to give credit where it’s due. By scrapping Windows Mobile and building the new Wind0ws Phone 7 system from the ground up, Microsoft’s risky bet is likely to pay off and help re-establish the company in smartphones if developers show up.

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28 Responses to “Windows Phone 7 Shows Why RIM, Nokia Need a Fresh Start”

  1. Consumers should be extremely cautious about the new Microsoft Windows 7 phones (really Vista 6.5 renamed). I think they really ought to be left to languish as a small, market niche for a couple of years to prove that they can remain virus and malware free. The world simply doesn’t need a mobile phone platform that repeats Redmond’s past mistakes and security flaws. Microsoft should be required to earn trust all over again.

    • “The world simply doesn’t need a mobile phone platform that repeats Redmond’s past mistakes and security flaws.”
      – Because iOS is secure? Many of its jailbreak methods take advantage of a PDF security flaw they can’t seem to close.

      I’m really curious about this, I think my next phone may end up being a Windows Phone 7 device when my contract expires.

  2. This is all good for the consumer. If Android hadn’t aggressively entered the market we would all be using iOS whatever. Microsoft had no choice but to make a big splash. And now its back to Android and iOS to innovate. As for me, I am excited that we are in a virtual blizzard of innovation. Before you know it, things will slow down and we will all need something else to obsess about.

  3. Nokia has one big advantage here; it has managed the legacy break with Symbian^4 much better than MS WP7 or even Android (2.2 vs 3.0). In Nokia’s case, Symbian^3 is backward & forward compatible. All new apps can now be more efficiently written with Nokia’s Qt framework, which currently operates across both Symbian and Meego. The Qt apps are much more resource efficient, like native apps, than competing approaches such as Java. The newly revised Developer Terms & Conditions are also competitive and aligned with Nokia’s ecosystem growth objectives. With Qt, Nokia is better positioned to leverage its massive install base…making it more attractive to developers and thereby avoiding the chicken/egg dilemma. Developers can now code once for Symbian^3 without worrying the efforts will be lost to Meego and/or Symbian^4. By design, these efforts will be retained.

  4. Anyone who thinks that this will be a successful OS does not know anything about smartphones. I can assure you in one year’s time you will not even remember Windows Phone 7 (what a retarded name btw) It’s the second coming of Windows Mobile and KIN. M$ has not learned anything in the failure of them two.

    • Are you serious or just rambling. Bookmark this comment and revisit in a years time. I am not a fan of Microsoft but I think they have done something really good here. This is a strong contender.

    • @at33 — How much do any of us know about smartphones? If we are honest with one another? It’s impossible to be an expert on a device and market that is so remarkably new and as epochal as the automobile. Everything is in a steaming and simmering stage and could turn overnight…

      That said, what we do know is that this is a consumer product. And, technology be-damned. It’s about price and emotional pull. It’s not about who’s best. Sometimes the best wins, but, it’s not “why” they win.

      Symbian and Blackberry are vulnerable right now.

      Plus, the Windows7 emotional positioning of “real time” v. “facetime” is outstanding. Microsoft are using Apple’s own counter-culture hip stance and co-opting the old BE HERE NOW. Brilliant. Unless you’re Steve Jobs, who probably wish he’d trademarked that phrase, even though he didn’t create it or use it.

      I love the conflicted positioning between Microsoft and Apple/Android et al. Microsoft are saying “a phone is a tool to help you in the real world” while the others are offering an alternative reality to climb into. Who wins? You’d be surprised how much BE HERE NOW can resonate…

      Emotional pull wins over Code, every time.

      OK, I’m off to put on some Dead albums now. Take care.

  5. Kevin,
    really good article. You make some really good points.
    As a .Net developer I can’t help wonder how much of Windows Mobile is left under the Silverlight based UI of Phone 7?
    What I mean is did MS really start over or just rewrite the UI?

    Nokia is doing something similar with it’s symbian strategy – it’s completely removing the old UI (called AVKON) – meaning old apps won’t work anymore and replacing it with QT. Unlike MS it’s not doing a quick brake from the old instead using Symbian ^3 as a stepping stone where both old apps and new QT apps can work. Nokia are hoping this will allow developers time to port there apps to QT before Symbian ^4 devices featuring only the completely new QT based UI are released.

    RIM at this stage is an unknown. It’s more than likely that they will switch to the excellent QNX but how and when is at this point unknown. They’ve talked about a web based approach to software development for the playbook so does this mean that that is there software development strategy going forward? what would really shake things up is if RIM (or HPs Web OS for that matter) supported a cross platform development framework like QT.

