A Microsoft smartphone: No. A Microsoft phone chassis: Yes

A Microsoft smartphone: No. A Microsoft phone chassis: Yes

Summary: Microsoft is not going to introduce a Microsoft-branded phone at the Mobile World Congress show in Barcelona later this month. Not a Microsoft-branded Zune phone. Not any kind of Microsoft-branded phone. Period. So why -- in spite of continued and repeated denials by Microsoft -- do reports continue to surface that Microsoft is going to deliver a smartphone?

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Microsoft is not going to introduce a Microsoft-branded phone at the Mobile World Congress show in Barcelona later this month. Not a Microsoft-branded Zune phone. Not any kind of Microsoft-branded phone. Period.

So why -- in spite of continued and repeated denials by Microsoft -- do reports continue to surface that Microsoft is going to deliver a smartphone? According to people familiar with the company's mobile plans with whom I've spoken, Microsoft is developing some smartphone reference implementations. These implementations are taking the form of multiple smartphone chassis (at least one of which is powered by Nvidia processors).

(A year ago I speculated that Microsoft officials were carefully choosing their words about the existence of Zune phones. Looks like I was right. There will be Zune phones. There will be other kinds of Zune-enabled mobile devices. But they won't be crafted -- beyond the reference chassis -- by Microsoft.)

Think of what Microsoft is doing in phones as similar to what it has done in the PC market. Microsoft often develops reference implementations and encourages PC makers that they build PCs that adhere to a set of reference guidelines/specifications.

From one of my sources, who requested anonymity: "The (Zune phone) chassis 1 spec is challenging the manufacturers to come up with something that will please customers." This source said Microsoft was pitting a handful of cell-phone makers against one another to come up with the best implemention of the spec.

From what I've heard, Microsoft is focusing most of its reference efforts around the Windows Mobile 7 platform. I wouldn't be surprised to see Windows Mobile 7 as Microsoft's showcase for Zune MobileSkyBox 2.0; its SkyMarket (or SkyMart) phone-application store; a Zune Video service that could work across phones, MP3 players and Xbox consoles (could this be what Microsoft execs Joe Belfiore and Charlie Kindel could be working on now?); and other "Pink" services.

Will Microsoft never do its own phone? Never say never. But for the next couple of years, don't expect Microsoft to try to get into yet another low-margin, hardware-centric business.....

Topics: Smartphones, Hardware, Microsoft, Mobility, Telcos

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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28 comments
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  • It's sounds rosy

    A very positive outlook on their embedded front. A 'cool' factor is yet to
    please in my view however. They would really benefit from going 'even-
    smaller' to compete in the market, really. For instance, 'pimp-yo-
    glasses' would be a great attention getter. i know as an athlete I would
    enjoy listening to and/or speaking to the hardware, alas, if it only clipped
    to my cheap pair of shades.
    dascha1
  • This can't be wrong

    MJ,

    I am not sure if you are sayiny it for certain, but I think that's the only way it will turn out. I have thought about this for a long time, well, i am not working for msft. They can have a frame work that is guidelines, inlcuding not only winmobile, but also the all the package of the services ready. Each vendor has their freedom to customize it, different look and capacity.

    jk_10
    • certainty

      Well, I never can say I'm 100% certain (until the press release comes out and we see how MS positions something). Because of the sensitive nature of this info, I can't be more specific on who my sources are. But I'm feeling this info is as accurate as I could make it, given what I got from whom.... (if that makes any sense). MJ
      Mary Jo Foley
      • This isn't unexpected

        When they started designing Pocket PC devices, they were all to have a D-Pad control, a Windows hardware button, stylus, IR, a certain size screen, a voice-recorder button, etc.

        Likely this is just more of the same. They'll probably dictate that certain criteria be met for it to have their software on it.

        Microsoft does this a lot though. For instance, OEM hardware companies that build for Windows Home Server have to meet certain criteria too. A couple of those requirements are that the device must be headless, and it must have status LED's for each drive for it to meet logo certification.
        Joe_Raby
  • Big mistake

    This is a huge mistake on Microsoft's part: http://blog.oneppo.com/2009/02/06/microsoft-still-not-getting-it/
    oneppo
    • Prejudiced much - already?

      Even without seeing what the guidelines are and what they mean to consistent real world user experience, you have started bitching already?

