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WP7 faces opportunities, challenges in Year 2

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Windows Phone 7 (s msft) is increasingly catching the eye of smartphone buyers but awareness is still a major hurdle in its bid to challenge iOS (s aapl) and Android (s goog). That’s the word from the NPD Group, which found that while Android is the top choice of smartphone owners, 44 percent of current and upcoming smartphone owners are considering purchasing a Windows Phone 7 device in the future.

That’s good news for Microsoft, which is poised to release a new Mango software update that should significantly improve the Windows Phone 7 platform and make it more competitive with Android and iOS. But WP7 is also facing an awareness challenge as it doesn’t seem to be on the radar for many consumers.

The NPD Group said 45 percent of consumers are still not aware of Windows Phone 7. The top reasons for lack of interest in WP7 is that people don’t know enough about the platform (46 percent) and ecosystem lock-in for consumers who have invested a lot in rival operating systems.

Android, according to NPD, boasts more interest from consumers than any other platform (63 percent) and is also the platform consumers were “most interested in” (36 percent). Android is sucking away attention from BlackBerry (s rimm) with one-third of BlackBerry owners saying they are most interested in Android for their next smartphone purchase.

The takeaway for Microsoft is that it has a ripe opportunity but it also has a big set of challenges. As I’ve argued in the past, a platform that can provide a polished experience like the iPhone has a good chance to succeed. Android has been the best alternative to date, but WP7 is now rounding into form and could draw away interest. But it has to raise its profile and get the marketing message out more. Where’s the next version of the “Really?!” ads?

Sales of WP7 devices have been less than what Microsoft has been hoping for CEO Steve Ballmer recently admitted and now pressure is mounting on Mango to kickstart sales. A lot will rest on carriers pushing WP7 as a third platform but with Microsoft’s purchase of Skype, the company will need to assure operators that it’s not trying to undermine their business with cheap or free voice calls.

Microsoft has to also fight through the app lock-in dilemma. Many iOS and Android users have sunk in a lot of money and time into apps and it’s not easy just starting over on Windows Phone 7. Give Microsoft credit for building up a solid library of apps but it still needs to also hammer home more of the app message, educating consumers that there are great apps on WP7 and that it’s worth the investment in a new platform.

As we approach the one-year anniversary of the WP7 launch, now is the time for Microsoft to get moving. It hasn’t been a great year sales wise but Microsoft’s done a lot of good work on the platform and app ecosystem to position it for a push in year two. And it’s got Nokia(s nok) preparing to churn out phones in the next year. It wasn’t until a year in that Android really started to take off. With interest growing in WP7, Microsoft has to hope that it can see a similar growth spurt. It’s going to be a lot tougher with Android entrenched at the top and iOS still a consumer favorite, but Microsoft can see the opportunity laid out in front of it. Now, it just has to seize it.

9 Responses to “WP7 faces opportunities, challenges in Year 2”

  1. So far I’ve only seen WP7 phones with 12 months old hardware. I don’t think that’s a matter of “choice” for the manufacturers. It’s simply how the WP7 ecosystem works. Since Microsoft wants to make sure there is only one chip that works for all phones, by default they will be 12 months behind everyone else, not just Android, but also the iPhone.

    So I doubt we’ll see a phone that can lure Android users to it anytime soon, and that’s especially true for iPhone users, who probably find it the hardest to leave the Apple ecosystem behind.

    • Four Moving Tiles

      The new Windows Phones will have no trouble keeping up with the top of the line Android phones. It’s not just about hardware, you also have to optimize your software for the hardware to get good performance. Android developers don’t take advantage of the top of the line hardware because the majority of Android users have very cheap low powered devices. Not to mention Android does a poor job controlling background apps and keeping them from draining power from the phone. The more apps you install on Android the worse the performance of the phone over time. iPhone and Windows Phone have much better looking apps and OS performance than Android because the software is so closely tailored to the hardware and they don’t give developers carte blanche to uses background resources.

      It takes a 1GB of RAM and a 1.5GHz dual-core CPU to get Android even performing close to a launch Windows Phone running Mango. People buying phones based upon specs alone and not actual performance/experience with the phone are making a big mistake.

  2. “Microsoft has to also fight through the app lock-in dilemma. Many iOS and Android users have sunk in a lot of money and time into apps and it’s not easy just starting over on Windows Phone 7.” Especially with the prices on the WP7 app store being so high!!

    • Not only that J, Nokia has alienated so many of its diehard smartphone customers that any super hardware they design may not be able to carry the impact to sway consumers back to the Win platform.

    • Four Moving Tiles

      Most of the apps, on Android especially, are free. And the ones that aren’t free were usually dirt cheap. It might be annoying at first to have to seek out the apps you’ve already downloaded on other platforms, but the apps also look much fresher on WP7 compared to Android. The new double-sided and multi-tile functionality for WP7 apps also really sets the phone apart from iOS and Android immediately. I don’t think switching platforms is as big a deal as people make it out to be. It’s not like Mac vs. PC which is a lot harder & more expensive to switch.

    • Four Moving Tiles

      The Droid itself wasn’t actually that great of a phone. The “Droid Does” marketing campaign is what made it seem so great. The focus on all the features that Droid had that iPhone didn’t is what helped set it apart. It was also really edgy and attention grabbing. Verizon does a great job running teaser campaigns that pique your interest before they start blasting the airwaves with actual product ads. Windows Phone needs a build up like that to get people excited.

    • The problem is that Nokia’s line of Windows Phone…phones, aren’t due for another year, as far as wide retail availability. That’s another holiday season that phone consumers will be taken off the market with two year contracts.