Very recently Microsoft showed a convincing new user interface that indicated a new start at their mobile OS efforts, renamed Windows Phone 7 Series. This week they pushed ahead and presented more details, with fascinating prototype openness, of its upcoming phones, including their application platform. Now it is even clearer how fundamentally Microsoft has changed its approach. For the first time, they have literally put the end user first while building the new OS and application platform. By taking a stronger grip of the hardware specifications, while implementing a strong platform for application development and provisioning and defining a “common user experience”, they aim to ensure that end users will flock, thrive and stay.

The initial core elements of this strategy are similar of Apple’s iPhone:

• Microsoft will do more in both hardware and software. Initially, smartphone manufacturers will be limited to three reference hardware chassis designs. Most likely, Windows Phones will look alike, irrespective what OEM they come from.
• Windows Phone applications will only be sold through Microsoft’s “Windows Phone Marketplace”, which will have “policies” for approval
• No support for storage expansion through e.g. microSD cards
• No background processing for third party apps
• No native applications in the new OS
• Microsoft Location Service and Microsoft Notification Service as one point shopping for location and background alerts
• No initial support for copy/paste

On the other hand, Windows Phone will have Flash support and the Marketplace will support trying out applications before buying, as well as operator billing and ad-funded programs…

Several of these decisions are understandable when the user experience is in focus. And maybe this is a middle road in the consumer space between iPhone and Android. But while Apple develops, manufactures and brands Apple devices, Microsoft licenses an operating system to smartphone manufacturers. With Windows Phone 7, Microsoft will limit hardware differentiation and push smartphone manufacturers towards application-based differentiation. By year end, a bunch of new Windows Phone smartphones will surely offer a “delightful and consistent” user experience in a PC-like split between hardware and software but Microsoft’s designs to lure manufacturers and developers look less differentiating than may be necessary to win.

With Windows Phone 7 Series Microsoft has shown the first post-iPhone user interface that clearly differentiates from the Apple style and an impressive capability of change. It is gratifying that Microsoft is acknowledging the role of the emotional user experience in the modern smartphone market, but both manufacturer, developer, and operator locomotives are needed to ensure success with users. Operators still represent the most important smartphone distribution channel. Before the year is over both iPhone and Android will have moved forward, most likely offering form factors and functionalities differentiating them from the Microsoft threat, in addition to an even more overwhelmingly larger amount of apps. iPhone and Android have eager operator partners who continue to see different benefits from using their phones targeting primarily “consumer” segments (for lack of a better word).

If Microsoft has struck the right balance between freedom and control, they will certainly still be in the game, but final success is only possible if operators manage to reposition Microsoft Windows Phone 7 Series as consumer smartphones, breaking away the traditional Microsoft position as an “enterprise thing.” The branding exercise of an “LG Microsoft Windows Phone” towards consumers is definitely less trivial than selling an apple.

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