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Microsoft (Nasdaq: MSFT  ) impressed me yesterday.

No, it's not the official unveiling of its terribly late Windows Phone 7. It's going to be hard for Mr. Softy to make a difference in a game where Apple (Nasdaq: AAPL  ) , Google's (Nasdaq: GOOG  ) Android, Research In Motion (Nasdaq: RIMM  ) , and even Nokia (NYSE: NOK  ) have already been playing for years.

Where Microsoft truly shined yesterday was with its ad to promote the otherwise doomed smartphone operating system.

If you haven't seen it, check it out.

Nice. Right?

Microsoft manages to artfully smear the absorbed nature of existing smartphone owners -- promising "a phone to save us from our phones."

The world's largest software company once eschewed jabs at the competition. Remember the original Zune ads? They were artsy, loaded with indie music and graceful imagery, but they were too nice. They never attacked market leader Apple, or took jabs at silver medalist SanDisk (Nasdaq: SNDK  ) .

The days of paying The Rolling Stones a boatload of money to license "Start Me Up" for the Windows 95 launch or paying even more money to Jerry Seinfeld are over. Instead of singing its own praises, Microsoft learned the hard way that the best way to get ahead is to pull everybody else back.

It's a lesson that was painfully digested when Apple's "I'm a PC" ads skewered the Windows-using public. Microsoft came back swinging with last year's Bing launch, taking shots at the "search overload" caused by Google and Yahoo! (Nasdaq: YHOO  ) , establishing itself as more a "decision" engine than a "search" engine.

The new ads work, because smartphone owners know what it's like to be sucked into their devices. Maybe they're not missing their babies' first steps or bumping into strangers, but it's been a negative stigma since the term "CrackBerry" surfaced.

In the end, Microsoft will falter because it's too late -- and it's also unlikely to have a truly superior platform to deliver on the ad's promise of getting folks in and out in a snap. The consumed smartphone owners in the ad don't appear to be frustratingly navigating their phones. They're likely reading emails, enjoying web clips, or texting -- and these focus-altering activities aren't going to go away based on some new operating system. It's still a slick and memorable ad, but unfortunately it can't market its way out of its lousy starting position in this niche.

What do you think of Microsoft's ad or its chances to make Windows Phone 7 work? Share your tips in the comment box below.

Google, Microsoft, and Nokia are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarriz is a somewhat satisfied iPhone owner, but feels his next device will be an Android, and definitely not a Windows Phone 7 device. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (16) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 12, 2010, at 1:33 PM, IdahoAve wrote:

    I am very bullish on Mr. Softy at the moment and I am not entirely sure why. People act like MSFT can't get into the cloud business, or the mobile phone business, or search, music, advertizing, ect... And my response is just to ask why? Why do we have the consensus the the Soft will be unable to do so? I like Bing, I love the office suite, if they move the office sweet to the cloud it will end the google apps project immidiatly. Micorsoft outlook is the american standard for business communication. The lending public see them as as trust worthy as the American Government. Dividend, buy backs, iconoic company trading at less than premium levels so.... whats the problem here?

  • Report this Comment On October 12, 2010, at 1:37 PM, bsimpsen wrote:

    I also did NOT get the impression that the people in the ad were unhappy with being "sucked in" to their phones. We might all see the folly of it, but we're not going to give it up.

    Meanwhile, Apple's Facetime ads have made falling into your phone seem wondrous.

    Could Microsoft be late on advertising angle as well?

  • Report this Comment On October 12, 2010, at 1:50 PM, dileepkrp wrote:

    People who think anyone entering the smartphone market now is late to the party is too short sighted - including the author. THey think the market is saturated! When there are billions of smartphones to be sold. I think Windows Phone 7 have a bing trick up their sleeves. Looks ,much more refreshing that iPhone or the droid. Also, author's comment about Ads is also too shallow. Xbox did not become a hit by taking a jab at PS or Wii. Overall a very low quality analysis.

  • Report this Comment On October 12, 2010, at 2:11 PM, melegross wrote:

    While WP7 looks good, it also doesn't look to have anything so unique so as to draw significant people away from the other major systems. The main metaphor seems to be folders that they call hubs. While they seem to have taken the folder idea a bit further than others, it isn't that different. I don't see much difference between my naming a folder "music", and putting everything music related into it.

    I understand that it's difficult to come up with something that's not only different, but actually better. Palm tried with WebOS, but that has failed so far because it wasn't "discoverable", you actually had to know how to use it before you picked the phone up, and that doesn't work these days, Apple has seen to that.

    MS has problems with anything that's consumer oriented. The only reason why the XBox is considered to be a success is because MS has been willing to lost almost $8 billion on it so far. Who else could, or would, do that?

    Bing, which was considered to be a star for MS, has now lingered at 10% marketshare for a year, with no sign of doing better. Their new Bing powered ally, Yahoo, has seen their marketshare continue to wilt. MS is lucky, and that's really all it is, that they didn't buy them outright.

    While I expect the WP7 won't implode the way the Kin did, I don't expect it to challenge the leaders either.

