Mobile Misfires Haunt Microsoft
Email
Print
Microsoft's previous misfires in the mobile arena have come back to haunt
the company's executives in more ways than one. According
to the company's 2010 Proxy Statement, the demise of its Kin phone earlier
this year-on top of that eroding smartphone market share-prevented Microsoft CEO
Steve Ballmer from receiving his full potential compensation for the
year.
Ballmer's compensation for fiscal 2010 could have potentially been $2.01
million, with a "potential Incentive Plan award of up to 200 percent of
his base salary for the fiscal year." But the total award eventually came
to 100 percent of his base salary, or $670,000, after the board weighed the
company's recent successes-the Windows 7 launch and progress in cloud
initiatives such as Azure and Office Web Apps-against a handful of fiascos: "the
unsuccessful launch of the Kin phone; loss of market share in the company's
mobile phone business; and the need for the Company to pursue innovations to
take advantage of new form factors."
The proxy document also called Robbie Bach, the retiring president of
Microsoft's Entertainment & Devices Division, to task for the company's
underperforming mobile initiatives: "The strong financial performance [of
Bach's division] was offset by disappointing performance in the Windows Mobile
portion of the business, where the company lost share and continued to have
operating losses yet made strategic progress toward the fall 2010 launch of the
Windows Phone 7."
The working theory is that Windows Phone 7 will launch sometime in
mid-October. Microsoft is hosting its annual Open House in New
York City Oct. 11, as well as a party that could
double as a smartphone launch event. At least one analyst has estimated Windows
Phone 7's rollout-related marketing costs at roughly $400 million-before you
factor in expenses related to platform development.
The
first Windows Phone 7 smartphones will reportedly launch through AT&T in
early November, with three devices manufactured by HTC,
Samsung and LG Electronics. Samsung
officially announced Sept. 30 that it is producing Windows Phone 7 devices,
but declined to specify an exact number or release schedule.
Even as Microsoft prepares to face off against Google and Apple, though,
those rivals-along with a handful of other tech giants-decided
this week to help Redmond in its long-running patent-infringement battle against
Canadian firm i4i. In nine "friend of the court" briefs filed
with the U.S. Supreme Court, those companies-along with entities such as the
Electronic Frontier Foundation and SIFMA (Securities Industry and Financial
Markets Association)-have joined in arguing that the standard for invalidating
patents should be lowered.
Under the current terms of the U.S. Patent Act, the burden of "establishing
the invalidity of a patent" rests with "the party [that is] asserting
such invalidity." In addition, the party must provide "clear and
convincing" evidence about that invalidity. Microsoft hopes that, if the
court lowers that standard, it will give the company a legal advantage against
i4i, which has won several lower-court rulings.
Those rulings found that Microsoft Word 2003 and 2007 violate i4i's patents
for custom XML. An
in-depth breakdown of i4i's patent by eWEEK can be found here. In April, a
federal appeals court rejected Microsoft's request for a multiple-judge review
of the lawsuit, which resulted in a nearly $300 million judgment.
Microsoft's latest petition is Microsoft Corp. v. I4I Limited Partnership,
10-290, U.S. Supreme Court (Washington).
