Microsoft's Windows Phone 7 Needs to Avoid Past Strategy

Microsoft is revamping its smartphone offerings with the upcoming Windows Phone 7 Series operating system and Windows Phone Marketplace. While Microsoft is using its MIX 10 conference in Las Vegas to aggressively promote Windows Phone 7 to developers, the company may need to avoid the strategies it employed for its last smartphone releases, Windows Mobile 6.5 and the Windows Mobile for Marketplace, neither of which seems to have contributed the traction that Microsoft needs as it competes against Google, Research In Motion and Apple for market share in the crowded smartphone arena.

Microsoft hopes to compete head-on against Google and Apple in the mobile-applications category with its upcoming Windows Phone 7 Series smartphone operating system, despite the substantial lead that both the iPhone and Google Android devices currently enjoy in their number of available apps. Starting with its MIX 10 conference in Las Vegas, Microsoft has been offering the Microsoft Silverlight and XNA Framework as an ideal way for developers to build new mobile applications and games.

Within a broader context, however, Microsoft's mobile-app strategy may also involve different tactics from those the company employed for Windows Marketplace for Mobile, the apps storefront it released alongside its previous smartphone operating system, Windows Mobile 6.5.

"MIX 10 is a large first step in beginning the conversation with developers," Larry Lieberman, senior product manager for Microsoft's Mobile Developer Experience, told eWEEK in a March 15 interview timed to the opening of the conference. "Now with Silverlight and XMA, there are two extremely robust, mature frameworks with a large install base. Silverlight has half a million developers worldwide, and every single one of those developers is essentially now a mobile developer."

Microsoft used the opening day of the conference to discuss the new paradigm for the Windows Phone 7 Series, which replaces the "pages of mobile apps" model of the iPhone and Google Android devices with "hubs" that integrate mobile applications and Web content. The operating system further embraces Microsoft's newfound consumerist bent by adopting the slick sheen of the company's Zune HD portable media player.

Despite the emphasis on an integrated experience, Microsoft plans to aggressively promote a new Windows Phone Marketplace that will allow developers to leverage mobile apps for profit, via features such as one-time credit card purchases, mobile operator billing and advertising funded applications.

"Windows Phone 7 Series brings together a rich application environment, powerful hardware, a fresh approach to software and a smart new design," Joe Belfiore, corporate vice president of Windows Phone Program Management, wrote in a March 15 statement. "It was designed to generate incredible opportunities for developers and designers to quickly and easily deliver compelling applications and games. With the best developer tools, an established ecosystem and marketplace, and a path for developers to use their Silverlight and XMA Framework skill sets, we are delivering an application platform that is simple, powerful and inspiring."

Microsoft indicated that mobile applications built for its previous smartphone operating system, Windows Mobile 6.5, will not be compatible with Windows Phone 7 Series.

But Microsoft may also choose, in the months leading up to the release of Windows Phone Marketplace, to avoid the same sort of strategy it pursued in ramping up Windows Marketplace for Mobile, its previous mobile-applications storefront.

Marketplace for Mobile currently contains around 718 mobile apps for U.S.-based Mobile 6.x smartphones, a small number compared with the more than 100,000 currently available on Apple's App Store.

Throughout the summer of 2009, Microsoft executives publicly hoped for around 600 apps at the time of Marketplace for Mobile's Oct. 6 release. In a bid to further differentiate themselves from competitors such as the App Store, where prices tend toward free or else 99 cents per application, Microsoft also encouraged developers to charge more for their products.

"We would definitely want to promote [the idea] that you make more money selling applications than selling your application in a dollar store," Loke Uei, senior technical product manager for Microsoft's Mobile Developer Experience Team, told mobile application developers for Redmond, Wash., on Aug. 19. "But 99 cents, come on, I think your app is worth more than that."

On Nov. 16, more than a month after the store's launch, Microsoft announced that older versions of its smartphone operating system-specifically Windows Mobile 6.0 and 6.1-would also have access to Marketplace for Mobile. In addition, Microsoft also tweaked the storefront for better anti-piracy protection, and PC-based shopping and account management.

But in the time between the release of Windows Mobile 6.5 and Marketplace for Mobile and the Feb. 15 unveiling of Windows Phone 7 Series, Microsoft's smartphone operating-system market share plunged another 4 percent, dipping in analytics company ComScore's estimates from a 19.7 percent market share in Oct. 2009 to 15.7 percent by January. During that same period, competitors Research In Motion, Apple and Google all experienced gains in market share.

With those types of numbers, Microsoft may need to rethink its strategy when it comes to the new operating system and apps storefront. Microsoft executives have indicated within the context of the MIX 10 conference that the company intends a large push behind the new products when release time comes at the end of 2010. Part of that push may involve trying not to repeat the actions of the past.