Five Ways Microsoft can Defeat iPhone and Android

It wasn’t long ago that bashing Microsoft was as cool as Hootie and the Blowfish and Blossom.  There was no shortage of material – mangled pasting in Office, hideous mobile apps, and spooky Windows error messages that made you build a panic room. Even governments got in on it.  The EU forced Microsoft to remove anti-competitive features from Windows. I think they even made Bill Gates perform The Nutcracker at a Belgian waffle house.  Things have changed.  Google and Apple now make Microsoft seem downright cuddly and lovable. Rather than send CEO Steve Ballmer a teddy bear to celebrate this budding bromance, I thought I’d give him something far more practical – an iPhone! No… I’d like to propose a way to revive Windows Phone 7, the company’s creative, but struggling new mobile operating system. Sadly, these advanced phones are already sharing a discount rack with rotary dial Nokias and the Motorola RAZR MC Hammer Edition.

HITS AND MISSES

In the last 10 years, Apple and Google developed cultish followings, who rumble bloodlessly on gadget blogs and online forums. Both companies earned that passion by acting with clarity and vision, while  Microsoft layered on bureaucracy. Even its best products muster the fanaticism of an efficient clerk at the Department of Motor Vehicles. And there have been successes – XBox, Windows 7, and Outlook. But too many misfires like Kin, Vista, Live, and Windows Mobile.  Often, the company seems like it’s on American Idol – always singing someone else’s song. Open source (Firefox, OpenOffice), cloud services (Netflix, Google Docs), and mobile (iPad, Android) point to a future without Microsoft.  But like a retired Don Corleone, I still feel it has a few hits left. I know some very bright people at Microsoft (sadly, no Godfathers). I’d love to see them bring some needed competition to Google and Apple. Since this battle will likely be fought in mobile, I’ll focus on Windows Phone 7 (WP7, for you gangsta rappers).

YOU’RE NOT FROM JERSEY…

When it came out last year, WP7 was a pleasant surprise, like a plump raisins in your oatmeal. After the patchwork that was Windows Mobile, reviewers expected a Snooki, but found a Natalie Portman instead. (See demo video below.)

TARDY TO THE PARTY?

Sadly for Microsoft, it arrived long after geeks, novices, and Kardashians had already picked sides.  Is it too late to change their mind? Here’s a peek at their competition and who their customers are:

Competitor	About the platform	Who are the customers
iPhone	The iPhone is a closed ecosystem inspired by Kim Jong Il. Everything from hardware to software to media (via iTunes) goes through Apple. If you want to get an application on iPhone, you pay Apple 30% – and it better not contain enriched uranium.	Half see it as an object of desire.  They crave it with their heart and loins.The other half just like a fluid, simple experience. It’s a phone that looks cool, others admire, and wouldn’t scare your mom, like a boyfriend with tattoos on his neck.
Android	Android is open source, but developed by Google.  Despite having lots of apps (120K to Apple’s 300K ), the experience can be clunky and technical.The secret to its success is that it’s given away license-free to phone manufacturers. In exchange, Google knows where you are, what you’re doing, and can blow up your phone, if you misbehave.Android is also evolving quickly. Because of its voice command and intimate knowledge of you, it’s now legal to marry your Android in Massachusetts, Vermont, and Osaka.	The customer group is divided in three:Techies who love complex, powerful, open systems they can tinker with.Young and smartphone savvy customers who wish they had an iPhone, but couldn’t stand AT&T;, so they picked the consolation prize.Mass consumers who didn’t know what they were getting into.  They wanted a smartphone but ended up with a smartphone kit. They are over-matched by the power and clunkiness of the phone.
Blackberry	Blackberry is also a closed system. With its share shrinking, Blackberry is fighting to hold on.  It has a shaky foothold with corporations and its consumer phones are unimpressive. They are underpowered and lack the apps and hardware prowess of Android or iPhone.	Again, two main groups:Those who need it for work, but openly envy the speed, apps, and big screens of Androids and iPhones.Crackberry addicts who love the hardware keyboard, email, and messenger functionality.
Windows Phone 7 (WP7)	Microsoft charges manufacturers a licensing fee, just like Windows for computers.  The hardware looks like Android’s because it’s made by the same manufacturers. (Like the Chanel bag…and the fake Chanel bag in Chinatown.) While the experience is good, the phone has few apps, no buzz, and some basic features missing, like copy and paste.	We haven’t met them yet.  A million were shipped, but sales were not disclosed. Since WP7 is not backward compatible, even old Windows Mobile customers, like me, have likely embraced the little robot, or worse, married it.

WHO’S LEFT AT THE DANCE?

