Microsoft's Windows Phone 7 Series Could Draw Consumers, Says Analyst

Microsoft could renew its presence in the mobile consumer market with the release of Windows Phone 7 Series devices later in 2010, according to a March 9 research note from Jefferies & Co. analyst Katherine Egbert.

Egbert apparently met with Mindy Mount, CFO of Microsoft’s Electronic and Entertainment Division (EDD), at the analyst firm’s annual technology conference on March 8. That conversation, in turn, seems to have informed Egbert’s suggestion that Microsoft could claim market share in the consumer segment with Windows Phone 7 Series, its upcoming smartphone operating system widely viewed as Microsoft’s primary driver in reversing its declining market share in the mobile arena.

Egbert’s note also mentioned Project Natal, which will allow gamers to interact with their Xbox 360 via body motion, without the need for a traditional controller.

"The controllerless Natal gaming system is one of the most innovative products Microsoft has produced in a long time," Egbert wrote. "Along with the WP7 series phones that are slated for release later this year, the products could go a long way helping Microsoft recapture the consumer imagination."

The research note also suggests a more definite release date for Windows Phone 7 Series, something about which Microsoft has been vague.

"The company focused on strengthening the ecosystem and signed key telecom and ODM partners," Egbert wrote. "The product is due by holidays of 2010, but we believe the devices could become available as early as October."

Microsoft’s decision to limit its partners’ ability to alter Windows Phone 7 Series could also have an effect on consumer adoption.

"Consumer experience on the upcoming phones is essential," Egbert added. "Previously, Microsoft partners had more power on customizing the Windows mobile user interface experience, but now the company plans to limit the extent of customization, ensuring a consistent experience across phones. We expect most of the innovation to take place in the UI and application layer."

Windows Phone 7 Series was first unveiled on Feb. 15 at Barcelona’s Mobile World Congress. As opposed to other smartphone operating systems such as Apple’s iPhone or Google Android, which focus on individual mobile applications, Microsoft’s operating system aggregates Web content and applications into a seven subject-specific "hubs," including "People," "Pictures," "Office," and "Games." The operating system is heavily reminiscent of the Zune HD, Microsoft’s portable media player, in its look and touch-screen navigation.

Microsoft has stated publicly that it will continue to support its previous smartphone operating system, Windows Mobile 6.5, even after the release of its newest product. However, Windows Phone 7 Series will reportedly not support previously built Windows Mobile applications.