Windows Phone 7 a good start, but questions persist

Analysts say Microsoft has to rise above strong competitors like Symbian, BlackBerry, iPhone

Early reaction to the refreshed Windows Phone 7 Series operating system boiled down mostly to: "Microsoft desperately needed to do something."

And, analysts said, whether the update is a successful one for Microsoft depends on the answere to a variety of 'what if' questions.

The 'what if' questions cited by several analysts center around whether Microsoft can get its new mobile operating system, Windows Phone 7 Series (WP7), noticed in an increasingly crowded market that includes powerhouse products like Nokia's Symbian and Research in Motion's BlackBerry along with highly regarded upcoming OS's like Apple's iPhone and Google's Android.

"Microsoft had to take aggressive action as its Windows Mobile OS was dying a rapid death in the market," noted Jack Gold, an analyst at J. Gold Associates. "The changes it has made [with Windows Phone 7 Series] might get it some notice, although the field is much more crowded now that it once was and notice will be harder to get."

The new operating system comes as Microsoft has suffered declines in the mobile operating system business.

WP7 OS features several user interface improvements, including the concept of "hubs" that groups functions such as "games" or "office." The "games" hub will be synchronized with the Microsoft Xbox live online community, while the "music+video" hub syncs with the company's desktop Zune jukebox and music store software.

Such "hub" features are a clear play for the consumer market, which has analysts worried that the strategy could leave Microsoft's traditional core audience of enterprise users and developers in the dust.

"The change will not endear Microsoft to its existing base of corporate users who will have to redesign and redeploy their [mobile] apps if they are to utilize this new platform," Gold wrote in a note. "We don't think Microsoft can count on many enterprises making such a transition/upgrade. Most organizations will stay with older Windows Mobile versions, especially those with ruggedized devices."

Then, Gold said, the suppliers of handhelds using older Microsoft software find a competing OS more attractive than WP7. Gold suggested that enterprise IT shops and users start looking at potential "end of life" strategies for existing Windows Mobile devices.

Gartner analyst Ken Dulaney called WP7 "a good start" for Microsoft, but raised 'what if's' like "will they have great hardware?" and "Will they be able to hit the right price points?"

Dulaney raised similar questions, noting that Microsoft has not clearly delineated the future for its current mobile OS, Windows Mobile 6.5. "Will WM 6.5 eventually be subsumed into WP7, leaving 6.5 users out on a limb for a few years?" Dulaney asked.

Will Stofega, an analyst at IDC, said Microsoft might be able to wean users slowly off WM 6.5 and prior versions.

Success of the new WM7 will depend heavily on how manufacturers adopt and deploy WM7, Stofega said.

But Stofega's big 'what if' question for WM7, as oblique as it sounds, is" "will it inspire confidence?" A lot of market confidence in WM7 will stem from how quickly Microsoft delivers the software, and how quickly it is deployed by manufacturers, he added.

"What they don't want to do is piss off people," which was apparently Stofega's reference to how Microsoft CEO Steve Ballmer last fall told investors that Microsoft had "screwed up with Windows Mobile."

One subject that left analysts scratching their heads is how WM7 fits with the reported Microsoft Project Pink Turtle Phone . That product, according to blog citations of documents at the Federal Communications Commission, will be a slider-designed phone with a physical Qwerty keyboard being built by Sharp for Verizon Wireless in the U.S. to be released sometime in the spring.

"They still have not reconciled Pink and WM 6.5 in this [announcement]," Dulaney said. "Where does Pink fit?"

Stofega said Pink is a code word for an "alleged Microsoft device" but added that it really could be at the moment a creation by "bloggers just trying to stir up things."

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Tags GartnerGoogleJ. Gold AssociatesMicrosoftsteve ballmerWindows Phone 7 Series

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