updated 07:00 pm EDT, Thu July 30, 2009
Microsoft mobile strategy
The president of Microsoft's Entertainment and Devices division, Robbie Bach, told several Wall Street analysts that the company is in the process of reworking its Windows Mobile strategy following a "challenging year," according to Betanews. Despite increasing unit shipments, the platform has continued to lose market share against competitors such as BlackBerrys and the iPhone.
"We have to do a better job executing...and operating our business," Bach said, while claiming that the browser experience in Windows Mobile 6.5 will be better than the iPhone. The executive acknowledged strength in the business sector, but the consumer experiences are "not as rich as they should be."
Despite the promise to play catch up, the ill fate of Windows Mobile has been noted for quite some time. Gartner data last year indicated the iPhone 3G launch placed Apple's smartphone market share clearly ahead of Microsoft in the domestic market and internationally. Apple recently launched the 3GS, along with the v3.0 firmware, while Bach suggests the Windows Mobile transformation will "play out over the next 3 to 5 years."
Bach also claims that Apple lacks strength regarding services, particularly across "three screens in a cloud" which he describes as the integration of the PC, mobile phone and TV. Apple has, however, bridged a variety of capabilities across the iPhone, iPods, iTunes and Apple TV devices.
One glaring factor that Bach omitted from his strategy involves Microsoft's answer to the App Store. Apple's mobile software portal already hosts over 65,000 unique titles. While Microsoft has been developing the Windows Mobile platform for six years, the App Store recently surpassed 1.5 billion downloads in approximately one year since the initial launch. Although the number includes content downloaded to the iPod touch, the App Store still dominates the smartphone market.
Analyst Turley Muller suggests the exploding sales of iPhones and improving profit margins provide the company with additional revenue used to subsidize the recent price cuts for Mac systems. Despite the lower prices, the company was able to beat most analyst expectations for both revenue and gross margin for its best non-hoiday quarter yet.
Microsoft is set to launch an update to its mobile platform, Windows Mobile 6.5, sometime in October. The company is also working to "invest and build on the brand," which is likely a reference to the Windows Phone change. When the Marketplace launches, it is expected to contain approximately 600 certified applications.