Do you really care if this software is or isn't on your phone?
Up in the San Juans, tech analyst Mark Anderson publishes an influential


"Game Over" for Microsoft?

Do you really care if this software is or isn't on your phone?
Up in the San Juans, tech analyst Mark Anderson publishes an influential newsletter called Strategic News Service, little read by laypeople but studied intently by industry players in Redmond and Silicon Valley. In a recent pronouncement, he has some pretty harsh things to say about Microsoft. Sure, Windows 7 is doing fine and has earned good reviews, but, he writes, "Except for gaming, it is game over for Microsoft in the consumer market."

Why is that? The answer is in your pocket.

"It's time to declare Microsoft a loser in phones," says Anderson. He means smartphones, of course, many of which run on the Windows Mobile software platform. But not enough. According to Gartner Research, WinMo has about 8 % of the world market--way behind Symbian (the Nokia platform) at 44 %. (Research in Motion, aka BlackBerry, has 20 % and Apple has 17%.)

Microsoft still has a commanding lead in desktop software (Windows, Office, etc.), but Anderson sees future growth outside the office, as he explained in a talk last night in New York.

We weren't there to hear Anderson's remarks (well, we couldn't afford the ticket or the air fare), but The New York Times' Steve Lohr buttonholed Anderson before the speech, and he reports some choice words.

"Phones are consumer items," Anderson tells the Times, "and Microsoft doesn't have consumer DNA."

And this: "Walk the halls at Microsoft and you can see it is not a place that gets consumers. Just as if you walk the halls at Google, it's obvious it is not a place that gets the enterprise world."

Slight translation: Stick to the large, relatively stable, yet mature business market you already dominate, Steve Ballmer. Don't try compete with Apple and Android in the phone market, because you'll never be sexy enough for that.

Yet maybe it's a little premature for Anderson to be carving MSFT's tombstone just now. Suppose the company remains a niche player in smartphones. Eight percent ain't a lot of market share, but that market will grow a lot. So its niche will be profitable, just not as profitable as its Windows hegemony. Microsoft also has Xbox, a consumer product that still sells nicely.

As for possessing consumer DNA or not, Microsoft is only selling the software in your nice new HTC Touch Pro2 or comparable WinMo-equipped smartphone. The marketing and the packaging are more the responsibility of the phone manufacturers. What's inside matters less, I would argue, than the monthly price plan offered by the carrier. There, too, it's the responsibility of Verizon or AT&T to sell us consumers, not the job of engineers in Redmond.

People have been predicting the demise of Microsoft since before some of its customers were born. It's a way to get attention, to sell newspapers, to get people to subscribe to your newsletters.

Netbooks and cloud computing are real threats, of course, if consumers opt out of the Windows desktop dynasty. But to suggest smartphones will replace computers is like saying microwave ovens will replace the trusty old gas range. Your can impress friends in a bar with your shiny new iPhone, but back home there are still papers to write, bills to pay, turkeys to cook. It may not be glamorous, but it'll always be a part of the consumer market.

comments powered by Disqus