The oft-renamed Windows mobile phone platform has never matched the glitz of the iPhone or BlackBerry. But is that about to change?
Among smartphone users, Windows Phone – the handset operating system formerly known as Windows Mobile – tends to not to provoke excitement. This is a space dominated by flashy handsets such as the iPhone, now in its third incarnation – with its OS X operating system also at 3.0 after just two years – and by buzz about new operating systems such as Google's Android and the Palm Pre's WebOS.
Worse, Microsoft has had to play catchup to Apple, Google, Palm and even RIM, introducing an "app store" for Windows Phone after its rivals had done so – and after insisting that nobody was making much money from Apple's iPhone App Store. In January 2007, its chief executive, Steve Ballmer, dismissed the iPhone as "the most expensive phone in the world, and it doesn't appeal to business customers because it doesn't have a keyboard, which makes it not a very good email machine". In fiscal 2008/9, the iPhone sold 20.4m units – compared with an estimated 18m Windows Phone licences. (Microsoft has not given numbers for the year, but has not said they were any higher than 2007-08.)
Call for more style
In short, Windows Phone has an image problem – which has not been altered by rebranding it.
Besides the endless name changes (from PocketPC to Windows Mobile to Phone), the Windows phone platform has been regarded as a dull tool for corporations instead of a strong player in the consumer market, and its user interface has never been much to write home about. Third-party vendors have gone so far as to build their own front ends to hide its perceived ugliness, though offerings such as HTC's Touch-Flo haven't always been an entirely good thing, placing a further burden on the phone's CPU.
Yet Windows Phone is the determined tortoise of the smartphone world, having been around since 1996. Microsoft hopes that its next version – snappily named 6.5 – will end its reputation as a plodding also-ran and spur it to catch up with flashier hares such as the iPhone and HTC Hero.
But is it enough? Roberta Cozza, principal analyst with Gartner, says no. "It's too little, too late. WinMo has been struggling in the consumer market. 6.5 is a small improvement in the look and feel, but it's not comparable with efforts from other vendors."
The irony is that what had seemed like a sure thing – aiming a mobile form of Windows squarely at the business users who had it on their desktops – has turned out to be a mistake.
At its core, the OS offers enterprise solutions such as Office apps and support for Exchange, Microsoft's email and collaboration application. This has made it popular with corporate IT departments; consumers, however, have been less impressed. And the BlackBerry was already there to grab market share.
All this is changing, says James McCarthy, Microsoft's business manager for mobile communications. The next release, probably in September, "pays real attention to the consumer". Certainly, the new look places it much more firmly in the arena with the iPhone and LG Viewty.
The whole interface has had a makeover, aimed at making it much more intuitive and finger-friendly. Until now, using Windows Mobile has tended to require a stylus – fiddly, easy to break and to lose – because the screens on the devices have been small and packed with information.
A lot of care has been taken with the home screen. There's no need to drill down to an application: if it tells you you have an email, you can launch it right away.
Microsoft will also launch a series of related products, from an app store to MyPhone, an online backup service that already works well in beta.
Perhaps the most important thing for any smartphone is the ecosystem that grows up around it. Apple's App Store for the iPhone registered 1.5bn downloads in its first year, and rivals quickly followed: RIM, which makes the BlackBerry, has its App World, Nokia its oddly named Ovi World, and there's the Android Market for handsets running Google's Android. "It's a battle of the ecosystems," says Cozza. "Microsoft needs to come up with a strategy around an application marketplace."
Microsoft had left the apps business to partners such as Handango, but now would argue that it's doing precisely that. With its app store Windows Marketplace for Mobile (it's rubbish at names), it understands that it must offer at least some apps when it launches 6.5. There will be 20,000 available, and McCarthy says "We're busy making sure that they work with the handsets – there's a ton of work going into that."
Consumer challenge
The key question is whether Microsoft can be a big player in the consumer space. The figures suggest it has some catching up to do. According to Gartner, Windows Mobile has a steady 10% or so of the OS market – competing against proprietary Sony Ericsson and Samsung systems, as well as Symbian, which runs on Nokia and some other phones, and the offerings on the BlackBerry, the iPhone, Android and Palm. Its share of the smartphone market has fallen as the iPhone has wormed its way into corporations, by licensing Microsoft Exchange so that it can handle ActiveSync push notifications and calendaring.
However, says US-based analyst Michael Gartenberg, "of course it's not late to the party". He reckons that the new version of Windows Mobile will "have a lot of appeal to consumers" and that it "builds on a solid foundation". Gartenberg, vice-president of strategy and analysis at Interpret, argues that other smartphone manufacturers still cannot match Windows Mobile as a business offering.
With a Windows Mobile phone, he says, you can not only take pictures and keep up with Facebook and Twitter, you can also edit a Microsoft Word document or an Excel spreadsheet and then email it to your colleagues – which you can't (yet) do with an iPhone. Business people who need that are also consumers who want to keep up with their social networks, he notes, adding that Windows Mobile offers the best of both worlds.
Cozza concedes that Windows Mobile is "a strong platform for enterprise", but adds that for a smartphone to succeed, it needs to blur the dividing line between business and consumer users. RIM, with the BlackBerry, has done that smartly, she says.
But, counters Gartenberg, Windows Mobile already does that. What Microsoft needs to do now is to tell the story of its latest version of the system. "There's a lot of negative perception about WinMo," he says, adding that there's everything to play for.
"Six platforms can't survive," he says. "The battle is hardly over yet. "Cozza is more cautious: "We will have to wait and see," she says.
