Market Watch

Microsoft Launches Windows Phone 7

October 22, 2010

Need more Information?

Display Driver IC Forecast

Microsoft unveiled launch devices and set launch dates for the starting lineup of its new Windows Phone 7 mobile operating system (OS). Microsoft claims over 60 mobile operators in 30 countries are committed to launching Windows Phone 7 devices.

Launch manufacturers are Dell, HTC, LG, and Samsung. The handsets conform to a Microsoft-set 'chassis', which is the minimum hardware specification necessary to operate the OS. On top of that chassis, manufacturers have tried to differentiate by offering different screen sizes, improved cameras or sliding keyboards.

Windows Phone 7 handsets launch on October 21 in Europe and November 8 in the US, where it will be limited to GSM operators AT&T and T-Mobile for the first months. Launch on Verizon and Sprint will follow in early 2011.

This is a major re-launch for Microsoft's mobile OS. The user interface (UI) has been entirely re-done and the platform now includes tight integration with Microsoft's Xbox Live multi-player gaming community.

Microsoft has also secured additional content offerings and services for Windows Phone 7:

  • Zune content services will now extend music and video store to handsets. Zune music and video stores have lately experienced a substantial level of traction, mostly driven by its addition of Xbox consoles. According to Screen Digest research, Zune has become the second most successful digital video store behind Apple's iTunes in the US and Europe.
  • Microsoft has also inked partnerships with third party service providers such as Spotify and AT&T U-verse, both already available on the iPhone.

Microsoft underwent a transition period which saw them phase out the elderly Windows Mobile 6.5 all the while making sure Windows Phone 7 was a compelling release from day one. In a very competitive, highly scrutinised smartphone market, occasions to leave good first impressions are indeed rare. In that respect, the new OS is a welcome - yet risky - fresh start.
Today's smartphone market is nowhere near what Microsoft is used to in the PC world. More realistically, Microsoft will have to behave like a new entrant, with heavy investments similar to its push into console gaming. Xbox live integration is actually an important differentiator, especially in North America where Xbox is the most successful: Screen Digest expects Xbox Live to reach 20m US active accounts in 2011.
There are however some significant steps to take for Microsoft to succeed:

  • Succeed at launch, especially in the US, despite competing with the iPhone on AT&T and without any help from Verizon and Sprint.
  • Ensure a steady software update roadmap, support the installed base and provide easy upgrade paths for all licensed manufacturers
  • Find its place - with end users and developers - on a fragmented and crowded market among the iPhone, Blackberry, Android and Nokia devices.
  • Help hardware partners develop devices that are compelling enough to command margins equal or superior to Android equivalents.
  • Create a sustainable mobile brand in smartphones, where Microsoft only enjoys limited recognition.
  • Grow a vibrant content ecosystem on top of its Xbox and Zune properties.

For these reasons, Windows Phone 7 is far from a guaranteed homerun, but operator partnerships and heavy promotion should ensure at least a decent initial take-up .

Since mobile is seen as the next relay for growth in personal computing, Microsoft cannot afford not to be a major player. Should Windows Phone 7 fail to generate sufficient traction in the next 24 months, Microsoft might have to resort to seeking market share through acquisitions.

Screen Digest expects 20m shipments of Windows Phones in 2011, up from under 15m in 2010.

Find Out More > iSuppli | Screen Digest Mobile Media Intelligence Service

Research by Market
Media & Advertising
Share facebook Twitter Google Plus Linked In Add This Contact Us