Is Microsoft’s Smartphone Making Dumb Moves?

Is Microsoft’s Smartphone Making Dumb Moves?

Ross Rubin

Many major technology product introductions incur delays, and Microsoft is as notorious for them as anyone. However, the company’s attempt to bring its Smartphone design to market—it’s currently being sold in Europe as the Orange SPV (sound, pictures, video)—has been one of its greatest recent tribulations. Not only have wars been fought throughout its development period, but it also incurred a black eye from a partner that very publicly defected to join rival Symbian’s camp.

Although the product finally seems to be ambling toward its native land via at least one agreement with AT&T Wireless and a less-specific one with T-Mobile, Microsoft’s lack of progress is reflected on its own Web site. If you’re quick enough to read this column before Microsoft does, clicking “See the Smartphones coming soon” will reveal just one model.

At least in theory, it’s easy to see how Pocket PC, Phone Edition, would curry favor among corporate-IT types who want to take high-powered mobile apps (including some of the best games on a mobile platform today) with them. Why bother with the Smartphone, a product that faces the additional challenge of an untested form factor?

Microsoft acknowledges that the “newness” of the Smartphone has been a problem, and getting the delicate balance of software, hardware and network functionality right has caused some of the delay in bringing the phone to the United States. However, more of the overall resistance may be due to practical and strategic issues endemic in the product itself.

From the scant reviews and U.S. beta-tester feedback I’ve heard, Microsoft seems to have put together a pretty spiffy package with the Orange SPV Smartphone. Its features include the clever and useful (Smartdial); the tried-and-true (T9 predictive text input); the check-off throwaway feature (infrared beaming); and the fanciful eye candy (lush-looking games). But in a market that relies on slavish devotion to the carriers, its easy to see why Microsoft’s vertical integration and platform approach is harming it.

On the plus side, Microsoft seems to have done a nice job with the user interface; it now has a few years of compact UI experience under its belt and seems to be moving steadily toward accommodating lightweight devices. Outlook integration will be attractive to a certain segment of the market. For these benefits, though, you must also accept a lot of bundled technology that isn’t leading the market—ActiveSync, MSN Messenger and Windows Media. Ultimately, this makes it a less appealing product to carriers that, for example, have embraced handsets that support AOL Instant Messenger for the desirable youth segment.

It’s unlikely as it is that Microsoft will bend on implementing its own technology, but according to Ed Suwanjindar, lead product manager of Microsoft’s Mobile Devices Division, “Our whole approach to the wireless market is to give mobile operators the ability to customize their products to specific audiences and is designed to allow mobile operators to customize the software to suit their brand and any additional add-ons.”

Then there’s the taller order that the Smartphone’s genetic code comes from its dominant parent. In most markets, like video games, Microsoft simply has a hard time breaking in. (It decided to go it alone on the Xbox after it couldn’t find a hardware partner.) In the mobile-phone space, though, handset developers have proactively blocked Microsoft’s entry by investing in Symbian, which has expanded its purview to just about anything that rings. One way Microsoft is trying to counter this move is by allowing carriers to brand the devices themselves, a strategy that has worked for the far-less-resourceful Danger and that circumvents the Symbian cabal.

Part of the problem may be that the beefy hardware requirements of Pocket PC have forced Microsoft to create a separate platform for this physically and computationally lightweight device. (This is in contrast to Symbian and PalmSource, which provides older versions of their OS for less powerful handsets.) The Smartphone has been feeling the squeeze of category crowding up to now, but it could be poised to explode as it disappears as a category. I’ll write more about the shifting silicon of the Smartphone market in an upcoming column.

Can Microsoft recover from its miscues in the Smartphone market or has it missed the boat? E-mail me.

Wireless Supersite Editor Ross Rubin is a senior analyst at eMarketer. He has researched wireless communications since 1994 and has been covering technology since 1989.

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Copyright © 2003 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in Wireless.