At a press event in New York today, Microsoft officially launched its updated mobile operating system dubbed Phone 7. Devices based on the new operating system will be available from Dell, HTC, LG, and Samsung. Phone 7-based devices will be marketed through carriers around the world including AT&T and T-Mobile in the US and Telus in Canada, and should be on the market for the holiday buying season.
According to Microsoft CEO Steve Ballmer, "Microsoft and its partners are delivering a different kind of mobile phone and experience--one that makes everyday tasks faster by getting more done in fewer steps and providing timely information in a 'glance and go' format." In an analyst's call, Paul Bryan, Senior Director of Product Management, hit on the same theme and described current mobile interfaces as "the wall of icons."
Coming out of the gate, Phone 7 will be facing stiff competition in the consumer smartphone space from the likes of Apple iOS and Android (see Table 1). Microsoft hopes to get a leg up by linking to other parts of the Microsoft product line including Xbox live, Zune, Windows Live, and Bing and by working with established Microsoft partners like game maker Electronic Arts (EA). Clearly they are hoping to do better with Phone 7 than they did with the Kin, a Microsoft smartphone optimized for social networking that was pulled 2 months after its introduction.
Do You See UC?
The logical question for any enterprise mobile buyer will be: so what difference does this make to me? With the move to unified communications (UC), one of the key elements will be the ability to extend that rich communications/collaboration environment to mobile devices. With Microsoft's leading position in UC, a tightly-coupled interface to the mobile environment could help establish Phone 7 in the enterprise market. We have certainly seen that type of synergy with Google’s Android and its connections to other parts of the Google ecosystem.
It doesn't look like we're going to see any of that from Microsoft, though. When asked about plans to support a Lync client on Phone 7, the Microsoft moderator first had to spell "Lync", and then the presenter, Mr. Bryan, identified it as an API. That's right, the Phone 7 crew didn't recognize the name of Microsoft's own UC product. My regular readers know that I’m not above going for a cheap laugh, but some things are just sad. This is most disconcerting when it comes to Microsoft’s performance in mobility. The legacy Windows Mobile operating system (i.e. up to Release 6.5) was a virtual no-show in the consumer space, but it did find significant acceptance in enterprise mobility. Given its flexibility and easy developer environment, there were any number of enterprise applications built for PDAs (e.g. HP iPAQ) and mobile computers like the Motorola/Symbian product line. None of those legacy applications will run on Phone 7 without significant modifications, so Microsoft is apparently looking to make a clean break with the moderate success they had in mobility in the past.
The consumer acceptance of Phone 7 could have some impact on enterprise purchasing. One of the trends we have seen shaping enterprise smartphone selection is pressure from users to support their preferred devices. That pressure has clearly been a factor in the increasing enterprise support for iOS and Android in enterprise environments. Is anyone going to be screaming for Phone 7 support?
Conclusion
While it might be hard to believe given their relative market shares, Apple’s market cap now exceeds Microsoft’s by roughly $50 billion, and Goldman Sachs recently downgrading Microsoft's stock from "buy" to "neutral". Success often comes from knowing which fights to pick, and in this case Microsoft may have been better off going after RIM and leaving the consumer market to Apple and Android. A quixotic thrust at a high-risk consumer market seems to offer a low probability for success and a high likelihood of embarrassment.
In the meantime, Microsoft is poised to reshape the enterprise communications market. By all accounts, Lync (formerly "Office Communications Server") is the leading unified communications platform--yet their own employees in a key division don't even recognize the name. Trust me, Phone 7 is not popping Microsoft into Gartner's Magic Quadrant for mobile operating systems, a position they clearly hold for UC.
If you're Microsoft, does it make any sense to turn your back on that and try to capitalize on the overwhelming success of the Zune?
