IHS Global Insight Perspective | |
Significance | Microsoft has revealed more details about the Windows Mobile 6.5 platform and further indicators of its mobile strategy. |
Implications | Microsoft has been pushing partnerships to enable on-deck applications and tight integration of its services. |
Outlook | While an effective marketing strategy, the flexibility of the smartphone platform makes customer lock-in more difficult. |
Microsoft has unveiled a sneak preview of the latest version of its mobile operating system, Version 6.5, and released official details of the 'My Phone' web-based synchronising facility and the 'Windows Marketplace' (see World: 10 February 2009: Microsoft Launches "Cloud" Service for Mobiles, Plans "Online Bazaar"). Microsoft Chief Executive Officer (CEO) Steve Ballmer outlined some of the broader brushstrokes of Microsoft's assumptions and strategy. Ballmer noted that users are looking for phones that will meet both their business and personal needs, with smartphones envisioned to take more than 50% of the market over the next "several years". The penetration of Microsoft products was highlighted by Andy Lees, sales vice-president of the Mobile Communications Business, with 50 million Windows Mobile phones sold, including 20 million over the last year, 430 million users of Windows Live web services, such as Hotmail and Windows Live (300 million unique users each), and 1 billion Windows PC users.
Microsoft's vision is described as aiming "to deliver one platform that extends across the PC, the phone, the TV and the web, and that connects us all to the information and people that we really care about". Various different versions of Windows will form that platform, including some still to come to market. What is described as Microsoft's unique approach is that this will be achieved by "creating a platform for third-party innovation". Ballmer's further comments emphasise personalisation of the experience and the range of hardware platforms available through Windows Mobile. Talk of "connections to people and information" emphasises the focus on web services, networked applications and social networking.
Windows 6.5 is heralded for its upgraded user experience, with an improved touch-screen interface suited to finger use. Ballmer also noted "other interaction modalities" that would optimise interaction in a mobile context, likely referring to features such as voice notes for Instant Messaging. A new Internet Explorer and a 'dashboard' home screen contains info on emails, SMS, missed calls and calendar appointments, as well as 'pinned' shortcuts to favourites and flexible home screens. The user experience is repeatedly noted as comparable to that of the desktop applications, for example mirroring Outlook and supporting Flash in Internet Explorer.
The My Phone service, currently in Beta, facilitates automatic back-up of all content and data stored on the handset to a web space accessible through the fixed internet, which forms a major part of the overall strategy to "stitch together" the experience between mobile and PC platforms into a seamless and simpler user experience. It also supports search and archive functions. The 'Windows Marketplace for Mobile' will be accessible either directly through Windows Mobile 6.5 handsets or through PCs for searching, browsing and purchasing applications. Microsoft notes that some 20,000 applications are already available for the Windows Mobile platform and it will release new tools for developers to build applications, but this mainly represents a new opportunity for developers to market and monetise applications.
Microsoft and LG Partner
LG has been strongest in the high-end feature phone segment where it has been performing comparatively well, but is moving to tap into the increasing polarisation of the market between smartphones and low-end handsets (see World: 16 February 2009: LG Electronics to Focus on Low-End Handsets for Market Share Growth in 2009 and 23 January 2009: Nokia Loses Market Share as Global Handset Market Slows and Korean Vendors Gain). Microsoft updated on the progress in the two companies' collaborative efforts, announcing that LG would be making Windows Mobile the primary operating system for its smartphones, with a target of 26 new Windows Mobile phones coming to market in 2012 alone and the total agreement covering up to 50 handsets (see World: 4 November 2008: LG and Microsoft Agree Converged Device Collaboration). Joint research and development teams will be created to tightly integrate hardware and software.
Operator Partnerships—Windows Live
Several partnerships with operators were announced, with América Móvil deploying Windows Live services such as search and MSN content, Windows Live Messenger, Windows Live Hotmail and Windows Live Spaces in 17 countries in Latin America. Telefónica and Telecom Personal (the Argentine and Paraguayan operator) have also signed an agreement to enable Java client application downloads for accessing these services. SIM cards will come with the Messenger client pre-installed. This comes through a deal with Gemalto, which has developed the SIMessenger application, the first Microsoft-certified instant messaging SIM client solution. The Telefónica announcement notes that this will enable the service over the SMS facility. In the Middle East, Microsoft has struck a deal with Orascom.
Content and Advertising
Microsoft also announced that it has struck deals with Belgium's second- and third-largest operators, Mobistar and BASE, to manage mobile advertising, including media sales, ad serving and optimisation, while six new publishers had joined the media network, including Dow Jones eFinancialNews and Private Equity News titles, Spanish dailies La Vanguardia and El Mundo Deportivo, Le Parisien.fr and European travel site WAYN.
Outlook and Implications
Major changes are under way to mobile vendors' business with a major shift into convergence, smartphones and applications. Nokia also confirmed at the conference the opening of the Ovi application store, which consolidates several download services and has similar themes of social connectedness to Microsoft (see World: 13 February 2009: Nokia's Application Initiatives Come Down the Pipeline). This is set to be a cornerstone year with the whole mobile industry seemingly moving to tap into smartphone growth, applications and services while integrating and converging platforms. Web-based services, particularly social-networking facilities, are set to form the core of these services and Microsoft will aim to improve penetration for the relatively venerable, but unhyped Live Spaces service around this shift for which seamless integration will be key. The flexibility of the smartphone platforms will drive device uptake, but could also impact on the ability to leverage them as effective launch-pads for Windows Mobile services, making the differentiator of tightly integrated services vital.