Microsoft to Employ Dual Mobile OS Strategy to Compete with Android and iPhone

By Devin Coldewey

According to Digitimes, Microsoft (MSFT) will be using a “dual-platform” strategy to compete with Android and the iPhone. 6.5, due to be rolled out October 1, will stay alive just to compete with Android, while WinMo 7 will compete with the iPhone. I don’t think this is as shocking as Gizmodo does, but I certainly don’t see the wisdom in having dueling OSes. Dueling salsas, maybe.

On the other hand, I see the necessity: Windows Mobile is entrenched in its current form and that inertia is going to be difficult to overcome. At the same time, there’s pressure to compete at a lower level with a lighter and savvier OS — something 6.5 really isn’t able to pull off (despite looking nice).

What to do, what to do? Microsoft is between a rock and a hard place, but I think keeping a “legacy” system alive is a bad idea — as Microsoft has proven over and over in various arenas. I’d say take the Palm (PALM) route: have an emulator or “classic mode”! Take 6.5 off the table, focus on 7, but make sure you’ve got enough soft back-compatibility to let businesses make the changeover.

With luck 6.5 will be nice enough, and run fast enough, at the end of 2010, that it will be a viable option for lower-end smartphones. We shall see.

[via GigaOm and others]

Original post

Comments

[jmmx:]

MS's best hope would be to adopt Android, add a REALLY nice layer on top of it, and a few special bells&whistles and sell it cheap. They could add some of their own apps to run only on their system - Office for example.

That would keep them in the chariot race even if pulled by someone else's horse. Otherwise, they will just be one of the many mobile OS's that, outside of RIMM and iPhone, compete in the "other" category.

IMHO

Aug 20 11:27 AM

[disposablei...:]

Splitting developers' attention is such a bad move. They already have a hard time justifying development on a mobile platform other than the iPhone / iPod Touch (50 million installed base + more apps purchased per unit than any other mobile platform).

Plus think of the confusion for customers. Which should you buy into? If Apple can be effectively challenged it will be because of one or two strong platforms (RIM is doing well, Android looks like a possibility, but no critical mass yet). A dozen competitive platforms will only help Apple stand out more.

When Apple outdoes itself with a new product, it almost always kills off the old one, instead of leaving a lesser product on the market for others to compete with.

When they brought out their flash-based iPod Nano, Apple killed off it's top selling hard drive-based iPod Mini. At the time analysts said they should have kept the Mini around to fill a gap in the lineup. Turns out Apple was right in the long run. Killing off the Mini left the other manufacturers with nothing comparable to Apple's stuff.

I guess that strategy only works for the leader. The "phone" market is changing rapidly into a "mobile computing platform" market. Apple is fast and ruthless. RIM is smart and focused. Microsoft will have a very hard time competing. Even if it's just for second or third place (or even fourth, if Nokia gets their act together one day).

Aug 20 11:49 AM

[Josh B Thom...:]

the world has changed and Microsoft is trying.

Aug 20 12:09 PM

[Roger Knights:]

Maybe they'll buy Palm. The market is pricing Palm for a buyout by someone.

Aug 20 12:29 PM

[jack dee:]

MS had totally lost the plot with Win MO. It is not like they were sleeping at the wheel it is as if they placed a monkey in the driving seat and put the car in gear.

Real changes are needed, perhaps some dead wood or even a clear cut.

I say let the blue sky kids work for a living and get them on this. And not "lets see how much we can stuff into a box " God know there is enough money going into that black hole filled with "gifted" employees that suck up sharholder earnings. if they are so gifted perhaps they can help out with some of the heavy lifting

Aug 20 01:29 PM

[greedcanbgood:]

I agree...dump WM and go with the new OS. Microsoft would do well to make the new OS portable to some of the existing phones (HTC comes to mind here) at a really low price point. Get the consumers to try it, like it before they make their next phone purchase and you've got a better chance of keeping them from looking elsewhere.

Aug 20 01:57 PM

[Josh B Thom...:]

It is a contradiction that everyone wants a piece of MSFT yet everyone says MSFT is a failure. It's a contradiction that most product MSFT sells is labeled a has-been yet everyone is trying to duplicate the very same products. It is a contradiction to say that competition is a new experience to MSFT it's only a compliment to their strong market position.

Aug 20 02:05 PM

[disposablei...:]

@ Josh B, it's about the trend. Microsoft's product have a large amount of momentum, but look where they're going.

Nokia has a huge share of the smartphone market today too, but a few more years of double digit market share losses and that won't be the case anymore.

Aug 20 02:44 PM

[disposablei...:]

Since we're on an investment site, at least in the mobile market, no one would want to trade places with Microsoft. Don't forget, they're only selling the OS.

Look at it this way:

Apple sells 5.4 million PHONES last quarter, they make something like $400-$450 PROFIT per phone including carrier subsidies.

RIM sells 7.8 million BlackBerrys, at maybe half that profit per phone including carrier subsidies.

Microsoft sells 3.8 million Windows Mobile LICENSES last quarter, and they make something like $5-$15 REVENUE per phone.

Even if Microsoft sold 10 times as many as Apple, they wouldn't make anything close to their profit. Microsoft chose it's business model and now has to live with it.

Aug 20 04:32 PM

[Tom B:]

Who's "trying to duplicate [MSFT]"?


On Aug 20 02:05 PM Josh B Thompson wrote:

> It is a contradiction that everyone wants a piece of MSFT yet everyone
> says MSFT is a failure. It's a contradiction that most product MSFT
> sells is labeled a has-been yet everyone is trying to duplicate the
> very same products. It is a contradiction to say that competition
> is a new experience to MSFT it's only a compliment to their strong
> market position.

