Microsoft's Windows Phone Focus of Big Plans

Microsoft offered glimpses of upcoming Windows Phone devices and discussed big plans for its smartphone platform at the Worldwide Partner Conference.

Microsoft executives used the second day of the company's Worldwide Partner Conference, in Los Angeles, to offer a glimpse of upcoming Windows Phones.

Acer, Fujitsu, ZTE, and Samsung manufactured the devices on display as part of the July 12 keynote speeches, all of which sported a thin-and-light design style that will apparently drive the Windows Phone franchise going forward. Although executives have spent the conference highlighting Microsoft's partnership with Nokia-which will see Windows Phone ported onto the latter's devices-no smartphones from the Finnish manufacturer have made an appearance.

Microsoft also offered attendees a look at its wide-ranging Mango update, which will appear on Windows Phones later in 2011. New features include a redesigned Xbox Live Hub; home-screen tiles capable of displaying up-to-the-minute information; the ability to consolidate friends and colleagues into groups; and visual voicemail-among what's said to be 500 elements in all.

According to some outside analysts, Microsoft's smartphone ambitions face some serious headwinds. Research firm comScore estimated that, for the three-month period between the end of February and the end of May, Microsoft's U.S. share dipped from 7.7 percent to 5.8 percent-despite the marketing push behind the Windows Phone platform.

However, Microsoft seems to be readying to push back-hard. Andy Lees, president of Microsoft's Windows Phone Division, told the audience assembled to hear his July 12 keynote that advances in technology would halve the price of a smartphone capable of running Windows Phone to between $100 and $150.

"We're at an inflection point in Moore's Law where you can put everything needed to run a computer on a single chip," he said, which in turn is bringing PC-level power to a variety of form-factors. "There won't be an ecosystem for PCs and an ecosystem for phones, then one for tablets; they'll all come together." Devices within the resulting stack will prove capable of swapping key pieces of technology. For example, the version of Internet Explorer 9 running on Windows Phone has the same software underpinnings as the browser that runs on PCs.

"We can take the advantages we provide the PC and immediately provide them across devices," he added. That being said, there will be separations: producing a tablet that dual-operates as a phone would be "in conflict with this strategy," since Microsoft views tablets as "sort of a PC" with a need to connect to networks and such.

Nonetheless, based on comments delivered at the WPC, it seems as if Microsoft is more determined than ever to bake Windows Phone thoroughly into its portfolio. Whether such efforts can help the platform's anemic adoption rate remains to be seen.

During his July 11 keynote speech at the WPC, CEO Steve Ballmer went so far as to describe Windows Phone's market presence as "very small." Nonetheless, he went on to insist that other metrics boded well for the smartphone platform, which Microsoft is counting on to counter the competitive threat posed by the likes of Google Android, Apple's iPhone, and Research In Motion's BlackBerry franchise.

Ballmer seemed far more willing to talk other, more positive, Windows Phone metrics. "Nine out of 10 people who bought Windows Phone would absolutely recommend it to a friend," he said, reiterating a talking point voiced by many a Microsoft executive over the past few months. "People in the phone business believe in us."

Despite the possible softness in Windows Phone's market share, Microsoft is actively seeking another way to profit off the smartphone market: extracting royalties from Android device manufacturers. According to a new research note from Jack Gold, founder and principal analyst of J. Gold Associates, Microsoft's claim that Android violates its patent portfolio could result in a revenue stream that dwarfs anything the company can collect from its own Windows Phone franchise.

HTC has already agreed to pay Microsoft royalties for Android, as are a handful of small companies, including Wistron Corp, Onkyo Corporation, Velocity Micro and General Dynamics Itronix. According to a July 6 Reuters report, Samsung is also a target of Microsoft's efforts.

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