Keep Your Eyes on Microsoft
Older tech companies may be struggling to keep apace in the mobile era, but Microsoft may have the best strategy to catapult itself back to the top in this year.
The Redmond, Wash.-based behemoth has struggled against rivals like Apple and Google for dominance in the smartphone era, but the company planted lots of seeds in this year that may yield fruit in the coming year.
The company’s high-stakes smartphone partnership with Nokia, its near-supremacy in the patent arena, continuing commitment to new technologies like Kinect, and its potentially game-changing Windows 8 OS push prove a winning strategy for a rebirth, keeping the tech giant relevant as consumers shift to tablets and smartphones for their computing needs.
The Nokia Deal
Less than a year ago, Nokia agreed to make Windows Phone its primary smartphone operating system, and the two companies hitched their fortunes together.
In preparation for the new devices, Microsoft began shoring up a new version of its Windows Phone OS to make it more robust and user-friendly. By simplifying and enhancing its phone software, Windows may have aimed to match the friendly user experience provided by Apple’s iPhone, and define itself as more intuitive than Android.
The strategy may be paying off. This fall, Nokia debuted the Lumia 800 in the U.K. to high demand and reported difficulty meeting consumer demand for the new Windows device.
The positive reaction supported a recent study from the NPD Group found that nearly half of smartphone users are considering a switch to Windows, which may mean higher than expected sales for the U.S. and Canadian launches as well.
Microsoft is employing a range of initiatives to spark interest in consumers. For example, Android and iPhone users can try Windows Phone 7.5 Mango with an HTML 5 demo that runs in the competing devices’ mobile browsers. And just this week, the company, Nokia and wireless carrier AT&T announced they are ponying up $100 million to fund an advertizing blitz for the latest Nokia Windows smartphone, the Nokia Ace.
The recent Skype acquisition, beta tests of its new social network So.cl, and a possible Nokia Windows tablet next summer also aim to bring Microsoft into the modern era of technology.
The Redmond, Wash.-based tech company trails far behind both Android and Apple with just a two percent share of the smartphone market, but these recent moves by Microsoft point to its plans to compete more strongly in the year to come.
Patent Wars
Microsoft has found something in common with rival Apple: both companies see a common adversary in Google’s Android OS, and their alternating legal attacks have delivered a one-two punch to the search giant.
While Apple targeted hardware makers Samsung, HTC and Motorola for lawsuits, Microsoft is taking the settlement and licensing route, finding ways for phone makers to pony up fees and revenue cuts for using contested patents in their devices. The Redmond company’s recent deal with Samsung is one such deal, and the company has suggested LG, Sony Ericsson and even Amazon’s new Android-based Kindle Fire tablet may be next.
The path is lucrative for Microsoft, which receives $5 from HTC for every Android handset sold and has similar deals with ViewSonic, Acer and a slew of smaller companies, a practice that generates more money for Microsoft than its own Windows Phone sales.
In addition to revenue, the strategy of keeping Google and its Android partners off-balance, may give the narrow foothold Microsoft is looking for to jump in with its phones, tablets and other devices.
Kinect
Microsoft’s Kinect is the motion-sensing device that works with the popular Xbox gaming system. When Kinect debuted, it became the fastest-selling gadget of all time, beating out the iPad. Microsoft’s commitment to Kinect, as well as other gesture and voice recognition technology, could pay huge dividends this coming year.
Microsoft is reportedly incorporating gesture recognition capability in its next Windows OS release, showing that controlling multiple devices with a flick of the wrist may not be so far off and helping the company move into a future where devices are increasingly connected to each other and to the cloud.
Bolstering Kinect and other gesture-based technology is only the tip of the iceberg for Microsoft, however. The company’s recently released a “Productivity Future Video” demonstration with numerous theoretical devices including transparent smartphones and tablets, as well as non-electronic items such as walls and tables, all of which recognize touch, voice and gestures. With considerable R&D budgets, Microsoft may be able to make these innovations happen in the far future, perhaps keeping it ahead of the game.
