TakeAway: As personal computing moves away from desktops and laptops to smartphones and tablets, Microsoft has yet to establish a foothold in either.
Its new smartphone platform offers the best chance get to gain market share but there are some steep challenges to overcome.
Developers don’t want to develop apps for the platform until sales justify doing so, but people won’t buy Windows 7 phones without compelling apps.
Not only that, but the platform won’t work on Verizon until next year, when Verizon is expected to launch the iPhone.
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Excerpted from Bloomberg Businessweek, “Microsoft is Pinning Its Hopes on Windows Phone 7,” by Peter Burrows and Dina Bass, October 14, 2010
In an interview shortly after he unveiled Microsoft’s new Windows Phone 7 mobile software on Oct. 11, Chief Executive Officer Steve Ballmer declared a new era for Microsoft. “This is a big launch for us—a big, big launch,” he boomed.
Ballmer, never known for understatement, may be lowballing this one. Gartner expects smartphone sales to surpass PCs in 2012. Microsoft remains immensely profitable thanks to its aging PC monopoly, and it will remain so even if it never figures out the smartphone market. …
By almost any measure, Microsoft is nearly out of the mobile game. Its market share fell to 5 percent from 22 percent in 2004, says Gartner. Customer satisfaction of Windows smartphones is 24 percent, according to ChangeWave Research; it’s 74 percent for iPhones and 65 percent for handsets powered by Google’s Android. …
… With Apple and Google each activating more than 200,000 customers a day, according to those companies, handset makers, carriers, and app makers have far larger audiences than Microsoft offers. …
… While AT&T and T-Mobile will offer Windows Phone 7 devices, the software won’t work with Sprint or Verizon Wireless until next year. (Apple’s AT&T-only iPhone may be on Verizon by then.) …
Holding share in such a fast-growing market could require sales of about 20 million units in 2011, no easy feat. That’s how many iPhones Apple sold in its debut year. …
Microsoft’s to-do list doesn’t end with Windows Phone 7. It has no tablet software that can match the iPad. Failing in smartphones would be bad. Failing in tablets, which users expect to run office software, would be catastrophic …
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Full Article
http://www.businessweek.com/magazine/content/10_43/b4200042877975.htm?campaign_id=magazine_related
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