Microsoft CEO Steve Ballmer acknowledged the company has made missteps in mobile, but said that with the imminent launch of Windows Phone 7, the software giant has what it takes to claw back market share and mindshare from Apple's (NASDAQ:AAPL) iOS and Google's Android.
Microsoft also confirmed rumors that it will hold a launch event in New York City Oct. 11 in conjunction with AT&T Mobility (NYSE:T) to formally launch the operating system, which many analysts see as a make-or-break situation for Microsoft. Analysts at Goldman Sachs recently cut Microsoft shares and said in a research note that the company needs to establish "a firmer foothold in the growing migration to mobile devices" in order to assuage investor concerns.
In an interview with the Wall Street Journal, Ballmer said Microsoft is a step behind in smartphones. "In a sense, you could say we missed a cycle," he said. "We had some execution issues from an R&D perspective. In the time frame since the last significant release certainly the industry has moved, the technology has moved, the hardware has moved." Microsoft released the latest version of its Windows Mobile platform, 6.5, last fall.
Nonetheless, Ballmer said Windows Phone 7 represents a tremendous opportunity for Microsoft. The company expects to make money from licensing the software--so far HTC, LG and Samsung are high-profile supporters--but Ballmer also said the company can score revenues from search as well as commerce and subscriptions.
The design of Windows Phone 7, which has been well-received, is based around hubs--and is a sharp departure from Microsoft's past. "The market's still pretty nascent, but at the end of the day, I think the wall-of-icons [on iPhones and Android devices] is getting pretty complicated for people," Ballmer said. "That doesn't mean people don't want applications, though I'm not sure that's really the way the average person really wants to work. Putting the activities that are most important in people's lives and the people that are most important in people's lives front-and-center through these hubs, I think we're going to capture hopefully the imagination of quite a good number of people."
Ballmer said Microsoft's top priority will be to sell phones, "and if we sell a lot of phones, good things are going to happen."
AT&T, which is the exclusive provider of the iPhone, as well as Research In Motion's (NASDAQ:RIMM) BlackBerry Torch, will be a premier partner for the platform.
According to both PC Magazine and Engadget, T-Mobile USA representatives also will be present at Microsoft's Oct. 11 event. T-Mobile, a strong supporter of Android, was named as an early partner for Windows Phone 7, but has not tipped its hand on when it might launch Windows Phone devices.
"We've been impressed by the smart design of Windows Phone 7 Series and look forward to our continued partnership with Microsoft," Paul Cole, vice president of product development for T-Mobile, told FierceWireless last week. "We think our customers will enjoy the truly integrated experiences Microsoft plans to deliver."
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