The Windows Mobile 6.5 Problem: Lack of Customer Control

Windows Mobile's awkward relationship with hardware makers will benefit iPhones and BlackBerrys, writes one analyst.

Windows Mobile 6.5 became available yesterday to less-than-stellar reviews, and also on the heels of a well-publicized study concluding that Windows Mobile is a non-player in the smartphone game.

Welcome to the beast that is the smartphone market in 2009.

It's a crowded, ever-changing world, and Windows Mobile faces a complex challenge: how to win over and keep customers when there are so many established choices.

Poor reviews are not going to help matters, but a bigger problem for Microsoft, according to a column by veteran industry analyst Rob Enderle, is the way Windows Mobile is bundled with hardware makers.

Smartphones evolved differently than PCs, where being hardware independent worked wonders for Microsoft's Windows OS and made the company its fortune.

To Microsoft, the current smartphone market must seem like an alternate reality, writes Enderle.

"In the world they [Microsoft] think they knew, being hardware independent is the model and Microsoft is king. In the world they suddenly find themselves in, Apple, who isn't even the largest smartphone maker, is king and Windows seems to get little in the way of respect."

The advantage that the iPhone, BlackBerry and Palm Pre enjoy is that they are hardware/software bundled brands that have been extremely well marketed to the public (you can see TV commercials galore any night of the week). Consumers buy the phone, not the operating system, and they are proud of it. How often do you hear people say "My iPhone" or "My BlackBerry" instead of "my phone"?

Writes Enderle: "Chances are if you buy an iPhone you zeroed in on it and didn't really look at any alternatives — the same if you bought a RIM Blackberry, and possibly a Palm. Once you are on the phone, you then gravitate back to the vendor for replacements because you've learned all the phone's unique qualities and uses."  

There is no such loyalty with generic smartphones running Windows Mobile, he says.

"People may buy a Motorola one year and a Samsung the next because of price, plan and appearance."

You see where this is going: Microsoft needs to brand its own phone.

In a sense, the company is doing that by calling new generic phones running Windows Mobile 6.5 "Windows" phones. But is that enough? If anything, RIM, Apple and Palm have proven that buyers want smartphones from one maker with one name.

Microsoft is not blind to this. Speculation abounds about the company's Project Pink, a plan to develop Microsoft-branded phones that will reportedly include Zune services and be built on top of Windows Mobile 7. But it could be a year until we see these "Windows" phones because WinMo 7 is not expected to release until the last quarter of 2010. That's a lifetime from now.

Enderle adds that Windows Mobile's battle for brand awareness is compounded by their hardware partners being in the same boat. He writes the Google faces the same issue with its Android mobile OS.

"Microsoft and Google have to create a product that is consistent enough so that buyers ask for it by name and stay loyal to it. What makes this problematic is the hardware vendors want buyers unique to them and only ask for Motorola, HTC or Samsung phones."

This civil war for customer control between Microsoft and Google and their hardware counterparts will only benefit Apple and RIM, which do not have this conflict, writes Enderle.

"They know who owns their customers. They do."

Shane O'Neill is a senior writer at CIO.com. Follow him on Twitter at twitter.com/smoneill. Follow everything from CIO.com on Twitter at twitter.com/CIOonline.

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