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Thread: Microsoft (Decline Of)

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When you have eliminated the impossible, whatever remains, however improbable, must be the truth.

Microsoft Windows Phone Seven


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Date: Wed, 20 Oct 2010 21:39:42 +1000

Windows Phone Seven seems to be the current hot Internet topic. Blogs every where proclaim headlines such as ... "Microsoft Ups The Ante!" ... "Microsoft Gambles On WP7!" ... "Windows Phone 7 Has Arrived!" ... And "Old Spice Guy Promotes Windows Phone 7!" (Huh?) ... Try googling for any of those phrases and you will find lots of matches. (Facebook users might try "binging" for them).

Overall a considerable amount of money has been spent on the latest Windows Phone Seven campaign. The Microsoft war chest is stuffed full of cash not just from their extraordinary profits but from all that cheap money the Fed is still pumping into the US economy. Windows Phone Seven has a big advertising budget that some bloggers estimate at half a billion dollars. Microsoft have even given out Free Phones to their employees and to attendees at conferences.

In addition to this, they have hired some developers to create "Apps" for the Windows Phone and they are doing their best to persuade other developers to come on board. And the hype from Microsoft is that they are ready to go head-to-head with the iPhone.

However, there is an important distinction between iOSX and mobile operating systems such as Windows Phone Seven. Microsoft rely on third party manufacturers to build the handsets. Apple, on the other hand control the entire distribution channel. However, it seems that Microsoft would also like to have more control of the hardware and presentation of their product. For Windows Phone Seven they have stipulated form-factors, types of screens, even the number of buttons and menus that manufacturers can use. The reason they have taken a more proscriptive approach was to limit the amount of testing, and to unify branding and simplify marketing of their mobile platform.

All of this and comments made during the launch suggest that Microsoft hope that the Windows Phone Seven will be able to compete with the iPhone. However, it may not be enough. Microsoft's attempts to establish better control of the hardware and development environments appear half-hearted when compared to the rigid control Apple have established over the entire manufacturing process of their product, including hardware and software. This control is so tight it is almost a dictatorship (Some third party developers complain that it is a dictatorship!).

Ironically, Apple's totalitarian regime may limit their opportunities in the fiercely competitive mobile computing market. It might even be the primary reason that the Android operating system has already caught up with Apple and now surpassed them. Android has overtaken the iPhone, despite the huge lead Apple had established by being the first to market and the first to get developers on board.

And in fact, this is the argument put forward in a recent article in the New York Times' Technology Pages, by Miguel Helft, titled "Will Apple's Culture Hurt the iPhone?". He draws parallels with last century's battle between Macs and Microsoft PCs, which Apple lost because Microsoft and third party developers created a loose but inexpensive coalition of software that provided too much competition for the more rigidly controlled Mac.

But that was last century. When it was the PC vs the Mac. So it may not be appropriate to draw too close an analogy. Today the two contenders seem to be Android and the iPhone. In fact it is a little more complicated because the established player, Nokia, is still trying to cling to their base -- Although many commentators discount Symbian phones because they are not very "smart". Also there are other smaller players such as RIM and Palm.

Still, if we do consider the main competition for the smart phone market as being between Android and the iPhone, there is considerable difference between the objectives of these two protagonists. Last century, the battle was about ownership of the real-estate on top of workers' desktops. Microsoft and Apple were both selling proprietary software to occupy that space. Apple owned their own hardware and Microsoft did not. Apart from that Microsoft and Apple had similar objectives. This century's battle is for virtual real-estate that exists only as electrons or as vague unfulfilled desires in the minds of consumers. The two approaches form stark contrasts. Google propose that open source solutions are reliable, inexpensive and efficient. They say that this will make the Internet work better. And also they (Google) will be able to distribute applications and software more efficiently because they don't actually own the distribution channels. Apple propose the exact opposite of this. They say that their total package is more tightly integrated, secure and efficient because they own the entire distribution channel.

One of them must be wrong.

The battle of these two paradigms will be important in determining the future of mobile computing and the Internet. The real problem for Microsoft is they don't know where they fit between these two paradigms. Ideologically Microsoft agree with Apple. But if they wish to compete with Apple, then strategically they might attempt to agree with Google's position.

To Microsoft this would seem a Hobbesian choice. Perhaps because of this conundrum they are trying to manoeuvre into the almost non-existent middle ground? When arguing that Microsoft has an advantage over Apple because they are not restricted to specific manufacturers, models and networks, Microsoft CEO Steve Ballmer was trying to imply that Microsoft was closer to the open source position which relies on third parties and open standards only. And then, when he said that Androids have too many models and are too diverse, and Microsoft has the advantage of a single unified "Microsoft ecosystem", he was trying to say that the Microsoft phone was a bit like the totalitarian Apple product. But, in trying to establish their own identity, he has tried to argue that Microsoft is actually like neither of their rivals.

In the end it all comes across as rather confused and desperate. Microsoft certainly has lots of money to put into the campaign. And with their bulk they should be able to negotiate with network providers and to a certain extent dictate their requirements to third-party manufacturers. However, apart from the integration with Xbox, the current campaign seems to lack a coherent direction. Microsoft have kicked it off by giving away free phones to promote their product. Contrast this with Apple's new product launches, at which people queued up to buy the product! Google of course give their OS away to anyone who wants it ... But that's because it is Free!

Lastly, there is Microsoft's belief and trust in their own brand, which although endearing is misplaced. Considering the success Microsoft achieved by re-branding the appalling Vista as "Windows Seven", it is surprising that the idea didn't occur to anyone in the marketing department that the entire Windows Seven rollout might have gone even better if they had dropped the word "Windows" also? The computing experience of Microsoft desktop users has not been a happy one. They words Microsoft and Windows are associated with computer viruses, strange software failures, machines crashing unexpectedly, viruses, spam, phishing, viruses, unhelpful help, viruses, lack of support ... Oh and did we mention viruses? It is hardly an experience that will endear consumers to the Windows brand. Your blogger humbly proposes that "Windows Phone Seven" would also fare better if it was re-branded to something entirely devoid of either of the toxic words "Windows" or "Microsoft".

Just as Microsoft's devotion to Windows has undermined their efforts in cloud and search technology, so their fervent endorsement of Windows for the mobile phone could be the very reason they are losing their grip on that market. And advertising Windows, as if it was a selling point, is probably counter-productive.


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