Windows Phone 7 – From Microsoft’s Perspective

Scenario: A Windows Phone 7 product manager responds off the record to a personal media contact. The inquiry is about Gartner’s prediction of Windows Phone 7 having a minimal impact on Microsoft’s mobile market share.

The last year has been a tough one for us. We were surprised by how quickly Apple began to dominate the U.S. smartphone market. But it really was Google that kicked us while we were down. To go from peddling a “superphone” back in January through its now defunct and unneeded web store, to the top selling smartphone platform in less than a year, has been exceptionally discouraging for me and my colleagues on the Windows Phone 7 team.

We know it’s not because “Android is open.” The carriers and device manufacturers knew that too. This perception was one of the reasons they were so excited about using Android. They could get a mobile operating system that was “good enough,” modify it as they pleased, and control its distribution while still marketing it as the open alternative. Of course, the ideologues will sing the song of Android openness all day, and that’s fine. We are pretty sure that the majority of consumers are not buying Android devices because of philosophical reasons.

That’s no more evident than with Cupertino. Whether it’s on the desktop, with DRM content, or more recently, with mobile, staying closed has been a winning strategy for Apple. They’ve got 100M+ iOS devices on the market and the iPad is flying off their shelves. We obviously know that their app store, with more than 250,000 apps, is a big part of that. At the same time, they were still selling plenty of devices before their app store opened.

Aside from us, obviously RIM has been seriously impacted by the rise of Apple and Google. Even with their declining market share, RIM remains a top player with a considerably weaker and less appealing app store. Clearly, there’s a segment of the market that still is asking for a device focused on e-mail, basic web browsing, and wait for it…making calls.

Similarly, although there’s an impressive catalog, our experience with the apps in the Android Market is that they are significantly less refined than those in Apple’s App Store. This leads us to believe several possibilities: 1) Consumers aren’t purchasing Android devices because of apps (despite what Verizon’s Droid commercials would suggest). 2) Consumers care more about the availability of apps than they do about their design (to Job’s dismay). 3) Consumers are purchasing Android devices because of their association with Google and integration with Google services.

While not turning our back on apps, we’d be most comfortable if the first observation were true. To mitigate the availability issue, however, we’ll have some flagship apps like Twitter, Netflix, and Travelocity in our app store as part of our launch. Going forward, I think we’ve proven over the years that we can excite the developer community. And yes, we all have, “Developers, developers, developers, developers, developers,…” tattooed on our backs. We may not be able to immediately support or entice independent developers like with iOS and Android but that’s OK. We have enough developer traction in corporate and enterprise segments where we think there will be some very interesting and even unique business-centric apps available in the Windows 7 Marketplace that aren’t on other platforms.

The third possibility, the purchase of an Android device because of its association with and integration to Google is more complex; it’s a challenge and an opportunity. We aren’t seen as exciting as Google. We are the company and the mobile operating system of yesteryear. At the same time, many of our products are still today’s products. In particular, our Office suite and e-mail services (Exchange anyone?) and client (Outlook for Mac!) are generally unrivaled. So, our new offerings might be seen as slightly less evil than the “don’t be evil” company. We don’t have massive server facilities that index your life. We’ll still offer you the opportunity to use your favorite Google services (so that they can track your every move) while also providing a comparable or better experience with the products you love.

Then there’s the tablet. We know the end game for mobile is not smartphones. It’s smart devices of various screen sizes that are enabled by touch. Apple had to rebrand it’s operating system from iPhone to iOS since it also powers the iPad. We may have to do the same but we’re planning on leveraging our new OS on tablet devices from the start. We’d be stupid not to; we’re also being stupid to not learn from Apple’s mistake but we have bigger issues to deal with right now.

We can sort of wave our hands through these issues. At the end of the day though, we know our future is going to come down to the number of devices we can ship. We need an Android-like appeal to carriers and manufacturing partners or we’ll face the same issue as Palm (HP): not having enough distribution. That’s why we are launching with nine devices in the U.S. Our partners need to continue to be excited about the Windows Phone 7 approach. Our devices won’t have an app-driven Apple interface but they will have apps. They won’t be as integrated with Google services as Android but they will be integrated. They won’t tout messaging like RIM’s Blackberry but they will be have a familiar e-mail client in Outlook.

It’s possible that we have erred on any one of these aspects. We could have mistakenly decided to only adapt what we consider to be the best experience of these features instead of master one specifically. We really don’t have a choice though. We can either offer an alternative to Apple, Google, and RIM or simply copy them and likely fail by trying to do so. We may still fail and we’re very aware of that thanks to Gartner—but we are at least committed to going down with a fight. See you in 2014 (hopefully).