Smartphone Market: Due for a Shakeup

Three traditional powerhouses in computing and communications -- Microsoft, Intel, and Nokia -- last week kick-started major mobile technology revamps in the face of a quick-changing smartphone and device market increasingly dominated by Apple and Google. (See also "Best of MWC 2010: Highlights From the World's Largest Mobile Show.")

At the Mobile World Congress in Barcelona, Intel and Nokia jointly announced the Linux-based MeeGo mobile operating system, and Micros

oft unveiled Windows Phone 7 Series (WP7).

The new Microsoft software comes out just a few months after CEO Steve Ballmer admitted that the company had "screwed up with Windows Mobile" and was shuffling its mobile operating system unit.

Last week, Ballmer told an audience in Barcelona that WP7 will bring "more consistency in the hardware platform and in the user experience. We had to step back and recast. [Now] we have a chance to make a major impact on the [smartphone] market."

WP7 will likely be running smartphones from a variety of carriers worldwide, including AT&T Inc. in the U.S., in time for the 2010 holiday shopping season, Ballmer added.

The MeeGo software combines features from Intel's Moblin and Nokia's Maemo mobile operating systems and will be available in the second half of this year.

Analysts said that each of the companies had to make a splash to blunt the growing fervor for the iPhone and Android mobile operating systems from Apple and Google, respectively. Microsoft has the added job of maintaining its credibility as a mobile software vendor after multiple missteps, some noted.

"Microsoft had to take aggressive action as Windows Mobile OS was dying a rapid death," noted Jack Gold, an analyst at J.Gold Associates LLC. "The changes might get it some notice, [but] the field is much more crowded, and notice will be harder to get.

Citing WP7's "hubs" feature, which groups functions into categories such as Games and Music+Video, analysts said Microsoft appears to be targeting consumers at the expense of its more traditional enterprise audience.

"[Such features] will not endear Microsoft to its existing base of corporate users who will have to redesign and redeploy their [mobile] apps to utilize this new platform," Gold wrote in a research note. "We don't think Microsoft can count on many enterprises making such a transition/upgrade. Most will stay with older Windows Mobile versions."

At some point, enterprise users of the older Microsoft software will probably find a competing operating system more attractive than WP7, Gold contended. In fact, he suggested that enterprise IT shops and users start looking at potential "end of life" strategies for existing Windows Mobile devices.

Gartner Inc. analyst Ken Dulaney raised similar concerns, noting that Microsoft has not clearly delineated the future for its Windows Mobile 6.5 software. "Will WM 6.5 eventually be subsumed into WP7, leaving [WM 6.5] users out on a limb for a few years?" Dulaney asked.

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