And three reasons it won't
Microsoft has a relatively long history with mobile operating systems, stretching back to the mid-1990s and Windows CE. Developed originally for "embedded systems," Windows CE quickly found its way into PDAs and eventually phones, and while consumers never warmed to the platform, it did achieve a level of success in the enterprise.
4. Will: Moving beyond tablets and smartphones
Tablets and smartphones are all the rage today, but neither became popular overnight. Who knows what devices will catch fire in coming years?
Chris Fleck of Citrix believes that Microsoft should do its best to bring new classes of mobile devices to market. "The Windows Phone hardware today is good enough to use but not innovative enough to prompt users to change," he says. "A smartphone was a phone plus a PDA. Now, there's an opportunity to develop 'Nirvana phones.' Take the phone and do more with it. Dock it. Connect it to virtual desktops. Connect it to high-resolution video displays."
Of course, such devices exist today — the Android-based Motorola Atrix being the best example — but they're not really capturing consumers' attention yet. As prices come down, that should change, perhaps giving Microsoft just enough time to work on its vision for the so-called "Nirvana phone" before competitors beat them to the mobile punch yet again.
1. Won't: Apple and Android's head start
Windows Phone 7 just came out last fall, meaning that iPhone and Android are generations ahead of Microsoft. Making matters worse, Microsoft has been lollygagging when it comes to updates, which are crucial as Microsoft plays catch-up.
"I would prefer to see much more frequent updates, rather than one big dump. As opposed to 500 updates per year, all coming at once, how about 40 each month?" says Philippe Winthrop, managing director of The Enterprise Mobility Foundation.
The second-generation of the Windows Phone 7 OS, Mango, was released to developers in May, but Mango-based phones won't be out until the end of this year. Meanwhile, iOS 5 phones are due out in the fall, meaning that Apple will have gone from the original iPhone to iOS 5 in less than four years.
Google hasn't been sitting on its hands either. The first Android phone came out in the fall of 2008, and Android Ice Cream Sandwich is due out at the end of this year. Moreover, Ice Cream Sandwich is intended to assuage one of Android's biggest drawbacks, OS fragmentation. Ice Cream Sandwich combines features from Gingerbread (for smartphones) and Honeycomb (for tablets) and will standardize updates across devices from various manufacturers, leading to a more consistent user experience.
2. Won't: The rate of change in the mobile market
Microsoft is accustomed to the slower rate of change of the PC market. Wait a few years between major OS upgrades? With PCs, it made sense.
With handsets, consumers expect a major OS upgrade or two during the short life cycle of the device, and many gadget hounds don't even wait for the carrier contracts to expire before they get a new mobile phone.
Even those who wait tend to replace phones around the time they sign a new contract, cashing in on handset subsidies. According to Recon Analytics, the average replacement cycle in the U.S. is just less than 22 months.
Not all of those users simply replace the handset with another from the same vendor, nor do they always stay loyal to carriers. According to MetaFacts, the churn rate for smartphone users is higher than it was for feature phones, with 21% of consumers planning to shop around when their contracts are up.
Of course, this means that Microsoft has more opportunities to entice users to change platforms. Compelling device subsidies, product tie-ins with, say, Xbox or Kinect, or even being the first vendor to add some new feature that no one is thinking about today could shift things in Windows Phone's favor quickly.
But once users switch over to Windows Phone, will Microsoft be able to keep them? Other platforms, including the PC and even game consoles, require enough upfront investment that people stick with them for a reasonable amount of time. Will Microsoft adapt to how consumers make choices and develop loyalty, especially when a critical partner - the carriers - tends to rank low on customer-satisfaction surveys?
3. Won't: Apps and marketplace
The iPhone App Store currently offers over 500,000 apps: double the number available in the Android Market. Windows Phone lags far, far behind with about 20,000 available apps. Even BlackBerry, often left out of any discussions about the future of smartphones, provides 25,000 apps.
Of course, size isn't everything in an app store. Certain demographics will favor Android simply because it delivers a larger percentage of free apps.
According to Chris Fleck, vice president of mobility solutions at Citrix Systems, it's also important to remember that apps are a secondary, often even tertiary, activity on smartphones. "What's the No.1 thing people spend time on with smartphones? Email," he says.
Despite the popularity of apps, there are three or four common activities that capture the bulk of our attention. Email, texting, Web search, and of course, let's not forget that these things are phones, or something people are buying to actually talk on.
Windows Phone has a long way to go to compete with apps, but simply offering good voice, email and search goes a long way towards leveling the playing field.
