January 31, 2011, 8:25 PM —
When you launch a completely new mobile platform that you've built from the ground up, eschewing anything that's come before from every company (including your own), it's natural not to expect to dominate the market. If you believed you would, then you and your employees should probably invest in bulk supplies of certain psychopharmaceuticals.
But when you launch a new platform and it gets beat in the market by an earlier platform that you've discontinued... well, then you might need to invest in supplies of certain other psychopharmaceuticals (or just buy Eli Lilly, the makers or Prozac and a handful of other anti-depressants).
That may be on certain minds at Microsoft this week. The company had discontinued its somewhat antiquated Windows Mobile platform before this fall's release of Windows Phone 7. Yet, while WP7 garnered 2% of the market in a study by Canalys, Windows Mobile 6 garnered twice that at 4%.
The news follows reports that Windows Phone 7 hasn't been a break away success. The platform's launch was hindered by a handful of factors: launching on only GSM carriers, a lack of support for any legacy Windows Mobile applications, limited enterprise management options compared to its predecessor and other smartphone platforms, and a complete new interface and user experience that didn't include either multitasking or copy and paste functionality.
Microsoft has hidden the number of actual Windows Phone 7 activations, preferring to describe sales figures in terms of units sold to carriers and retailers.
While its tempting to interpret this news as a death knell for Microsoft's mobile ambitions, that would be somewhat unfair. The company very much realized that it needed a fresh start and began completely fresh with its mobile OS (something it might want to consider doing with its desktop OS). As a result, WP7 was one of the first truly revolutionary products to come out of Redmond in years, perhaps decades. Many of the concepts embodied in WP7 are unique, well thought out, and well executed. Despite disappointing initial sales, the platform does have a lot to offer (and would have more to offer if Microsoft would consider it as a tablet OS instead of Windows 7, which is badly suited to a touch interface).
That said, WP7 is a latecomer to today's mobile market and Microsoft needs to take these results seriously. The company needs to address some of the core concerns that lead to users opting for its now defunct Windows Mobile over Windows Phone 7 during WP7's launch quarter.
Those concerns include:
Enterprise management – One huge advantage Windows Mobile had was the tight integration with Exchange, ActiveSync, and Active Directory that made it second only to the BlackBerry in security and management. Windows Phone 7 lost a lot of those capabilities and they need to be reintroduced ASAP. IT managers are already overwhelmed at mobile management issues with BlackBerries, iPhones, Android, and a handful of smaller platforms. To get IT support is critical to Windows Phone 7's chances at success.
Apps – A robust app market is the hallmark of success in today's mobile space. Windows Phone 7 broke with all legacy Windows Mobile apps and hasn't developed a market nearly as broad as what Apple and Google have to offer. Microsoft is working at this, but the company needs to reassure consumer and developers that it can deliver a viable app experience.
Basic features – Some basic mobile (and desktop) OS features need to be included – and fast. Apple was able to stretch out copy/paste and multitasking till the company was ready to implement them in a very clearly defined way. Windows Phone 7 coming this late to the party doesn't have that luxury. People expect these features and Microsoft needs to deliver soon.
Cloud integration beyond Office – The new generation of mobile devices are all about the cloud. Be it a personal cloud service, a corporate one, or multiple clouds of both types, users expect that functionality and expect it to be both easy and free. Microsoft is moving in this direction and WP7 offers a lot of potential, but that potential needs to be realized.
Good marketing – This isn't so much a user concern but an area that needs to be addressed. Most consumers aren't certain with Windows Phone 7 is or what advantages it offers. That's ironic since Microsoft really went with a consumer focus in WP7 by integrating social networking, multi-player gaming, and media feature (the Zune Pass music subscription, in particular) into the platform. Yet that is almost completely missed in every marketing material (as is the inclusion of Office and integration with services like SharePoint and OneNote). Microsoft needs to learn quickly from Apple when it comes to articulating features and advantages to consumers in quick, easy to digest bites what the platform can do.
Overall, despite the lackluster sales and market share, I believe that Microsoft has something special in Windows Phone 7. If the company can bring some of the core features back on parity with Windows Mobile and other modern smartphone OSes and communicate that platform well to both consumers and IT, I think it could become something truly special. Otherwise, it'll end up in the tech dustbin next to its relative the Kin.