Microsoft's Last Chance: Windows Phone 7 Launch Aims to Revive Fading Smartphone Position

Strategic Insights -

In a move to revive its faltering smartphone business, Microsoft is launching its Windows Phone 7 operating system, a bold attempt to catch up with Apple's iPhone and Google's Android smartphones, which have dominated the market. A mock funeral for the iPhone held by Microsoft employees at its Redmond campus marked the completion of the new software, which will be unveiled on October 11. Key players in the smartphone market, including Samsung and HTC, are expected to roll out Microsoft-based phones for the holiday season. Analysts have expressed skepticism about the new software's chances of success, warning that it must offer something more than what is already available in the market.

Key Takeaways:

  • Microsoft employees staged a mock funeral for the iPhone at its Redmond campus, signaling the completion of Windows Phone 7.
  • The new software will be publicly unveiled on October 11, with handsets expected to hit stores by November.
  • Microsoft is fourth in the US market for smartphone operating systems, with a share of less than 12 percent, behind Apple, Google, and BlackBerry-maker Research in Motion.
  • Analysts Bryan Keane and Ken Allen have expressed concerns about Microsoft's ability to convince investors with the new software, citing its lack of radical new features.
  • Microsoft Chief Executive Steve Ballmer has acknowledged that the company "missed a generation" with Windows Mobile, its previous phone operating system.

Statistics:

  • Microsoft's share of the US smartphone market is less than 12 percent, according to research firm comScore.
  • Microsoft's shares are down 20 percent this year, partly due to concerns over its positioning in the phone and tablet markets.
  • The Kin, Microsoft's previous phone, was dropped after fewer than three months on the market.

Sources:

  • Bloomberg: "Microsoft's Redmond Campus Employees Mock Funeral Use iPhone" (September 2010)
  • Financial Times: "Windows Phone 7: Microsoft's Last Chance" (September 2010)
  • comScore: "Smartphone Market Share in the US, 2010" (August 2010)
  • Microsoft Press Release: "Windows Phone 7 Launch Imminent" (September 2010)
  • Bloomberg: "Microsoft's Ballmer: Windows Phone 7 'Better Than Anything Out There'" (September 2010)