Why Microsoft Should Build An iPhone-Killer

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Bill Gates tells a German reporter that the software giant won't try its hand building an iPhone-killer smartphone anytime soon. Instead, he says, Microsoft will just continue to furnish its Windows Mobile operating system to other phone makers, like Palm, HTC, Motorola, and others.

We think this is a mistake. The smartphone market is exploding: Citigroup projects 50% - 60% annual sales growth for the next several years. Consumers, not businesses, will lead that growth. And besides Apple, few companies are as well-positioned to make a killer smartphone as Microsoft.

Why? Consider Microsoft's presence in your home, office, and online. Despite Apple's recent success, Windows still dominates the computer market. Microsoft's Xbox 360 videogame system is selling well -- 4.3 million units last quarter, more than 17 million to date -- and could soon double as your set-top box. The company's Exchange email server still dominates corporate email, and should for a long time. Yet phones running Windows Mobile have done a lousy job connecting the dots. And companies building Windows Mobile phones today -- HTC, Samsung, Palm -- are only getting more new options for mobile operating systems, like Google's Android.

How can Microsoft fix this? By taking the best parts of its existing products and putting them together in an attractive mobile device.

First steps: Scrap Windows Mobile -- it's a joke compared to the iPhone's portable version of OS X. Figure out a way to sync your phone and PC media as well as -- or preferably better than -- Apple has done. Take the best features of the Zune 2 (better looking than pretty much every Windows Mobile phone) and Xbox and squeeze them into a phone. Design portable versions of Outlook, Word, and Internet Explorer that are a breeze to use. Give us awesome mobile maps with GPS and a portable Windows Media Player that plays anything, like Amazon Unbox downloads and TV shows we've DVRed with our Vista PCs. And give us a mobile version of Halo that looks better than any game on the PSP.

It will take at least a year for Microsoft to design the hardware and software. In the meantime, it needs to find carrier partners, figure out how to hook the phone into Xbox Live and the Zune store for over-the-air gaming and media downloads, integrate elegant (and money-making) mobile ads via MSFT's ad network, and get the thing into stores. This won't be easy, of course, but it's not impossible. And if Microsoft does a good job, it could sell a ton of phones.

See Also: Smartphones Soaring: Good News For Apple, RIM, Nokia
Yahoo's New/Old Mobile Strategy: Long Live The Deck


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17 Comments

Mark said:
HA HA!
This guy has a budding career as a stand up comedian-or is today April first?
He sounds like the type you could sell not one, but THREE Brooklyn bridges to.
Or one hundred miles of prime oceanfront property to in Iowa.


April 1st-right? I dont have a calendar nearby

Letting MS fumble into this game all but guarantees Apple will stay on top with their junk forever.

I am embarassed to say this since I use (or try to ) use Vista-but Microsoft is run by a bunch of idiots;
With their billions, youd think they could hire more than just fresh out of 2 year college kids as software designers-or is would that be High School?
RJ said:
The Microsoft Jesus phone! Hahaha!

We wait for the second coming of Jesus before we see this monster come to market.

It'll be more like the Frankenstein phone. Microsoft will piece this monster together and try to make it work, like intergrating parts from a junk yard.

And when that Thing is done, the iPhone will have be in heaven and a new replacement technology will have made smartphones a thing of the past.
Wayne said:


It won't work. Microsoft is not a hardware company. When the do get into hardware they end up with something like the XBox 360 - a disaster (note that the Zune is actually designed by Toshiba, and the keyboards and mice by Logitech).

Combining the Zune and the Xbox 360 would be a recipe for failure. Products that sell well, like the Wii are designed to solve an issue. Someone at Nintendo finally realized that the issue in the gaming business was that consoles only sold to a small subset of the population. The Wii addresses this, and has had popularity far outside the hardcore gamer community.

Very few companies have any skill at doing this. Even fewer companies manage to do it on a regular basis. Apple has managed several times in the last 20 years - the original Mac, the IPod, and the IPhone all addressed issues that other people didn't realize existed, did so successfully, and sold a lot of product.

