In a previous blog post I covered how Apple’s iPhone and Google’s Android phone operating systems were pulling away from the emerging second tier phone operating system providers Microsoft, Nokia and Intel. As these second tier players lose more and more market share these suppliers thrash their operating systems to respond to the competition.
As covered by Ashlee Vance in a well done NYT article, the stakes are high. Microsoft’s share alone moved down from 11.8% to 8.7% (according to Gartner) in a year, while smartphones with other operating systems are surging. Analysts expect more smartphones than PCs will be sold by 2012.
Microsoft’s strategy originally followed the Windows desktop in an effort to leverage the huge installed base and existing user’s “muscle memory” from using Windows every day – a great strategy in theory. The reality was a user interface that didn’t fit in the limited real estate and keyboard of a smart-phone user interface and sluggish performance based on the overhead-heavy Windows architecture. This strategy has backfired, and now Microsoft is moving to mimic it’s Zune music player.
Microsoft has its work cut out for it. Can the company develop a strategy that keeps them competitive without leveraging the installed base of Windows? Is the Zune interface really the one to mimic? Microsoft is also pushing to control the headset design that uses its operating system, a business tactic that is bound to get some push-back from smartphone suppliers.
From a strategy standpoint, Microsoft’s strict adherence to software worked well with a PC architecture, where it dominates. It does not transfer to the smartphone environment. Apple has always controlled both the hardware and operating system, giving it total control of the user experience. Google, with its Android operating system, is following the same course of action by developing its own hardware platform while making the operating system widely available to other handset suppliers.
Stay tuned. As Microsoft’s strategy unfolds I’ll continue to blog about it.
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While Microsoft’s recently announced Windows Mobile 7 OS is receiving excellent response and reviews, the early announcement of new operating system – at least six to nine months ahead of its availability – demonstrates the desperation on the part of the company to increase its presence and impact in the increasingly important mobile-phone business. Surely, it seems a do-or-die situation for Microsoft (thanks to the failure of its current OS) in mobile phone market, this early announcement of the platform may turn out to be a tactical mistake. On one side, the early look at this new OS gives competition time window to match up or even exceed the features and capabilities of the new Windows Mobile OS. On the other side, this may have unintended effect of annoying smartphone makers – mainly because based on this announcement consumers will be encouraged not to buy phones with current Windows OS till the launch of new platform. Microsoft desperately needs the support smartphone makers to get back in the game and tactically they have already done much to generate enough push back from smartphone suppliers, any more negative attention from phone makers can be counterproductive for Microsoft.
Microsoft’s strength and probably one of the strongest advantages it has in this mobile business is that they already have a large user base running Windows products on PC’s. If only Microsoft can tightly integrate its Mobile 7 platform with their Exchange, SharePoint, Remote Desktop, Office, and Communicator like applications, then they just might have a strong chance here.
I also believe that Microsoft, should not attempt to play in the Iphone / Android space, but focus more on the business – BB – space. It is very hard to visualize aa “Windows” machine, running cool and funky applications and games as with the iphone. However, if they plan to market the windows 7 as some “hip / gamer / trendy” platform, they should have probably thrown the word “Xbox” somewhere in their outbound marketing and probably not use the “windows 7″ name at all.
Lastly, Microsoft, as mentioned by Mihir, should really focus on keeping the phone manufacturers happy. Adding special customizations is definitely NOT the way to go. They should learn to work with the constraints of the mobile device and not try to add custom buttons and other elements to support their interface. MS trying to add hardware interface items to their phones just appears to me as a sign of weakness from their interface designers.
Thanks
Kareem Seddik
I believe the smartphone market still has plenty of potential to grow. Isuppli.com estimates that fewer mobile handsets will be sold this year but the smartphone market is expected to increase ( http://i.cmpnet.com/eetimes/eedesign/2009/chart1_030409.gif ). The smartphone Operating System market is pretty crowded with apple, RIM, Palm, Android and Microsoft. Apple has the lead with 25 million units out of the 250million but most of the unit sales are in the US. The global market shows a different pattern ( http://www.gartner.com/it/page.jsp?id=1306513 ). Android has gained a lot of market share in just one year. Two best performers are Android and Apple.