      I think you're just spamming your blog in the Talkback section, and nothing is more easier a punching bag than Microsoft to make careers out of. Pathetic.
      kvkalidindi
      • Did you even read it?

        How is this prejudice? Did you even read my blog post? I want Microsoft to succeed. I?m frustrated that they keep making the same mistakes over-and-over. I don?t like Apple products. In fact, I have a Zune and an HTC Touch Pro. But they?re doing something right. For years I?ve been making the claim that Microsoft needs own the value chain.
        oneppo
        • Make your points here

          I know linking your blog posts will get you more visits than normal and increase your linking scores, but the problem is that you don't even bother to make any of your points here.

          Make your basic points here and most of us won't mind you linking to your blog as much as what is obviously a plea to go read your blog.

          I did read your blog, it was decent, but I think you wish that MS use the Apple model in the phone ecosystem, when that is quite literally the last thing they should ever do.

          While MS does maintain control some hardware pieces like Zune and Xbox, any similar venture into the phone business is more of a limitation than an advantage.
          coffeeshark
          • Limitation, maybe, but...

            Sure it's a limitation, but its better than the alternative. I'm not suggesting that they copy Apple, but they do need to control the value chain better. Consumers see a device that crashes and runs slowly. They blame it all on Microsoft but the problem its equal parts Mircosoft, the device manufacturers, and the complexity of having so many different platforms running your OS.

            And my apologies for my original comment being so short. My first try got erased because I had to create an account. I got lazy but I should have taken time to rewrite it.
            oneppo
    • Big mistake????

      Obviously you dont get it, Microsoft could build a phone and sell millions just like iPhone but guess what? the iPhone is one product hence only selling millions. This strategy means more phones, more brands and a wider view of the market as a result, hence when all the brands are combined the potential is billions of phones using MS software/os's instead of millions.

      Remember that MS doesn't profit from the pc's that are sold, the companies that build them do, they profit from the companies installing Windows on those PC's hence Microsofts dominance in the PC market this will be the same for smartphones.

      The user is not locked in to one manufacturer and one product, they can buy a samsung smartphone or a sony smartphone and so on, each having its own characteristics and features hence more choice for the user.

      As Mary said, win mobile doesn't function well on every device its installed on with so many manufacturers doing there own thing, by creating a guideline, what there actually doing is ensuring that win mobile functions flawlessy with all phones it is installed on that follow those guidelines and still enabling the manufacturers the freedom to be unique in there designs and incorporated technologies.

      The units sold by all those manufacturers combined will go into the 100's of millions and possibly billions instead of millions hence MS gains a wider view of the smartphone market which it can then utilise to promote its mobile software whilst dominating the smartphone industry i.e. Apple may have (and i'm not using real figures just making a point) say 12% of the smartphone market with the iPhone and the other 88% is held by a range of other mobile manufacturers, if those other manufacturers decide to use win mobile guidelines for there smartphones MS will end up with 88% of the smartphone market, hence dominating the industry in much the same way it dominates the PC industry.

      MS strategy is not about trying to sell one product to the whole world, that just isn't gonna happen, for Apple, MS or any other company because we all have our own likes and dislikes its called individualism. But by putting software on a range of devices produced by a range of manufacturers you have the potential to dominate because no matter what choice you make based on your likes and dislikes, the underlining software is still gonna be the same.

      They kill to birds with one stone, a more stable smartphone os with a wider view of the total market.
      mrjoctave
    • Hardly a mistake

      the first mistake is assuming you know the inner workings at Microsoft and what it is they are after and what their capabilities are.

      The second mistake is comparing two different revenue models (Microsoft and Apple).


      GuidingLight
  • Good approach

    Microsoft needs to leave the manufacturing of the phone to knowledgeable partners, as it does the PC business.

    While this doesn't allow for locked-down environments like the Mac or iPhone, it makes up for it in allowing multiple partners the chance to contribute and profit, which also allows for different design choices and more options for the consumer.

    Also, if MS does limit the spec to only a handful of manufacturers, there is a subset of 'approved' products from the spec, which will (hopefully) reduce issues with hardware.

    Putting the expenses of a hardware phone unit onto their backs would be detrimental.