    There are so many great mobile OS’s happening

    • Yep, Symbian^4 is Nokia’s fresh start for it’s smartphones with Symbian^3 being the transition period while they get developers onboard with QT app development which is much easier than the old Symbian S60 development.

      Their QT skills will carry over to MeeGo so it’s not time wasted either and they can target the superphones/devices as well as normal smartphones running Symbian.

      I know it’s trendy to bash Symbian but it still does some things WP7 doesn’t do – notably SIP support, Full Exchange support and VPN with IPSec. Who’d have thought Symbian would be a better corporate phone OS than WP7?

  6. “Although there were other key reasons why webOS devices didn’t gain large chunks of market share, a relative lack of apps by comparison to iOS and Android phones is a contributing factor.”

    But not as much as poor branding, unattractive hardware and bad marketing.

    A good UI itself doesn’t sell phones otherwise Nokia would have been bankrupt a year ago.

  7. I think Microsoft did a great job here. It’s beautiful and different. If I’m Apple, I am not worry because I drive innovation and it is well executed. Instead, if I am RIM and Nokia, I should get scared. Kevin, you are right. Microsoft could really gain market share at the expense of these two companies and also of other iPhone’s copycats. If things start to go really well for Microsoft, then Android should also think twice now. Andy Rubin sounded really arrogant a couple of days ago when he said the market didn’t need a new platform, implying WP7 would tank. Wrong take! I think it’s simply stupid because with technology and innovation, you just never know. And now that I’m giving another thought to that opinion, I’m telling myself he maybe meant Android ;-)

    • Apple drive innovation? Are you insane?

      Apple have done absolutely nothing that can be described as innovative in the mobile phone space since 2008 which is why they’re starting to become more than a little stale and boring.

      Expect a good quarter this time round and then some scratching of heads in Q4.

      • Exactly Mark. The iOS UI started off looking simple and clean back in 2007 but as they add features it’s looking more and more limiting. Notifications are a pain. Task switching is a kludge. Grids and grids of icons with no widgets is looking tired and pressing home all the time to switch apps is fundamentally awkward.

        The WP7 UI designers have at least re-thought the UI and done something brave.

    • “Apple drive innovation? Are you insane?” Then why everybody is copying Apple? Boring or not iOS, the App Store have set a standard. We can say the same with iPad. But like I wrote before, this time MS has managed to put together a different UI. It is nice and original. Where’s the insanity???

      • AK, these were all pre 2009. Apple were innovative in what they did with touchscreen phones and the app store… but that was two years ago and everyone’s caught up.

        Since 2008… nothing. Zip. Nada.

      • Face Time – video calling has been available since 2006 on 3G and before that on WiFi. It’s not been widely adopted because of the cost and infrastructure.

        The retina display is simply a high pixel density display not unlike the Toshiba G900 released in 2007.

        So, no. Not innovative.

  8. ….. “Microsoft-powered handhelds”
    The point is handhelds, how will “tiles and hubs” scale up to another form factor, like 7″ to 10″?
    Haven’t seen anybody pondering that question, but tomorrow we expect the same utility(OS) on a variety of form factors. If the design doesn’t work there or looks ugly, oh well.
    Maybe we are to accustomed to icons and apps, but we know they scale.

    • Great question Ronald, but I think Microsoft has the scaling problem already addressed in Windows Phone 7. If you watch any demonstrations of the interface, you’ll see that tiles scroll from above or below the display. The same goes for menu options: they virtually extend beyond the small screen. So when the small screen gets bigger, I think you’ll see the same interface, but with more of it visible.

      • Hmm, looked at their demo. Seems optimized for a small screen. I don’t think the basic design covers “big” screens very well. Just putting more info on a screen doesn’t make it a good fit, maybe it’s just my imagination how it would look like. Surprised they didn’t have a demo for the future, they are already late to the party.
        Guess we’ll see.

    • Why do you think they want it to scale to 7″ or 10″? They don’t want to put a $15 OS on tablets. They want to put their $100 one – Windows. Even if Windows 7 is not good for them, they’d rather wait for Windows 8 to be tablet ready than make WP7 tablet ready.

      Microsoft knows tablets are the future and the more advanced and useful they become there more they will replace netbooks, laptops, and even PC’s eventually. If those markets go, so does their cash cow, Windows. That’s why they want to port the real Windows to tablets, instead of the much cheaper one WP7.L