Will Microsoft's Windows Phone 7 Series Bring Focus Back on End-User?

Software behemoth Microsoft is usually not the company that gets top-of-the-mind recall when someone mentions smartphones. Particularly, in the post-iPhone era, Microsoft's foray into building software platforms for smartphones has been turning into an eminently forgettable chapter. And it is not just mindshare, the numbers speak for themselves. Gartner has recently published its 2009 handset market share figures, and Microsoft's slide is evident. The company slipped from its third position in 2008 to fourth behind Symbian, RIM and Apple, accounting for only 8.7% of all smartphones shipped globally.

Microsoft appears to have recognized the precarious position that it is in, one bordering on irrelevancy in the market for a mobile operating system. And in a manner which is very un-typical of the company, Microsoft chose to tackle the problem head-on with its launch of the Windows Phone 7 Series, which despite being a mouthful, packs a punch. While Microsoft has take a completely different and bold approach to the design of the OS, it is more interesting to see the impact that Microsoft can have on the overall smartphone ecosystem, that increasingly appears to be to shaping up as a bubble that I had earlier alluded to, one dominated by an inordinate focus on mobile applications.

The smartphone market has been in a phase of hyper-attention (and strong growth too, I must add) for the last couple of years. More so with the significant attention that is being paid to applications and their ever-increasing download numbers, particularly from the Apple Store. This overwhelming focus on applications has meant that every player in the telecoms and handset space, and their neighbor, has an app store. However, increasingly, the discussion appeared to be veering so much towards applications, that the overall user experience and a primary focus on the end-user was probably lost along the way. While Apple offered a highly engaged audience for mobile developers, Android with its open approach promised to unshackle developers from the restrictive rules of Apple's vertically integrated ecosystem. Phone launches were accompanied by significant noise on how many applications that users can download. More worryingly, the primary target market for smartphone vendors appeared to be developers and how to bring them aboard. The implicit assumption has been that users will flock to the platform that has more applications. Take the recent announcement of the Wholesale Applications Community from the grand alliance of 27 mobile operators and device vendors which was clearly aimed at attracting developers onto a platform that they control. And this thinking is increasingly becoming more prominent. Indeed, a Wall Street Journal story suggests that the recent purge of risque apps on the Apple store might get developers to abandon ship and move to Android. Like most of the focus in recent times, the end-user is completely missing from the picture. The singular focus on developers is too hard to miss.

I am in no way denying the important role that developers get to play in the smartphone ecosystem. Indeed, I'd attribute the strong success of smartphones as a category to a potent combo of killer apps + high carrier subsidies. However, that should not be reason for any one stakeholder in the ecosystem to upend the consumer's position.

It is in this context that I find the Microsoft approach to a mobile platform refreshing. The UI in itself has eliminated the need for users to jump between applications. While it might be a tiny change in the overall context, however, I view that as indicative of the consumer returning to the forefront. It represents a design where the end-user takes precedence over all other stakeholders. Microsoft's presentation at the MWC has been remarkably bereft of a focus on applications. In fact, the company has gone on to the extent of not disclosing much info for the developer community, reserving it for a separate developer-focussed event.

Microsoft's focus on the consumer, and this time the enterprise category, with exchange, sharepoint and office functionality in-built is likely to work in favor of a significant proportion of enterprise users. In the smartphone space, players including Apple and Android vendors have targeted this segment as an after-thought. Driven by the idea that enterprise consumers can be a profitable proposition, multiple vendors and carriers have tried to push through smartphones into the enterprise, but haven't seen real great successes against the likes of RIM. However, Microsoft's Windows Phone 7 arguably holds the strongest potential for enterprise adoption, thanks to its native feature-set.

Microsoft has, over the years, shown that it has vision when it comes to desktop computing, user interfaces and the like; and this launch certainly proves that they have the potential and capability to boldly think out of the box when it comes to mobile platforms. However, it remains to be seen if this vision can be translated to execution. But as far as I am concerned, I believe Microsoft has already made its contribution in changing the course of the smartphone industry. By bringing the focus back on the end-user, it is forcing its current competitors to acknowledge and act. And in the long-run, despite the success or failure of Windows Phone 7, this development is likely to have a positive impact on the overall industry. Indeed, there are very few, if any, examples of industries that have thrived by focusing on any element of the value-chain that reads other than end-users.