    A phone that combined zune mobile with skybox-type services would offer a real choice to the connected user. The unification of MS services seems so close, but yet so far away, and I'm hoping they get it right.
    coffeeshark
    • I've always felt that MS and Apple have their

      strengths and that their strengths were also each companies greatest
      vulnerability. MS is the Jack of all Trades type company and Apple
      attempts to be the Master of some. Each track leads to success and
      failure for you can't please everyone. I prefer Apple's way of doing
      things but I know of many who do not.

      I'm not sure either company could or would find greater success in
      trying to do what the other does. Nor am I certain that there is a
      solution in tying out a hybrid solution.

      Still it would be interesting "IF" the market had room from a separate
      company that did try to do things in the middle of the two extremes.

      Pagan jim
      James Quinn
      • agreed for the most part

        I'd say that you're right for the most part, except that I think MS is trying to become the "in-between" company by doing some hardware. Maybe that's why they flounder sometimes when they stray from the software-only model.

        But MS can't do an Apple - they can't go into that sort of production and control. They support too many OEMs to start producing the MS Computer and the MS Phone. By more tightly controlling the reference design, they are doing as much as possible while not destroying the OEMs they support.

        That's not counting legal issues, esp in the EU with anything remotely resembling a MS-branded PC.
        coffeeshark
        • Here's where Apple might actually gain leverage...

          If Apple moved into OEM agreements with a limited number of companies, with strict control of approved designs, they could build out the market share for OS X without having to ditch the Macintosh hardware platform.

          They could have the best of both worlds.
          RationalGuy
          • 'strict control'

            Strict Control is the hard part. Unless you control manufacturing, you'll always be subjected to the quality of the manufacturer and distributor. Any OEM agreements of that sort would dilute the Apple brand reputation, and would also bring down costs (and therefore perceived 'value') of the systems.
            coffeeshark
          • That would only serve to bolster Macintosh ...

            ... the hardware platform, that is, as a premium brand. It's a win-win.

            And it's not impossible to achieve strict control. OEMs like Dell and HP are really computer assemblers, not manufacturers. They receive parts made both others and slap 'em together and ship 'em out the door. Apple simply has to agree on an acceptable systems parts list with OEMs and set up some oversight to mandate compliance.
            RationalGuy
  • Why? Well.... here's why.

    "So why ? in spite of continued and repeated denials by Microsoft ? do reports continue to surface that Microsoft is going to deliver a smartphone?"

    Because somewhere along the road, journalism got mixed in with the original idea of blogging (ie: gossip mongering and opinion exposition) and the latter won.

    Don't get me wrong Mary Jo, I think the world of your column and you're one of the better techblog writers out there so I'm not pointing fingers at you personally, but a lot of what I read in the techblog world isn't about what *is* - it's about what *might be* - and the more sensational the rumour the better. When it is about what is, it's often more about promotion of a preferred platform or technology and the tearing down of all others often without a lot of real understanding of the situation.

    This entwining of the lurid with the confrontational is making every techblog entry sound a bit like the tech equivalent of a debate between Rush Limbaugh and Al Franken.

    That's why.

    Oh and it's "choosing" not "chosing" in para 3 sentence 1. :)
    TheWerewolf
    • Exactly

      When last time TimeOnline posted an article saying msft and yahoo made a deal, and no one say a word afterwards, I start to understand what is going on in the journalist world. do we still call them journalists? When we say jourlism, first thing is TRUE, second is NEW. Right now the only thing they care is getting people's attention. what a world?
      jk_10
    • another factor

      Thanks for the vote of confidence (and the typo correction).

      Another factor (or two) playing in here is:

      1. When a vendor won't outright deny something, it fuels incorrect rumors. Apple is infamous for this. But Microsoft is taking a page from their book. Microsoft denied the latest smartphone rumors to the WSJ and CNET. The rest of us got "no comment." To many "no comment" incorrectly means "it's true and we don't want to confirm."

      2. Analyst reports often state things as facts that are speculation. What seemed to kick off the latest round of MS phone speculation was one Wall Street analyst's report. He said he heard from his sources MS was doing a phone. In the small print he noted it might be a reference design. Many journalists and bloggers assume the analysts have inside info from the vendors. I don't think many of them do anymore.

      As I noted before, because this info. is very sensitive, I have to couch my sourcing on it -- which makes it look more speculative than I feel it is. But I'd rather protect my sources than make my post more definitive. That's a trade-off... MJ
      Mary Jo Foley