The one big move Microsoft could still make in mobile

Although Microsoft has delivered a solid product in Windows Phone 7, the uptake from the public has been anemic as Android and Apple continue to suck most of the oxygen out of the mobile space. WP7 will get a shot in the arm later this year when Nokia moves most of its smartphones to the platform, but Microsoft is still in for an uphill climb in this market, which is critical to the future of tech. If the company wants to to be more than a distant niche player in mobile, it's going to need to do something bold and innovative in order to compete with Android and iOS devices.

Last week, I wrote about the "utopian convergence of PC and mobile" and looked at the question of how long it might be until smartphones and traditional computers come together into a single device. I mentioned that a lot of the hardware makers like Samsung, Apple, Dell, and HP are unlikely to push this development because they would much rather sell you two or three devices (PC, smartphone, and tablet) than one converged super-device. That's why this could be the one big opening for Microsoft to step in and make a major impact on the mobile space.

The opportunity

The interesting thing is that former CEO Bill Gates (right) saw this opportunity coming over a decade ago. Back in the late 1990s and early 2000s, he often talked about how the future of the PC could be the phone -- especially in the developing world -- and that a user would place the phone on a desk and it would wirelessly connect to a keyboard, mouse, and monitor and work like a standard computer.

Microsoft could still be the company that brings this innovation to market on a mass scale. In fact, Microsoft leaders should look at what Motorola is doing with its Webtop software running on Android phones like the Motorola Atrix and say to themselves, "This is our territory. We need to own this."

In the short term, on Windows Phone 7, Microsoft should inject a lightweight Windows instance (yes, I realize that sounds like an oxymoron) that could be launched when the device is in desktop mode. Let the device seamlessly share PIM data between the mobile software and the full desktop software. And, deliver a user interface that is relatively consistent across the two experiences. If Microsoft were to pull that off and make it a lot better experience than the sluggish Motorola software, it could give people a reason to buy a Windows phone instead of Android or Apple devices.

Of course, there's one problem here. Microsoft's top hardware partners -- HP, Dell, Lenovo, Acer and Samsung -- are unlikely to be eager to push this concept since it could cut into traditional PC sales. If that's that case, then Microsoft may have to go it alone and do the hardware and the software. The company once had a rocky history with hardware, but in recent years it has produced some much higher quality devices like the latest generation Xbox 360, the Kinect, and even the Zune HD. It may be time for Microsoft to build the converged PC-mobile device of the future itself -- even if that means buying out a partner like Nokia or HTC in order to make it happen.

Two reasons Microsoft could miss it

Despite the fact that Microsoft could potentially burst through the line of scrimmage and run for a touchdown on this opportunity, there are a couple reasons why it's unlikely that Microsoft will take the ball and make that run.

1. The vision problem

Since Gates officially stepped aside in 2008 to focus on philanthropy, Microsoft has shown no vision for the future of computing. It has failed to focus on product strategy and has fallen farther and farther behind on innovation, especially in the nascent markets for smartphones and tablets. Current CEO Steve Ballmer has done a great job of squeezing profits out the company's products -- mostly Windows, Office, and server software -- but he may have mortgaged the company's future by putting so little emphasis on product development in PC, mobile, and cloud computing. With that in mind, it's hard to imagine Microsoft taking such a bold leap.

2. Windows fears

Just as Microsoft's hardware partners are afraid of cannibalizing existing revenue from their PC and mobile devices by creating a converged device, Microsoft will have a hard time getting past the short-term revenue hit that its Windows division could take if Microsoft were to create a converged uber-phone that could replace a PC purchase. Microsoft makes massive profits on Windows, and even though sales of tablets have already started to take a toll on new PC sales, Ballmer and Microsoft will likely try to milk the Windows cash cow for too long before they attempt to make a bold move. Indeed, when you're a large public company that has to maximize profits quarterly, it often forces you to play more defense than offense. However, in this case, Microsoft's stock price has been treading water for years as investors wait for Microsoft to give them a reason to believe in the company's future. A converged PC-smartphone from Microsoft could finally give them something to get excited about.

This was originally published on TechRepublic.