Lagging in Tablet and Smartphone Arenas
Despite earning hefty revenues from traditional product lines such as Windows and Office, Microsoft has found itself under fire from analysts and pundits who see the company lagging behind Google and Apple in the increasingly important areas of tablets and smartphones. In a bid to reverse its declining market share in mobile, Microsoft fast-tracked Windows Phone 7, a smartphone operating system expressly designed to counter Apple's iOS and Google Android. Unlike the latter two operating systems, based on gridlike screens of individual apps, Windows Phone 7 consolidates applications and Web content in a series of subject-specific Hubs. Microsoft's launch was fairly broad-based, with nine phones on 60 mobile operators in 30 countries.For his part, Ballmer used his keynote to tout everything except smartphone sales numbers. "There are already more than 5,500 apps available to customers," he said. "More than half our customers downloaded a new application today." He also insisted that Microsoft will continue to invest "aggressively" in the platform, and confirmed that a series of updates will be pushed automatically to users in the next few months. Those will include "copy-and-paste and significant performance improvements when loading and switching between applications." He added that Windows Phone 7 smartphones, currently available only on GSM-based networks such as AT&T, will appear on Verizon and Sprint in the first half of 2011. But Windows-powered tablets remained conspicuously missing from Ballmer's keynote. Ballmer's 2010 keynote included the revelation of three consumer tablets, including one built by Hewlett-Packard. Although his unveiling of Windows-based tablets predated Apple CEO Steve Jobs' revelation of the iPad by a couple of weeks, Microsoft found itself outpaced in the tablet arena throughout the rest of the year: While the iPad went on to sell roughly 1 million units a month following its April release and manufacturers such as Samsung rushed to embrace Android-based tablets, Microsoft remained largely out of that game. As summer gave way to fall, Microsoft executives started talking about how Windows tablets were indeed in the works-once an upcoming generation of mobile-centric Intel chips allowed for devices with superior battery life and sufficient processing power. HP made good on predictions of a Windows-based tablet with the Slate, but that product-billed as primarily for the enterprise-appeared very much a limited-run device. In the weeks preceding Ballmer's keynote, rumors circulated that he would use the event to unveil a series of Windows-based tablets to compete against the iPad and tablets like the Samsung Galaxy Tab. Instead of tablets, Ballmer and Microsoft Corporate Vice President Michael Angiulo demonstrated a series of Windows 7 PCs with touch capability, including an Acer laptop with a second touch screen in place of a keyboard. They also showed off Surface 2, the next generation of the company's table-sized touch-screen tablets. The new version runs Windows 7 and is fronted with Gorilla glass.
That user interface earned mostly positive reviews from critics, and Microsoft claims that manufacturers have sold some 1.5 million Windows Phone 7 units to retailers. However, it remains unclear how many of those devices have found their way into consumers' hands.