Microsoft is doing the right thing: at the Mobile World Conference in Barcelona, two weeks ago, Steve Ballmer hit the reset button and announced an entirely new smartphone OS, Windows Phone 7 Series. This is fundamentally better than flogging yet another ‘’new and improved’’ rev of the aging, failing Windows Mobile (née Windows CE) platform.

This is a new approach for Microsoft — with some old tricks mixed in.

So far, on the desktop or with mobile devices, Microsoft has played the evolutionary game,  trodding  (1) the cautious backward compatibility path. To this day, the message always has been: Stay with us, your investment in your (or our) applications is safe.

Since the 1.0 release of Windows CE in 1996, the credo was: Stretch but don’t tear; improve, expand but don’t break existing programs. See this Wikipedia timeline.
But three factors came to break the faith.

First, in mobile phones, Microsoft never managed to establish the kind of dominion it enjoys on the desktop. On PCs, the company first used tied sales, or bundling: if an OEM  (Dell, HP) bought Windows but not Office, the OS license price was much higher than with a Windows + Office combo. Then, to thwart competing OS such as Linux, it used licensing agreement tricks. Yes, you, the OEM, could sell dual boot PCs, meaning a PC that could launch Windows or Linux when turned on. But, an important but, the Windows license contained a clause obligating you to only use Microsoft’s Boot Loader, the program that loads on start-up and manages the process of choosing which OS to boot. An even more important ‘’but’’: when you looked into the Boot Loader’s license language, you found it was licensed to you for the sole purpose of booting Microsoft OSes. You were forbidden to use the MS Boot Loader to boot Linux. If you wanted to have a Windows license, you had to agree to the exclusive and exclusionary use of the MS Boot Loader. This explains why, to this day, Dell and any other OEM don’t sell a dual-boot Linux/Windows system. It’s not because Linux is bad or expensive. Most users, reasonably, would want the safety of Windows as the fall-back toolkit as they experiment with a different platform they’re not sure of: see what happens on the Macintosh with virtual machines running Windows. Microsoft managed to prevent such experiments on Windows PCs.

No such “luck” with Windows Mobile, Microsoft “failed” to find a leverage point for tied sales or for exclusive licensing practices. In great part, this happened because, at the time, mobile applications didn’t have the weight, the sine qua non role Office and other similar software had on the desktop. This allowed Windows Mobile competitors to flourish unimpeded: Palm with its PDAs and, later, the Treo Smartphone, Nokia with its Symbian platform (mostly outside of the US) and, of course, RIM, with its Blackberries. Actually, while Windows + Office dominated the enterprise desktop, the Blackberry became the de rigueur mobile device for Corporate America. InformationWeek, in a survey published in a December 2009 article, finds the “BlackBerry continues to dominate in business settings, with 61% of the respondents who are deploying smartphone applications citing widespread BlackBerry usage’’. (InformationWeek adds: “What shocked us, however, is how quickly the iPhone has penetrated enterprises: 27% say the iPhone has widespread use.”)

This Chart Of The Day, from our friends at Silicon Alley Insider, summarizes Microsoft mobile predicament:

Forget yesterday’s bombastic pronouncements such as the iPhone being a passing fad or Windows Mobile going to a 40% market share in 2012. RIM had won the battle with better hardware, more carrier coverage, better services and, ironically, impeccable Microsoft Exchange integration.

Now we have a fresh start: Windows Phone 7 Series. The new platform offers really interesting features, some original, some unavoidable.

The user interface is a refreshing departure from what we’ve seen since the iPhone came out. You can go take a look there. Some even claim the UI “out-Appled Apple”. And, indeed, gone is the lame attempt at shoehorning UI elements from the Windows desktop, such as the Start button.

It looks both inviting and functional.

Another interesting fact: the consumer is now the focus, at least initially. No more bragging about enterprise applications, perhaps because, for a nascent platform, the mature, well-debugged RIM/Blackberry is too formidable an adversary.

Still smarter, unlike the previous platform, Windows Phone attempts to create content tie-ins with its modestly successful Zune HD mobile player, see the UI relationship here. More important is the Xbox Live connection: Microsoft’s game console is a successful one, supported by a strong online service. In practice, you can expect a good supply of music, videos and games on your Windows Phone handset, served with a fun and functional UI.

This is all very encouraging. But many questions remain.

We’ll skip quickly over the obligatory items. Multi-tasking? Depends how you choose to read the kind of, sort of answers couched in execuspeak. Same for Flash: We’re not opposed to Flash. (But we have Silverlight, “a web application framework that provides functionalities similar to those in Adobe Flash”.) Cut-and-Paste? Not clear yet.
Later this month, March 15th to 17th, in Las Vegas, Microsoft will hold its software developers’ conference, MIX. We’ll know a lot more about what’s inside the sausage after geeks get into the factory. The good news is Microsoft freed itself from the past, the result should be a truly modern mobile OS, technically on par or better than its competitors. More on that in a few weeks.
From what we hear, it looks like Microsoft is taking application security very seriously, severely restricting third-party code access to the machine’s hardware and software code. This is consistent with a trend towards using mobile devices as payment and authorization platforms. You don’t want spy software surreptitiously injected into your electronic wallet.

Moving past technical treats, there is the dollars and cents, or sense question. How do you sell this to handset manufacturers? This was called “Joke of the Week” by Business Insider. Indeed, when Android is free and popular, and customizable, we’ll get to that in a moment, how do you get a handset manufacturer to give you money? The answer can’t rely on the platform’s technical merits, it’s got to involve some tie-in with other Microsoft properties. Which gets us to the ‘‘Series” in the infelicitous “Windows Phone 7 Series” name. The 7 probably is a wink towards the desktop, the Series could telegraph another instance of the dreadful version proliferation we see on PCs, 4 Windows 7 versions, not counting the 32-bit and 64-bit variants. More specifically, there could be an Windows Phone 7.3 Enterprise Edition in our future, once the initial consumer version is suitably debugged.

The trouble with customization: Microsoft is well aware of the “linuxification” problem, of the babelization that besets Linux and that threatens Google’s Android. So, Microsoft, besides exerting tight control on applications, will restrict front-end (UI) customization and is making it clear it wants to restrict hardware variations to three “chassis” definitions.

Lastly: some criticize Microsoft for announcing their new mobile OS in February with availability “in time for the Holidays”, meaning October 15th. The naysayers claim this will give Nokia, Google, RIM and Apple plenty of time to sharpen their knives, as if they were not honing those already as they fight one another. And, as discussed above, the old Windows Mobile was dead or worse: the walking dead spreading the bad news of Microsoft’s lameness. An early announcement is the right move in this context.

JLG@mondaynote.com

(1) For language purists: The NYT occasionally uses he ‘‘illegal’’ trodding instead of treading, it rhymes with ‘‘plodding’’…
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