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Microsoft Surface Phone: What It Could Be

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The Microsoft Surface Phone is one of the most highly anticipated phones coming to market and it isn’t even expected until 2017. The most recent rumor has it sporting an Intel Atom X3 processor and the first no-compromise implementation of Continuum, enabling it to work much better as a laptop. Rumored specs include up to 512GB of storage and 8 GB of system memory.

Let’s talk about what a homerun phone might look like.

Windows Phone

The critical problem with Windows Phone has been a combination of underfunding, lack of apps, and a strategy that included buying and then largely killing Nokia’s cell phone business. The iPhone’s unique focus on users and developers did the same thing to Microsoft that Microsoft did to IBM with Windows: It stole the market, and once again showcased that focusing on the user better than your competition does is a winning strategy, ironically first done by Microsoft to both IBM and Apple.

At the heart of the problem was the fact that Microsoft needed an X86 solution to get full compatibility but Intel, at the time, didn’t have a competitive part so, like Apple, Microsoft had to go with ARM. But, unlike Apple, Microsoft didn’t want to create a unique OS. So the initial ARM-based tablets and phones couldn’t pull well from the existing Windows application base, and Windows on ARM felt crippled.

This was almost identical to the problem with OS/2 in that OS/2 couldn’t run 32bit Windows applications and that lack of application support effectively put the final nail into OS/2’s coffin. Windows Phone is on life support now for much the same reason -- Microsoft just doesn’t have enough app support either with Windows or mobile apps.

Surface Phone

Surface tablets showcased that with a far stronger advertising campaign and a Windows business focus, Microsoft could move hardware. Surface sales increased even as the tablet market and the iPad went into decline. But at the heart of this was a near no-compromise solution tied to attractive hardware and very effective marketing.

This same kind of execution is what is needed with the Surface Phone and, if the rumor is true about using the Intel Atom X3, the compatibility problems with Windows applications can be addressed. Suddenly you get a smartphone with the capabilities of a laptop. You just connect a wireless keyboard, mouse and monitor, and your phone becomes a full-on PC, proving a unique advantage to this platform.

Apps

This remains a problem but the problem is not as critical as with a non-business focused offering. Given the fact that a lot of employees carry two phones, the idea of having a business-focused phone that is more secure and could replace a laptop should be popular with executives. And IT would like it because they’d just have to worry about the phone, not a phone and a laptop. But a homerun would be a product that could run iOS or Android apps in a secure container while retaining the PC functionality of the core solution.

The closest thing in market now is the Acer Liquid Jade Prom phone, but it uses an ARM processor, which showcases the limited Windows app support tied to that solution. To be successful, the new Surface Phone has to close the application gap, and an ARM solution, at least right now, can’t seem to do that.

Wrapping Up: Can Microsoft Step Up?

If we were talking about Microsoft before Nadella, its current CEO, I’d say that Microsoft couldn’t step up and that we should anticipate the same kind of miss we got with the original ARM-based Surface, the Zune and the Nokia Windows phone. But Nadella seems to get what is needed and does it, which is why the newer Surface products have sold better and Windows 10 is such a huge improvement over Windows 8. But the bar is to be secure and safe, provide a non-compromised PC experience as an option, and massively close the cell phone app gap. If the Surface Phone hits on all three, we have a player. Missing any one will significantly reduce its chance of becoming successful.

If Microsoft can have a hit with this phone, it would be another powerful indicator that the New Microsoft is very different than the old. If it misses, it would place a cloud over the entire effort. Therefore, getting this right may be one of the most important tasks Microsoft will undertake this year.

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+.

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