Is Apple Making its Biggest Push for Enterprises Ever?

Is Apple getting ready to finally change gears and look beyond the consumer market? That is what appears on the surface given some of the recent moves coming out of 1, Infinite Loop.

In the rapidly evolving smartphone space, Apple's version 3.0 of its iPhone software marks Apple's biggest move to challenge RIM's domination in the enterprise space. With support for push email, Exchange, voice memos, and (finally!) copy/paste support, the iPhone now appears an option that enterprises can consider. Add to that, support for remote data wipe, hardware encryption, and tethering, and you now have a compelling smartphone, that can finally do all that has been done by a lot of other phones, but in a much more smarter and user-friendly manner. 

The App store that Apple has built also brings a key differentiating point to the table in its favor. While RIM and Microsoft are now making moves into the app store arena, Apple's app store already offers a straight-forward and tightly integrated solution for downloading apps. While enterprises will continue to have security issues around making available their internal apps on a public list, however, it is quite possible that Apple can create customized app stores that allow enteprises the security and privacy that they so desire in creating and pushing applications to their employees. 

Sure, there are a host of challenges that Apple still needs to surmount if its devices/software can even be considered for an enterprise-deployment scenario. However, Apple has its best shot at gaining a foothold in enterprises with its iPhone. With mobile workers requiring increasingly 'smart' devices, and the growing appreciation of vertically integrated solutions, such as the iTunes-iPhone combo, it is only but natural that enterprises consider the iPhone as a compelling alternate to the Blackberrys. It also helps that the iPhone has been seeing what can probably be described as the best growth ever for any smartphone. Apple, though, will have to ensure that it does away with its current adhoc approach and bring more transparency, and a sense of stability to its software release process if it hopes to convince enterprises to sign up.

The App Store Gold Rush

Describing the current flurry of announcements around app stores as anything but a gold rush would be an understatement. Driven by the wild (?) success that the Apple app store has seen, operators, online players, and device manufacturers are making a beeline to courting developers with promises of riches unseen ! With majors such as Nokia, Microsoft, RIM, Vodafone, Verizon, France Telecom, and China Mobile committing to either launch app stores and/or greater co-operation with developers, competition for the consumer's discretionary spending on mobile apps/content is only set to increase. And not to forget, the ubiquitous Google, with its Android Market, which appears to be seeing strong traction with the first wave of customers. However, lost in all this cacophony is the increasing fragmentation that is likely to set in once all these app stores are launched. While Apple has had a strong success with its version, however, a large portion of that success can be easily traced to the limited portfolio of its devices (all of two-iphone and ipod touch), however, the same cannot be said for other app store operators. Numbers are being bandied about on how Apple's store crossed, in two years, the number of apps that Microsoft took over 9 years to build. What is clearly overlooked in this apples and oranges comparison is how apps built for a windows Mobile platform are meant to work on a much wider range of handset portfolio. Ensuring mass customization by using a narrow range of devices, as in the case of Apple, significantly reduces development, porting, and testing costs for a developer.

While development costs are one aspect of the complexity that having multiple platforms entails, a larger problem would be to encourage adoption beyond the early adopters and uber geeks, for creating an efficient billing platform is certainly no stroll in the park. Most of these app stores have exhibited an intention of cutting off the mobile operator from the picture, thereby complicating the billing mechanisms, and consequently risk alienating significant portion of the user base that would prefer the convenience of tying all mobile-based purchases to the carrier bill. And this is where mobile operators believe they can drive home their advantage. The announcements from China Mobile and Verizon need to be seen in this light. AT&T as well appears to be taking early steps with its App Beta program. In Europe, Orange too appears to be hitching the app store bandwagon.

The success that Apple has seen can be clearly traced to the virtually complete control that it has of the value chain; right from the device to the software, to the iTunes interface, to the payment mechanism, and in some cases, down to the operator (thro' exclusive agreements) ! However, the same is not really viable/practicable for any of the other new entrants. Fragmentation is a reality that they have to adapt to. And consequently, they might never be in the same league of the Apple app store. And more importantly, whether they like it or not, it will indeed be very challenging for either content companies or device vendors to create alternate mobile payment gateways bypassing the carrier billing.

The app store phenomenon will likely act as the final nail in the coffin for operator walled gardens. It remains to be seen how operators ensure they can find their collective bearings and work towards creating an ecosystem that offers value to the customer and monies to their pockets !