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Mobile computing isn’t new anymore. The capabilities of smartphones, among other things, enable businesses to run applications across an enterprise and workers to collaborate across business and social networks. In this endeavor Microsoft was early to market with its Windows CE devices that provided e-mail and Web browsing to phones. For the first years it was a low-level battle among Microsoft, RIM Blackberry and Palm as well as Nokia devices that were used mostly in Europe. In the last few years Microsoft has fallen behind in hardware and software sophistication, and even last year’s introduction of the Windows Mobile operating system had major issues, lacking multitasking, cut-and-paste, search and other basics that are essential for a phone to be smart. Meanwhile Apple has had massive growth with its iPhone, and Google has deployed the Android operating system for multiple devices and is growing its position in market. When I wrote about this movement with Apple in 2009 Apple had had a successful first year and I personally had ditched my Windows phone after giving up on Microsoft’s inability to develop effective mobile software integrated with hardware.

Microsoft’s first-generation phones were novel but ended up being too slow for anything but e-mail and basic personal productivity. They did not provide a pleasant user experience, and its partner applications were not very well marketed. Even worse technically was the hardware design mistake of limited memory; that ultimately was what caused the device to fail, as I pointed out (See: “Microsoft Windows Mobile and Device Divisiveness“) after I abandoned the technology.

Now release of the Microsoft Windows Phone 7 was announced this week, but does it matter? No matter what statistics Microsoft brings to its announcement to distract us from reality, the company is desperately playing catch-up after drastic losses of market share over the last three years. But I have to say that with this new generation of technology, Microsoft has missed the target again. Here are a few of the features not available in Windows Phone 7: copy, cut and paste, tethering, multitasking for third-party applications and turn-by-turn navigation. Microsoft could have made up ground by supporting Adobe Flash to challenge Apple’s boycott of that technology but decided to put it off until 2011.

This device looks similar to Apple’s iPhone, Android devices and RIM Blackberry Torch, and the general perception is that it’s a me-too device that does the minimum to be competitive in the market. Microsoft has laid out the basics on its website to show you can perform personal productivity tasks, access music and video, browse the Internet and do mapping. But there is no clear competitive edge for Microsoft. And the business aspects of the device are worse than the consumer aspects. I have pointed out before that Microsoft has not worked to promote its mobile technology even to support its own enterprise efforts, for example, in business intelligence or process-centric applications. Microsoft is making an effort to energize its application ecosystem efforts in the Apps Marketplace, which appears to have the basics of social media but lacks depth in offerings compared to Apple or even Android . So far my inquiries show that Microsoft Windows Phone 7 is not a priority of other enterprise software providers, most of whom do not put it on the top-three list with Apple, Android and RIM and are not investing effort in testing compatibility or building native applications or ones that adapt through HTML5. I have recently written about key enterprise software providers supporting Apple iPhone including Actuate, QlikView, MicroStrategy and SAP – all of them have demonstrations on the Apple AppStore and data to explain the power of the technology. Microsoft hasn’t done anything like this on its device or application store yet.

Microsoft is making the device available in different configurations from carriers AT&T and T-Mobile and making an enormous marketing push to get people’s attention, but in the era of iPhone and Android adoption is a viral process of people networking about the technology as much as it is marketing technology to the public. Microsoft might have had an initial lock-in with loyal corporate customers, but now workers are accepting a dual-device world where they have a work device and their own personal device. More and more they are finding ways to access work e-mail, calendars and other items that once were confined to the corporate device. Beyond that, large corporations are building applications strategies on the Apple iPad that can work in parallel with the iPhone, and that could push Microsoft even further out of large and midsize businesses. Microsoft is slow to understand that the world has changed and has a long way to go to convince the market that it’s serious about it.

Microsoft is not getting the best reviews by others either; for example, see Galen Gruman’s article “Microsoft and Nokia: A Tale of Two Elephants” or Edward C. Baig in USA Today. My opinion is that individuals in business should not adopt this technology until it has had some seasoning by others. Microsoft has made lots of changes to its mobile strategy and technology and probably will have to adjust again as it struggles to get onto the evaluation lists of workers and companies. The real problem is that Microsoft has been slow to do incremental updates to its operating systems and applications, and for years pretty much forced us to buy a new device to get new capabilities – unlike Apple which has done a pretty good job in getting updates to its last three generations of devices. Microsoft will have to focus on more than itself to understand the new landscape of buyers that it is missing with Windows Phone 7. So check back in a year to see if it can catch up to the mobility and smartphone adoption happening in business. Until then Microsoft will need a miracle to catch up to Apple and Android who are already onto the next generation of its technology that Microsoft is trying to match.

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Regards,

Mark Smith – CEO & EVP Research