  • Report this Comment On October 12, 2010, at 2:22 PM, gslusher wrote:

    The ad is nicely done, but it's inherently stupid. Once consumers get over the , "Ah, yes!" feeling, they may stop to think, "Wait a minute! Just HOW will another smartphone 'save us from our phones'? Especially a phone that is intimately tied to social networking sites and shows a lot of distracting stuff on the home screen?"

  • Report this Comment On October 12, 2010, at 2:24 PM, shivy1 wrote:

    Rick, you were the worst analyst by far out of any motley fool analyst. You have no idea the OS is doomed, You are on my ignore list, Goodbye.

  • Report this Comment On October 12, 2010, at 2:32 PM, JohnatDuke wrote:

    I like the ad and you are correct that they a slick. But the one thing that pops into my mind when I see the ending (get in, get out):

    "Oh, you really have nothing to offer me that will WANT me to buy your phone."

    Nothing engaging, nothing engrossing, nothing fun. Just a phone.

    And why would I want to buy a smartphone that offers me nothing? Why would I pay $200 plus $79 per month for 2 years on a phone that is not engaging.

    But the ad is pretty funny.

  • Report this Comment On October 12, 2010, at 2:44 PM, alexinlax wrote:

    It seems to be trendy to bash MSFT for the past decade, since they struck out with Vista and Zune. Microsoft is an enterprise company, and is having some setbacks in becoming a consumer company as Apple has been, but the reader above is correct. It is certainly not too late to arrive at the party. The number one phone OS is Symbian at about 50% share, not Apple and not Android. Symbian. Nokia and Symbian are Microsoft's target, and that makes me bullish on MSFT.

  • Report this Comment On October 12, 2010, at 2:45 PM, gslusher wrote:


    One question: why did you bother to read this article, given your low opinion of the author?

  • Report this Comment On October 12, 2010, at 2:48 PM, shivy1 wrote:


    I meant after reading this article I got a low opinion. I was exaggerating too. However, an ignorant analyst is not a good one at all, and Rick clearly feels negatively about the company. Don't let emotions run your stock picks, it will not go well for you.

  • Report this Comment On October 12, 2010, at 3:43 PM, AngelTread wrote:

    The ad won't sell any phones, as it takes the view of a non-smartphone owner.

    Then again, the spoof version of the ad may help sales a bit:

  • Report this Comment On October 12, 2010, at 4:52 PM, kariku wrote:

    Aside from the hubs on the main screen, it's just a re-colored Windows mobile interface (look at the apps). With added multi-touch support, probably.

    The ad is funny, liked it, but I don't get the message.

    Just my 2 cents.

  • Report this Comment On October 12, 2010, at 8:47 PM, neamakri wrote:

    Microsoft does not have a stranglehold monopoly on smartphones like they do on the PC. As such, they are just a "me too:" player, way late to the game.

    There is one proven strategy, however, that they have used in the past, that would work.

    Just start giving stuff away for free. Hey, they killed Netscape, didn't they? And sic your lawyers on the competition to further drain their resources.

    After two years just Apple and Microsoft will be left.

  • Report this Comment On October 12, 2010, at 10:14 PM, ScreamingBagel wrote:

    Rick, you're painting a picture with some pretty broad strokes and don't seem like you've taken the time to understand the mobile space.

    You write this article as if Microsoft is new to the game. In fact they've been selling smartphones since 2002, when RIM joined in. Microsoft already has about 5% share (used to be closer to 10%, but recent releases haven't been good), and at least one analyst is saying this will grow to about 15% in a couple of years - the same as where RIM and Nokia will be. Will MSFT be on par with iOS and Android in two years - I doubt it - but I'd take 3rd place in a market as big as this one is.

    You say you defintely won't get a WP7 device but have nothing to say about why. Most of the influential blogs are responding quite positively to the new OS - much more positively than Nokia's recent efforts....

  • Report this Comment On October 13, 2010, at 12:16 PM, chilero wrote:

    I watched the NY presentation and they sold me. I am looking for a new phone, my first smartphone. While I need to wait until November to read some reviews and what not I am heavily favoring WP7 over an Android phone. I'm not even considering an iPhone. Something about Apple rubs me the wrong way, the whole cult like attitude.

    I don't know how many people are thinking like I am but I hope there are enough put MS up there close to Android and Apple.

  • Report this Comment On October 17, 2010, at 7:51 AM, CyborgTrader wrote:

    I have a Moto Android and it does what I need it to do, make and receive calls. My kids laughed at me for I still had Moto Razr, because I don't get the whole idea that "I have to be connected thing". When not trading, I rather spend my time building computers and tinkering with stuff.

    If MSFT is going to put a dent in the smartphone market they need 2 things: 1) A young team to make the W7P cool. 2) A mature team to tie the W7P to the enterprise and MSFT's Office suite. Business is war, MSFT should take the gloves off with their ads and stick it to the competition. 90% of us use Windows, remember!

    Before we all beat up on Mr. Softy, remember the justice department is looking over their shoulder, so I've heard. Apple wouldn't be here in it's current form if MSFT didn't bail them out in the 90's.

    Only a fool will disregard the biggest dog in the room, I know, I have a Rottweiler & a Pit Bull. So don't sleep on old Mr. Softy yet, he has plenty of cash ever 3 months to get it right.

    Someone mentioned how MSFT killed Netscape. Imagine a decent W7P for $75-100.

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