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Microsoft Unveils New Windows Phones

Monday, 11 Oct 2010 10:01 AM

 

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Microsoft Corp. unveiled nine new phones with its Windows operating system after an overhaul aimed at reversing share losses to Apple Inc.’s iPhone and Google Inc.’s Android software.

The Windows phones will be sold in the U.S. by AT&T Inc., the country’s largest phone company, and Deutsche Telekom AG’s T-Mobile USA unit, the companies said at an event in New York to show the handsets.

The Windows Phone software features a new design, the ability to take and post photos faster and connections to Facebook and Microsoft’s Xbox Live game service. With market research firm Gartner Inc. predicting smartphone sales will eclipse those of personal computers in the next two years, Microsoft’s mobile business is in need of a quick turnaround.

“Handsets are a critical market if Microsoft is going to expand their business beyond PCs,” Ross Rubin, an NPD Group Inc. analyst, said in an interview. “Windows Phone 7 will offer an interface that will be familiar to some and offer a new experience to others; it is a matter of taste.”

The phones are being made by HTC Corp., Dell Inc., Samsung Electronics Co. and LG Electronics Inc.

The phone software organizes activities into tiles that update with new information. Users can scroll down and side to side to navigate. The software also includes Microsoft’s Zune music subscription service and mobile versions of the Office applications.

Complete Overhaul

The product is the result of an overhaul of the company’s mobile-phone software. Andy Lees, named president of the mobile business two weeks ago, joined the group in 2008 and opted to scrap work on a planned release and start from scratch.

To gain share, Microsoft must win over more than just customers. The company must also persuade carriers and handset makers to devote significant resources and marketing muscle to Windows in order for the new devices to succeed, said Kevin Burden, an analyst at ABI Research.

It’s a harder task given the popularity of Android, which has become the top selling smartphone operating system in the U.S, according to Gartner. When HTC made the first ever phone with Windows software in 2002, the company was almost unknown in the handset space. Now it’s the maker of some of the most popular Android phones.

“The mobile space is really important and Microsoft certainly needs a good play there,” said Burden, who is based in Hopkinton, Massachusetts. “It’s a huge problem if this doesn’t help them take share.”

Sliding Share

Microsoft’s share in the global smartphone market fell to 5 percent in the second quarter, from 9.3 percent a year earlier, according to Gartner. Android climbed to 17 percent from 1.8 percent, while the iPhone rose to 14 percent from 13 percent. Nokia Oyj’s Symbian software held 41 percent of the global smartphone market in the second quarter, down from 51 percent a year earlier, and BlackBerry-maker Research In Motion Ltd. had 18 percent, down from 19 percent.

Microsoft said it opted not to do a CDMA version of the program until next year, meaning Verizon Wireless and Sprint Nextel Corp., which use that technology, will not be offering phones with the operating system for sale initially.

--Editors: Peter Elstrom, Cecile Daurat

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net;

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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