In a smartphone world that was increasingly defined by Apple and Apple clones, Microsoft needed to step out. It could have, as it initially did with Windows, create an Apple clone that was better than Google's Android platform, but instead Microsoft went back to the drawing board and created something quite different. This was a nice suprise to a lot of folks, but different is vastly riskier. That's exactly what Apple did when it created the iPhone, which stood in sharp contrast to the other phones then in the market. As a result, Apple virtually took that market over. Can Microsoft do this with Windows Phone Series 7, or more appropriately, will it?
The Problem with Being Different
Apple convinced the market that it wanted something different with the iPhone through a core strategy of initially presenting the product in a compelling way, then marketing its unique advantages in a way that wrapped lines around buildings. Microsoft has only done this once with a platform product, with Windows 95. It did it to a lesser degree with the Xbox, but that was a complete offering. Windows Phone Series 7 is neither a standalone operating system nor a complete system, so Microsoft can't even own the launch of the actual devices.
At the iPhone introduction (it's worth watching again) Steve Jobs held up a compelling device and got people focused on the actual product. Compare that with Microsoft's Windows Phone 7 launch, where there was no real hardware to excite the audience.
Fortunately, the presentation of the OS was actually very attractive and it seemed relatively easy to use.
Because Apple builds, controls (owns the user experience), and markets the iPhone itself, trust isn't that important. Apple typically dictates terms to its carrier partners, which is likely why a bunch of them, including AT&T, were on Microsoft's stage. However the original equipment manufacturers (OEMs) like HTC have been drifting over into Google's camp because of past disappointments with the Windows Mobile Platform. So getting these companies to commit resources back to Microsoft for initial phone development and marketing will be more difficult. But Google isn't managing trust very well at the moment, causing some to drift back. It has blindsided many of its partners with the announcement of the ChromeOS and Nexus One, and has a tendency to operate unilaterally, which doesn't make its partners any more comfortable.
Microsoft will need to re-establish trust -- something it has struggled with for two decades -- if it wants the support of phone OEMs.
Part of Apple's success in the market this decade can be attributed to a robust portfolio of accessories. Granted, this appears to make a bigger difference with iPods, rather than iPhones, but it is still important that the devices work well with a variety of things to pull out and better use the digital content core to the device.
Microsoft has Sync, which could be a competitive advantage if it were more broadly used, but it lacks the needed partner advancements into the non-automotive accessories segment.
Difference needs to extend to the phone design as well. To doing this much work on the user interface and experience, and yet come to market with a bunch of me-too iPhone-like devices would likely repeat the Google mistake. Some of these phones need to be really different and showcase the strengths of this platform. Products like the Dell Mini 5 come to mind as potential offerings, but Dell appears to be going in Google's direction. (Dell was on stage, but what it is doing with this platform has yet to be announced).
If this is just an iPhone with a different user interface, it still might do better than Google, but it would forever fall under Apple's shadow. It has to be both attractive and different. Inability to successfully do that destroyed PlaysForSure and hurt the first versions of Zune.
People have to want to buy these phones, and there will be lots of competition. Certainly the carriers want alternatives to the iPhone, much like retailers wanted alternatives to the iPod. But as Zune showcased, that doesn't get you much unless buyers flock to the devices. The initial presentation of the platform, while one of the better ones that Microsoft has done, didn't create the kind of initial passion that the iPod, iPhone and even iPad did.
While Windows 7 marketing has been good, this is vastly more difficult for Microsoft because it has to coordinate with the hardware OEM and the carrier. Apple does this alone, and the lack of complexity certainly shows in the results. The successful Droid campaign was done by Verizon without much help from Google or Motorola. Someone has to step up to this requirement, and Microsoft may not be able to, the OEM may not be able to afford to, and the carrier may be unwilling to, given other carriers may have similar devices.
Microsoft shared a business focus with Research in Motion on its platform, and certainly this new platform won't abandon the centralized control and security from that partnership. This is one of Microsoft's sustaining advantages. However, t could be repeating the mistake it made in launching Windows XP by being focused on consumers first and businesses late in the cycle.
People tend to be binary with these devices: Either they are consumer- or business-focused. Microsoft's initial Windows Phone 7 presentation screamed consumer, which could jeopardize the perception that Microsoft is a better business solution. But if it does a poor job in correcting this problem, consumers might find the device less attractive as well.
Wrapping Up: High Degree of Difficulty
Microsoft announced with the Windows Phone 7 Series a surprisingly good platform that exceeded expectations. However, there's a high degree of difficulty surrounding a platform like this, which requires the tight coordination of carriers and hardware OEMs without being dictatorial. This is one of the reasons Apple did its own phone, killed the Mac clones in the '80s, and why Microsoft killed PlaysForSure and did the Zune.
Google did demonstrate that with the right partner (Verizon), you could create some excitement, but even that effort isn't generating anywhere near the numbers in volume or profit that Apple enjoys. The launch of the Windows Phone 7 series is a good start, but the really hard work is yet to come.