The number of smartphone users is expected to increase 4 times by 2013. I beleive there is still plenty of growth in the market for another type of OS. Besides, the smartphones get replaced a lot faster than laptops or desktops.
I’m not sure that Microsoft is trying to detach from its huge install base of Windows machines as stated in this blog post.
“Can the company develop a strategy that keeps them competitive without leveraging the installed base of Windows?”
Their mobile strategy is tightly integrated with what they call their “Three Screens and a Cloud.” They are seeking to dominate the PC market (Windows 7 – done), the TV (xbox), mobile (Windows Phone 7), and then cloud computing (Software and Platform as a Service).
Not only are they creating tighter integration with their operating system, but also across the rest of their platforms.
For instance – they are putting elements of xbox Live on the Windows Phone, as well as the Zune Marketplace, productivity apps. The idea is that you can go from your PC to your phone to your TV screen via the cloud. This spans from productivity applications such as office, SharePoint, exchange, dynamics, to their gaming solutions. They have an enviously large breadth of products that Google and Apple are playing catch up with. Their problem in the past has been lack of integration. Clearly they are rushing towards fixing this. Not only are they leveraging their OS, but by creating tighter integration with other products, leveraging those as well.
Their revamp of the user interface is also interesting. They are building Windows Phone 7 (WP7) from the ground up, because the Windows Mobile platform was a huge failure. They are also doing some unique things such as the “hubs” within the WP7. This more “consumer focused” approach, while also making it easier for business users, will be a key to success. Despite dismal market share of the Zune HD – people have lauded its interface.
Quote from Engadget, “Still, it competes, and for Microsoft and the Zune brand, that’s a major leap forward.” – http://www.engadget.com/2009/09/17/zune-hd-review/
As far as putting in a high bar for minimum specifications on the platform – this is the right thing to do. One of the problems for developers on the Windows Mobile platform was that it was hard to develop for since there was such a huge disparity between phones. This came in the form of screen size, processing power, memory, and other features (multi-touch, accelerometers, GPS etc). I realize this might put some pressure on handset makers – but they are really trying to woo the developer audience. This is one reason why Apple has been so successful – because of a standardized platform – for a consistent developer experience – which maximizes the number of users in the install base that can buy the app (what developers care about!). One could argue they only need one or two really cool form factor phones – look at Apple – they only really have one and are a wild success.
Another thing they are doing is making the developer experience consistent across platforms, enabling folks to code for xbox, PCs and the phone via Visual Studios. I think this is a huge key – because not only does it allow developers to create applications for the phone, but also the PC and xbox. We know developers flock to where the install base is the largest – and by far – Microsoft has a hold on the PC market.
Again – they are not developing this WP7 platform or their mobile strategy in a silo. They are 1) making it cool (zuneish), and 2) tightly integrating it with their other offerings (Operating system, Xbox, Cloud). One needs to look at the WP7 platform in the context of their “Three screens and a Cloud” strategy. Personally I think they have a very compelling story here – and are doing the right things to maximize chances of their success.
I have to agree with Kareem, I will admit that I use my iphone and i really have no intention of switching regardless of what new OS comes out, I believe that MS should try their best to integrate into their install base and give the business users a sharp easy to use interface that works better than the current solutions.
I’m not saying that they should completely ignore the consumer market but the fact of the matter is that it would be easier to penetrate the business space and create an ecosystem within their current software that will make companies want to switch from RIM.
Reynaldo Garcia
Windows Mobile was a huge failure, so expectations were low for Windows Phone 7 series to begin with. I believe success of this product will depend mainly on how effectively Windows applications are integrated into the Mobile 7 platform. Poor integration was the main issue with Windows Mobile. Additionally, ease of use and user interface will be key. I personally think that Windows will not be able to compete head-on with the established market leader in the consumer market, the iPhone. Targeting the business market with solid integration with leading Windows applications could be a good strategy for Microsoft. Also, on a related note, what is with the name Windows Phone 7? Couldn’t they have come up with something more creative and appealing?