Microsoft's strength on the other hand has been deal making. The deals that they arranged with the computer OEMS to get first DOS and then Windows pre-installed on systems are the basis of Microsoft's success, not designing solutions.

I don't think that Microsoft can make a phone that would be a competitor to the IPhone. I will however go on the record and state that someone will - probably within the next 6 months, and that the company will be Japanese. Of course the above is worth what you paid for it .
Matthew said:
Hi,

Just to pick up on something Bob said, about Win Mobile currently being able to do more than the iPhone:

Apple has deliberately held back exposing the power of the iPhone OS (OS X, for the technically inclined) in order to get a fully functional product which does a limited number of features.

The bad side is you get a smaller feature set, the good side is that all of these features work and in most cases, work very well.

This is a smart strategy when trying to establish a product in a very competitive market.

To say Windows Mobile does “many many things the iPhone can't” is a very bold claim. OS X has a heap of advanced frameworks: think of it in cores. CoreAudio, CoreVideo, CoreImage, CoreText, CoreAnimation. The power of these will be seen in February when the phone is opened up.

Win Mobile is a more established product, but this comes at a cost. Whilst iPhone runs an OS X built in the early 00s, Win Mobile has a codebase dating back to the mid 90s and Windows CE.

So from this perspective, Dan Frommer is exactly right. A fresh start is needed.

Just my perspective, feel free to disagree.
Hilarious! said:
Yeah, right..I can just imagine what a CLUSTER F&*^5 that phone would be like......

Pigs will fly before they make an iPhone Killer.

As soon as a company likens their product to a "Pod Killer"-it's sure to fail.

Snort Snort....



HDCL said:
It is a "razors and blades" business approach. The games are the blades and where the money is made. Halo 3 made $300MM in Revenue the FIRST WEEKEND. Although Microsoft does not report out profitability of individual business units, I believe the business unit XBox is part of is overall profitable, except for the multi Billion $ write off they took to fix the "red ring of death" issue on defective 360 consoles.
HDCL said:
It is a "razors and blades" business approach. The games are the blades and where the money is made. Halo 3 made $300MM in Revenue the FIRST WEEKEND. Although Microsoft does not report out profitability of individual business units, I believe the business unit XBox is part of is overall profitable, except for the multi Billion $ write off they took to fix the "red ring of death" issue on defective 360 consoles.
Don said:
So Microsoft's Xbox 360 videogame system is selling well -- 4.3 million units last quarter, more than 17 million to date? Considering that according to gamespot, Microsoft loses $126 per unit sold, Microsoft's desire to be in the gaming market has cost them 2.14 Billion dollars in losses.

How many more successes like that can they afford?
Bob said:
"BTW, the former is what I believe they're attempting to do currently, although their projected timelines are asinine (like 2009 for the next version of Mobile with a better UI)."

Sorry, was multi-tasking there. Should read "latter" not "former" (i.e. modify the existing Mobile is their current focus).

Bob said:
Sorry, let me add that your approach (e.g. the Zune-inspired route) may be the right way to go longer term. So modify the UI for Mobile asap now, get it out, and then work towards your vision over the next year or more likely two.

BTW, the former is what I believe they're attempting to do currently, although their projected timelines are asinine (like 2009 for the next version of Mobile with a better UI).
Dan Frommer said:
That might also save some of the third-party development that's been done so far. But at very least, a huge overhaul.
Bob said:
Agree with most of your points. But disagree they should scrap Windows Mobile. It does many many things the iPhone can't. What's missing is an equivalently intuitive interface. That can be solved a whole lot cheaper and faster than starting over from scratch.
Cheetos said:
Building an iPod-killer and actually have it "kill" the iPod are two different things. Point in case: the M$ Zune.
Dan Frommer said:
Because who else will?
dB said:
Why should microsoft build it? I'm quite content to have a piece of the digital landscape free from Redmond's control. Please, Microsoft stay away...please.

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