Microsoft's week marked the start of the company's huge Windows Phone push, a new online ad deal, and a twist in a long-running battle with Barnes & Noble over Android.
Microsoft started its huge Windows
Phone push this past week.
On Nov. 7, the company unveiled a
six-story mockup of a Windows Phone in the middle of New York City's Herald
Square, which attracted its own share of media attention. New Windows Phone
devices, loaded with the wide-ranging Mango update, will appear in stores over
the next few weeks. Microsoft executives are talking up the platform as ideal
for both businesses and consumers.
For Windows Phone, it's very much
do-or-die time. In the year since the platform's initial release, it has failed
to carve off substantial market share. It continues to face robust competition
from mature platforms like Google Android and Apple's iPhone. And most of its
manufacturing partners, with the exception of Nokia, have a vested interest in
promoting other smartphones in addition to Microsoft's products.
In a bid to counter those headwinds,
Microsoft is pumping enormous amounts of cash into its development and
marketing process. It is also betting heavily on Nokia, which abandoned its
homegrown operating systems such as Symbian in favor of Windows Phone. Despite
its falling market share in the wake of that decision, Nokia continues to enjoy
significant presence on the global stage, which Microsoft hopes it can leverage
into far greater Windows Phone adoption.
Part of Microsoft's overall strategy
also involves expanding Windows Phone beyond its current high-end niche and
into the midmarket. "We are dramatically broadening the set of price points in
Mango-related phones that we can reach," Andy Lees, president of Microsoft's
Windows Phone division, told the audience during the Asia D conference Oct. 19.
"That's particularly important because going lower down in price point opens up
a more addressable market."
Microsoft has loosened its minimum hardware requirements
for the platform,
with its hardware specifications now listing "primary camera" and "front-facing
camera" under "optional hardware." The rest of the "standard hardware" remains
much the same, including three hardware buttons (start, search and back) and an
accelerometer. Those specifications were last updated Sept. 23.
Nokia plans on offering a midmarket
Windows Phone, the Lumia 710, to complement its higher-end efforts.
Microsoft's Windows Phone strategy
extends to pumping up its executive bench. On Nov. 7, the blog Boy Genius Report
posted news that Gavin Kim,
formerly Samsung's vice president of consumer and enterprise services, had
become Microsoft's general manager of the Windows Phone team.
"I will be responsible to help set the
future direction for the Windows Phone platform and to accelerate Microsoft's
trajectory to win the hearts and minds of consumers, carriers, device
manufacturers, developers and partners," Kim told BGR. "In my experience, there
is an already fervent base of Windows Phone supporters out there and they all
Microsoft's recent partnerships haven't
been limited to Windows Phone. On Nov. 8, Reuters
reported that the company had entered
into an advertising alliance with AOL and Yahoo.
However, Microsoft declined to frame
its deal as a response to online competitors such as Google. "Other players in
the industry are welcome to join us," Rik van der Kooi, corporate vice president
of Microsoft Advertising Business Group, told the news service. "This is not in
response to anybody in particular."
Under the terms of the agreement, each
of the three companies can sell premium display ads belonging to the other two.
That will allow the trifecta to more efficiently unload premium advertising
inventory, although their competition over advertiser spending and other
segments will continue apace. Although Microsoft's product portfolio gives it
diverse streams of revenue (in contrast to Google, for example, which depends
on advertising for an overwhelming percentage of its bottom line), its recent
emphasis on Web and cloud services makes advertising a more prominent concern.
However, Microsoft's week wasn't all
product pushes and partnerships: The company also faces a potentially
complicated issue related to its Android-licensing push.
For the past several quarters,
Microsoft, insisting that Android violates certain key patents, has offered
Android device manufacturers a choice: Pay us royalties for each unit you make,
or risk a lawsuit. So far, it has locked 10 manufacturers into agreements, but
Barnes & Noble, which produces the Android-based Nook e-reader, has opted
to battle the matter out in court.
According to Bloomberg
, an Oct. 17 letter from Barnes &
Noble to the Justice Department describes Microsoft as "embarking on a campaign
of asserting trivial and outmoded patents against manufacturers of Android
devices" in order to "drive out competition and to deter innovation in mobile
Whatever the outcome of this attempt to
launch an antitrust probe, the two companies' patent-infringement battle will
begin February 2012.
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