Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
Microsoft Corp. has a lot riding on the upcoming release of its Windows Phone 7 devices. After a decade of languishing Windows Mobile phones and an embarrassing launch of the Kin, Microsoft is way behind in the mobile race. And mobile has been identified by Redmond, and its key competitors, as a critical battlefield for the future.
Windows Mobile, the outgoing smart phone operating system punted by Microsoft which is burdened with legacy code generated for 1997-era personal digital assistant devices, is a laggard next to its competition of Apple Inc.’s iPhone and those powered by Google Inc.’s Android OS. But from all appearances, the new OS that Steve Ballmer and AT&T’s Ralph de la Vega will launch in New York and London on Oct. 11 will finally be a radical departure from the PDA OS of old. According to Microsoft at their announcement at this year’s Mobile World Congress event, the new OS is entirely new work, based on their consumer-friendly Zune look-and-feel. In Barcelona, they would not let anyone touch the devices, but recently, it hasn’t been that hard to get your hands on a prototype device (these are not our friends in Cupertino, after all.) I played with a Windows Phone 7 at the recent GigaOm Mobilize event in San Francisco, and was pleasantly surprised.
The phone was highly responsive; the user interface was entirely modern, finger-based. Gone are the tiny stylus boxes for options, and the deep, deep, deep settings menus. The UI had a measure of simplicity I am not used to seeing from Redmond. The active date on the home screen is nice, and the widgets on the home page are customizable. Although I did not notice significant innovation, all of the table stakes required to participate in 2010’s smart phone game were there. Full mobile Office including Exchange sync, Outlook notes. And OneNote is a bonus, as is the Xbox feature, which will appeal to gamers. I have to say I was surprised by how good the phone felt as I poked through the features and menus. However, I didn’t load it up with apps, customizations, and contacts, which can often bog down a weak phone, and trigger crashes. We’ll have to wait to see how it measures up in the real world.
That said, the most interesting thing about this phone, for me, is the positioning. I’ve read and heard a lot of discussion around the fact that the UI is “consumer-focused.” I’ve read analysts talking about how tough it will be to go after the consumer space dominated by Apple, and now the growing Android. I’ve even read that Microsoft is making a mistake by not focusing on their strongest base: enterprise purchasing, where security, IT policy management, sales relationships, tie-in to Exchange server, and Office is what really matters. I think those analysts have yet to put two and two together. Why should we assume that a consumer-friendly UI means the phone is consumer-focused? Have you learned nothing from iPhone? Everyone is a consumer!
We’ve know enterprise IT managers are loyal to relatively boring phones such as Research In Motion Ltd.’s BlackBerry and the outgoing Windows Mobile. They have their legit corporate reasons. But lately, the consumer-targeted phones from Apple and Android have been so very compelling that employees are rebelling. They are purchasing iPhones on their expense accounts, they are bringing in their own devices, and they are carrying two phones – all so that they can participate in this revolution that is the mobile Internet.
IT managers are in a really tough spot – they want to offer enterprise-grade devices, but their clientele want fun, useful phones. Tough problem. Is there a solution? Hey, what about an enterprise-grade phone with all the features that let IT managers sleep at night, but one that had a user-friendly UI skin on it, too. And maybe some cool apps, social networking, media, and a gaming tie-in? Would that not have broad market appeal to consumers and enterprise … and especially those consumers whose phone is purchased by an enterprise?
Basically, if Microsoft can pull this off, they’ll have the phone that is the reverse mullet: Party in the front, business in the back. This phone won’t defeat iPhone for pure consumer users, but it could be the best compromise solution on the market for businesses. And that can command market share. The company most under threat from a successful WinPho7 has to be RIM. If RIM remains perceived as “strictly business” where Microsoft is able to “mix business with pleasure”, we might see Ballmer mowing Balsillie’s lawn, if you know what I mean.
Derek Kerton, principal analyst and head of the wireless practice for the Kerton Group, a consulting firm focused on advanced telecom, is also the chairman of The Telecom Council, an association for global telco executives and their ecosystem counterparts. Internationally recognized for his telecom industry insight, he consults for companies throughout the telecom value chain (NTT DoCoMo, SKTelecom, Disney, ESPN, Sony…) and the financial community on the telecom market issues (Credit Suisse, Merrill Lynch, Dow Jones, Morgan Stanley…). Mr. Kerton also sits on several advisory boards, is frequent chair and moderator in telecom industry conferences globally, and is quoted, published and interviewed globally on CNN, CNBC, BloombergTV, and Wall Street Journal. http://www.kertongroup.com.
