Tuesday, August 31, 2010

Microsoft 's foray into the phone market

Microsoft is reportedly about to spend big in an attempt to break into the mobile phone market. They are telling people that they are going to spend US$400mil on the coming launch of the Windows Phone 7, and will probably spend into the billions when other costs are added up to support an ecosystem much like the Apple apps or the Android.

What do I think of this? I think it is a sign of desperation. This may be Microsoft's last attempt and belated effort to fortify its OS dominance by extending it from desktop to mobile phones. If it fails, the days of the OS stranglehold are over for Microsoft; Android-based products will start to overtake netbooks, and eventually even desktops . That is the reason for this desperate attempt with the Windows Phone 7 launch.

Microsoft is increasingly finding itself sidelined in the high tech race. Years ago, it tried to dominate the entire IT world by buying up any company that might grow into a threat. For some time it was able to rein in all competition due to its stranglehold on the computer's operating system. The IT world has since moved on, and Microsoft is chalking up more failures than success. Its attempt with the Zune to challenge the iPod failed to become a serious threat. Its Xbox has to work hard to keep its share of the games market. Its 15-year development of the "tablet PC" resulted in a few product launches but no takers, while Apple's iPad became an overnight sensation. That must have sent Microsoft's tablet PC development team into a serious bout of soul searching.

Now Microsoft is again trying to spend its way into the high tech fore. If history is anything to go by, I seriously doubt this will work unless it has a mobile phone product that can surpass what the best mobile phones can offer. About fifteen years ago Motorola cohorted with Apple to pour hundreds of millions of dollars into PowerPC advertisements, in an attempt to unseat Intel. In the end, consumers were not swayed and people still made their choice based on the CPU's performance. Microsoft is going to learn the same lesson too. Since it does not have a track record of surprising the world with any innovative products, chances are Microsoft is unlikely to pull a rabbit out of the hat this time.

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