Today there’s a barrage of news streaming from the Mobile World Congress show in Barcelona (I miss the tapas), and I see two news items dominating: The new HTC phone, based on Google Android; and Microsoft’s release of its new Windows Mobile 7 operating system. It leaves me wondering: can Microsoft be relevant in the mobile market again?
To be fair, Windows 7 mobile is getting good reviews. Why, even “bloggers” like it, so it must be hip. Steve Ballmer can be seen in the clip talking about the Windows Phone 7.
But even if this is a successful release, I’m trying to imagine an endgame in which Microsoft wins in mobile, and I can’t.
First big problem with Windows 7: Windows 7 i s a descendant of the Zune operating system, which couldn’t be a good thing. The last time I saw a Zune, it was in the hands of a teenager on the train to Hoboken, N.J., who was being mercilessly needled by his friends: “You have a Zune… bahahahahah!” (actually, I totally made that up. But it seems real, doesn’t it?)
Here’s the bottom line: Microsoft has been losing market share in mobile (see the latest Comscore data below). It’s way behind Research in Motion (RIM), which happens to be a company focused on mobile. In releasing a new operating system, Microsoft is going up against the fastest growing development communities out there: The iPhone and Android. It’s clearly not going to generate as much buzz as those two. Developers and users just aren’t as interested in a Microsoft mobile product.
Why is Microsoft being so stubborn in the mobile market? I guess it’s because Windows Mobile 7 is an “operating system,” and Microsoft feels as if it’s an operating system company. But the fact is that it’s in third place, chasing people Symbian and RIM, while at the same time Apple, and Google are gaining momentum, has got to be troublesome.
What’s it mean for Microsoft stock? Not sure whether it’s related to Windows 7 mobile or a general market rally, but Microfsoft shares were up 1.55%, to $28.23, in early trading Tuesday.The Rayno Report has made the bullish case for the stock before. We’re not sure Windows 7 mobile matters to the stock much anyway, given that it’s a small part of Microsoft’s business.
(Disclosure: Long MSFT).