Aug 20 11:07 PM

[Tom B:]

Glad to see that MSFT isn't getting any smarter in their dotage.

A couple of key habits MSFT has: 1a) they never give anything up, no matter how unsuccessful (XBox, Zune). 1b) Hidebound in legacy. Win7, their "great white horse" that's going to rescue them from Vista-ville is still a Soviet era piece of drek. They STILL haven't made the transition to UNIX because they are SO stuck in supporting legacy. They think some new eye candy will drive blockbuster sales? They are competing with MODERN OS's that can run lots of media-intensive processes at once without choking, from Apple (OS X) and Open Source (LINUX), with two hands tied behind their back. They are like the knight in Monty Python with both arms and both legs cut off yelling "Come back ya coward". 2) Confusing product line--20 versions of Win 7? OK, maybe 5 or 6. Two mobile OS's? 3) Stupid business model (see disposable's comment above). By licensing OS's instead making the whole widget, they give up a lot of control and create extra work for themselves with regards to the multitude of PC hardware configurations they have to deal with.

But, I'm off-topic. They should simply kill Win Mo. If they make THAT little per license, why bother? Don't fight battles you can't win. I'll take my consulting fee in cash or certified check.

Aug 20 11:22 PM

[mollytjm:]

if businesses didn't have so much already invested in microsoft products, microsoft wouldn't be the first choice for a lot of them. Tech isn't about where you've been...it's about where you're going...and how fast you can do it and how well. This is not microsofts' forte. As companies are able to redo their set ups, more will move to Macs, in spite of the fact that their IT departments will complain. Macs give IT departments a lot less work.
I really can't believe Zune is still with us. Maybe they'll receive some of the 'cash for clunkers' $.
Microsoft isn't a company i'd invest in, because i can't see it able to compete well into the future. I can see Apple and Google there, though.

Aug 21 11:46 AM

[Tom B:]

To cite Wayne Gretzky: "A good hockey player [investor] plays where the puck is [MSFT]. A great hockey player [investor] plays where the puck is going to be [AAPL]. "

These MSFT apologists are all living in the present. Sure, MSFT rules the roost. But investing is about the future. MSFT is not doing anything that looks like planning for the future to me.


On Aug 21 11:46 AM mollytjm wrote:

> if businesses didn't have so much already invested in microsoft products,
> microsoft wouldn't be the first choice for a lot of them. Tech isn't
> about where you've been...it's about where you're going...and how
> fast you can do it and how well. This is not microsofts' forte.
> As companies are able to redo their set ups, more will move to Macs,
> in spite of the fact that their IT departments will complain. Macs
> give IT departments a lot less work.
> I really can't believe Zune is still with us. Maybe they'll receive
> some of the 'cash for clunkers' $.
> Microsoft isn't a company i'd invest in, because i can't see it able
> to compete well into the future. I can see Apple and Google there,
> though.

Aug 21 12:18 PM

[jack dee:]

>>> MSFT is not doing anything that looks like planning for the future to me.<<<<
Hey TomB maybe that is because your hate and bile is blinding you?

If you want to know what MSFT, just bing yahoo or google there is plenty of info around to give you some idea of where they might be going.....

Aug 21 01:05 PM

[Josh B Thom...:]

"if businesses didn't have so much already invested in microsoft products, microsoft wouldn't be the first choice for a lot of them."

It is a text book strategy to create switching costs, but Microsoft should still discuss that idea. It may create a dialogue that allows issues to come to the surface before poor results force the dialogue.

A lot rests on Azure. Azure could become the next Windows 95 and Windows 2000 combined. "Developers!, Developers!, Developers!"

Azure = "a cloudless sky" aka "blue"

Aug 21 02:03 PM

[Tom B:]

Oh yeah, they are cutting deals with cutting-edge companies like Yahoo and trying to block Google by legal means from distributing books on the web. I'm SO impressed.


On Aug 21 01:05 PM jack dee wrote:

> >>> MSFT is not doing anything that looks like planning for the future
> to me.<<<<
> Hey TomB maybe that is because your hate and bile is blinding you?
>
>
> If you want to know what MSFT, just bing yahoo or google there is
> plenty of info around to give you some idea of where they might be
> going.....

Aug 21 02:33 PM

[Tom B:]

"Azure = "a cloudless sky" aka "blue"" Like, in the lifeless desert. FYI, Azure is NOT Win7, Azure is MSFT's name for "cloud" services. Let me tip you off-- other companies are also looking at the "cloud" companies that might have some shred of credibility with regards to computer security. I wouldn't want to store MY sensitive info on the web unless I felt there was a good chance it might be secure.


On Aug 21 02:03 PM Josh B Thompson wrote:

> "if businesses didn't have so much already invested in microsoft
> products, microsoft wouldn't be the first choice for a lot of them."
>
>
> It is a text book strategy to create switching costs, but Microsoft
> should still discuss that idea. It may create a dialogue that allows
> issues to come to the surface before poor results force the dialogue.
>
>
> A lot rests on Azure. Azure could become the next Windows 95 and
> Windows 2000 combined. "Developers!, Developers!, Developers!"<br/>
>
> Azure = "a cloudless sky" aka "blue"

Aug 21 02:38 PM

[jaume ribe,...:]

Inertia is going to be difficult to overcom ? Sorry but I disagree. Against inertia creativity and innovation... or "copying cats". Has Microsoft, through its History, demonstrated or not to be able to overcome whatever trouble they've encountered -only acceptable measurement being money earned- or compete in any market they are interested in (up to this point, even) ?

Aug 22 04:55 AM