Is Microsoft Calling it Quits on Windows Mobile?

The competition in the smartphone market is extremely intense, and continues to heat up. I remember a time not too long ago where the only options for business users were Windows Mobile devices or Palm Treos. Sure, there was always the BlackBerry, but back then it was great for email but not much else. In this market it was easy for Microsoft to dominate, despite having a less than stellar offering. Even Palm made Windows Mobile the de facto operating system on its Treo 700 series devices.

However, recently the landscape of the smartphone industry has changed dramatically. Research In Motion has demonstrated that the BlackBerry can do much more than just email with models like the Curve, Bold and the new Storm. Apple launched the revolutionary iPhone, Google introduced the G1 featuring the much hyped Android platform, and now Palm has resurfaced with the all new Pre, featuring Palm’s new Linux-based WebOS operating system.

This week Todd Peters, Microsoft’s marketing VP for Windows Mobile, told the New York Times at last week’s CES convention that moving forward customers should expect to see fewer device models running Windows Mobile than the 140 or so that do today.

Wait, did I read this correctly? Is Microsoft admitting defeat and retreating to the safety of its core desktop and server business?

Actually, no. Microsoft is deviating from it’s usual blanket coverage strategy, and adopting a “less is more” approach.

“I’d rather have fewer devices and be more focused,” Peters told the times. That way “we get better integration” between phone and operating system.

It is refreshing to see Microsoft take an honest assessment of its offerings and standing in the competitive marketplace. While I think Microsoft has made lots of progress with Windows Mobile 6, there is still lots of room for improvement. More than servers and desktops, smartphone devices really require tight integration between hardware and software for optimal performance. For that reason I believe Microsoft’s “less is more” approach makes sense. If Microsoft can collaborate with a small number of hardware manufacturers to create a limited portfolio of optimized devices that represent a true marriage of hardware and software, I believe they can continue to own a large portion of the business smartphone market.

One advantage Microsoft can and should definitely leverage is its ability to integrate its Windows Mobile platform with its messaging and collaboration ecosystem of Outlook, Exchange, SharePoint, OCS and Dynamics. While users continuously broaden how they use smartphones, their core usage still revolves around email and PIM synchronization, as well as remote access to important business application data. If Microsoft can continue innovating in extending enterprise information to the smartphone, it will always remain a dominant force in the business smartphone market.

As one of the largest providers of Exchange Hosting, Intermedia has thousands of customers who rely heavily on their Windows Mobile-based smartphones. This user base continues to grow rapidly despite the increased smartphone competition. I have no doubt that these users will appreciate a more focused platform, even if that means they will have fewer smartphone options to choose from.

Microsoft CEO Steve Ballmer is scheduled to announce more details on Microsoft’s Windows Mobile strategy moving forward at the Mobile World Congress in Barcelona next month.

About Robert Leibholz

Robert “Bob” Leibholz oversees Intermedia’s sales and business development activities as well as key partnerships. He is responsible for creating and expanding the company’s channel network to over 4,000 private label partners, as well as the extension of the program to Latin America and inking deals with Fortune 100-ranked Ingram Micro and Dell. He has lead Intermedia’s sales growth to become the industry leader in the business communication space.