Microsoft could end up incinerating boatloads of shareholder cash (and unsold handsets) trying to be all things to all people.  There are already phones doing a great job in the mass market.  Still, three attractive segments are left at this dance. But it’s just a matter of time before some doughy, pale geek from Mountain View pushes them, anemically, into his Prius.  These segments  are:

1. Gamers – there are games on iPhone and Android, but none that make gamers salivate, especially younger ones. Coincidentally, X-Box does.  More on that below.
2. Businesses – ever try to edit a document on a Blackberry?  Exactly.  Ever try to work with attachments or run business software?  Corporations would love to make their employees more productive (…subservient?) on the road. Employees would love to have bigger screens and a better experience than Blackberries, for some well-earned slacking off, and “business” videos. Since many companies have already moved from Notes to Outlook or webmail, the Blackberry isn’t mandatory.
3. Non-Apple Multimedia (especially video) – Let’s face it, Apple does a great job with media, but it does have an Achilles’ heal – it’s anchored to iTunes, which is bloated and clunky, especially on the PC.  Android isn’t, but its the Martha Stewart of multimedia – if you want it, you have to stitch it together yourself. All kinds of pay and non-pay channels and programs are scattered among Netflix, youtube, Hulu, ABC, NBC, BBC, etc.  If only someone could bring them all together in an elegant way…

WHAT SHOULD MICROSOFT DO?

The mass-market is crowded. Android and iPhone will be hard to beat with the current strategy. The better approach, I think, is to create 3 optimized WP7 flavors:

1. The XPhone (or Kinected phone) 

• Use the company’s super successful developer relationships for XBox to port some of the top titles – exclusively – to the XPhone. Hell, mandate it in their contracts.  Microsoft is the Wal-Mart of gaming – it controls distribution.
• Device specs (controls, speed, processor, battery life, certified add-ons, etc.) should be optimized and certified for serious gaming.  The company has the relationships and the expertise to make this a reality.
• Create meaningful ways to link XBox and XPhone, like creating your characters on the phone and playing them on the XBox.
• Wouldn’t it be interesting to also partner with Nintendo to run current Wii games?  Hmmm….
• Negotiate cheaper data and family plans with networks to target younger gamers.
• How about all you can play unlimited gaming plans…included in your bill.

2. WP7 Executive Edition – This flavor will be made for getting things done, with a little fun on the side (like a mullet – all business in the front, and a party in the back).

• This phone must be compatible with all things business – including non-Microsoft services like Zoho, Google Docs, WordPress, SAP, Oracle, Adobe, Quickbooks, Carbonite, etc.  Anything and everything office should be doable on this. Any business desktop or web app should have a WP7 equivalent.
• I’d also make sure it had a docking capability like the awesome Motorola Atrix to replace travel laptops.

3. Zune Multimedia Monster – Did you just snicker?  Sure, the Zune never caught fire, but the multimedia experience is intuitive.  Zune is the basis for most of WP7…and the new Zune theme park in Wasilla, Alaska.

• The killer app here will be getting all the providers under one roof – ABC, NBC, CBS, podcasts, Audible, etc. One roof. A little company called Kinoma can help.  They’ve been performing miracles and resurrections on Windows phones for years.
• With in-app payments and a common interface, this can be the media junkie’s dream – plus a compelling revenue source as Microsoft takes a cut of all the content.
• Give hardware suppliers a cut of the revenues and eliminate licensing fees as an extra incentive.
• ‘Dockability‘ to TVs, PC (and Macs) will be key to this. Also, use as a streaming device from your home media collection would be a huge plus.
• Create an API with revenue sharing so multimedia producers and other sites can plug their content right into your ecosystem and profit from it.

4. Partner (exclusively with Nokia, Sony, LG and Nintendo):

• Nokia is either at an inflection point or it’s Finnished.  It has a huge, international base of dumbphone customers and developers, but its Symbian OS and Meego are going nowhere fast.  Plus, an ex-Microsoft exec just took over the company.  WP7 plus Nokia’s distribution and developer network could change the fortunes of both companies.  I bet if Microsoft doesn’t get to Nokia, HP and WebOS will (or should)….please don’t make me write another blog about that!
• Yes, Nintendo. Nintendo has no phone partnerships and its standalone handhelds have a questionable future when every phone has games.  Microsoft should be able to run every existing Nintendo title. It gets Nintendo in the mobile game, Microsoft a cache of recognizable, must-have titles, and hook for mobile domination…or at least, competitiveness.  …Atari, anyone?
• Sony Ericsson has some decent phones, but no clear OS strategy.  They should partner, and possibly look to put PS2 and PS3 games on Microsoft’s platform. Interesting, right? Coopetition, frenemies…you decide how to spell them.
• Get another Asian manufacturer like LG to go exclusive and you might have something great here.  Maybe each specializes in a different flavor or they compete by market.  OK, this is a blog, not therapy…they can figure it out.

5. Create a WP7 Wrapper for Blackberry and Android: Create an app for Android, Blackberry and iPhone (if Steve Jobs allows, unlikely) that can run all of the content, apps, and games available on native WP7 devices, if the devices are WP7 certified.  Microsoft would make money from sale of content, subscriptions, and games through the store, as well as from any approved accessories that carry its compatibility logo. (For the geeks – maybe unlock overclocking with this app.)

6. Tablets – This one I’ll save for another time…Finally, I do have one confession to make – I still use a Windows Mobile phone!  I know…  Until I find that perfect thin and light Android with a keyboard, Microsoft has its last chance to win me over. That window is closing…’window’…closing…who writes this stuff?

That’s it. Microsoft, you know where to find me if you have questions.

by Steve Faktor. Read more of my magical, life-affirming blog posts at ideafaktory.com