Microsoft Hooks Up With a Former Flame

What a jam-packed mobile month September has been so far.

Investors have already been treated to important product launches from Microsoft (Nasdaq: MSFT  ) and Nokia (NYSE: NOK  ) and their Lumia 920, Amazon.com's new Kindle Fires, Google's (Nasdaq: GOOG  ) Motorola subsidiary's first-born phones since the acquisition closed, Apple's (Nasdaq: AAPL  ) iPhone 5, and Intel and Googorola unveiled an Atom-powered variant.

Who's next?

HTC, come on down!
Microsoft is openly two-timing its Finnish partner and has hooked up with HTC to unveil a pair of new Windows Phone devices: the 8X and 8S. The 8X is geared towards the upper end while the 8S will target the lower end. Both carry Qualcomm Snapdragon processors, just like every other Windows Phone.

HTC was one of Microsoft's early mobile hardware partners, but that relationship has languished over the past several years while HTC had been focusing on and investing aggressively in Android, only to see Samsung overtake it as the Android champion last year. The unveiling is a sign that the two are giving it another go. The 8X even looks almost identical to the Lumia 920 that Nokia unveiled earlier this month.

Sources: Nokia and HTC. HTC 8X (top) vs. Nokia Lumia 920 (bottom).

Nokia, always the jealous type, is taking the opportunity to call out HTC for just opting to "tactically re-brand" its product lineup, as opposed to Nokia, whose entire Lumia family is built on Windows Phone. Marketing exec Chris Weber even tweeted, "It takes more than matching color to match the innovation of the Lumia 920."

Microsoft continues to aggressively try and push into consumer perception. Windows Phone exec Terry Myerson told The New York Times that Microsoft wants to "increase the awareness of Windows Phone."

Long time no see
On the carrier side, the 8X will be coming to Verizon's (NYSE: VZ  ) network when it launches in November. That's significant because Big Red has not had a new Windows Phone added to its lineup since way back in May 2011 -- an eternity in the mobile world.

The carrier has bet big on Android to bolster its ranks, so the move is a big score for Microsoft, as Verizon remains the largest domestic carrier. Verizon will soon offer flagship devices for all three of the major mobile platforms: Android, iOS, and Windows Phone.

Leap of faith
Microsoft is in the midst of an important but risky transition from Windows Phone 7 to Windows Phone 8. Its stable of hardware OEMs for its new platform now includes Samsung, Nokia, and HTC, in the hopes that the variety of options with encourage consumers to make the leap.

Windows Phone 7 was effectively dead-ended when the company announced that the new platform would not be backwards-compatible, but fortunately that transition looks like it will only span a matter of months. That sure beats the years that Research In Motion is working through to get its BlackBerry 10 platform out the door.

One can't help but wonder if some of the perceived legal troubles associated with Android may be leading hardware vendors to lean more towards Windows Phone in an attempt to diversify their platform bases.

Developers! Developers! Developers!
The next piece of the puzzle that Microsoft needs to line up in order to succeed is the developer community. It already has the hardware and carrier partnerships inked; now it just needs to ensure it has an engaging content ecosystem to convince consumers that Windows Phone 8 is worthwhile.

Microsoft's entertainment and devices division, which includes its Windows Phone offerings, is now consistently generating positive operating income (despite losses the past two quarters). With Steve Ballmer wanting the company to focus more on devices and services in the coming years, Windows Phone is an important goal in that transition.

The good news is that Microsoft's longtime lucrative cash cows remain as profitable as ever right now, which you can read all about in this new premium research report. Sign up today and get a comprehensive report along with free updates for a year.

 

Fool contributor Evan Niu owns shares of Verizon Communications, Qualcomm, and Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google, Amazon.com, and Apple. Motley Fool newsletter services have recommended buying shares of Intel, Google, Microsoft, Amazon.com, and Apple. Motley Fool newsletter services have also recommended creating a synthetic covered call position in Microsoft and a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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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 September 20, 2012, at 1:41 AM, inclitus wrote:

    "Windows Phone 7 was effectively dead-ended when the company announced that the new platform would not be backwards-compatible.."

    A correction here: The new platform IS backwards-compatible.

    Windows Phone 7.5 handsets will not be able to run Windows Phone 8 apps, but Windows Phone 8 devices will run Windows Phone 7.5 apps.

  • Report this Comment On September 20, 2012, at 3:26 AM, jhf678 wrote:

    It seems like phone companies love Windows phone now. Probably the demand is increasing. Therefore, Microsoft needs more manufacture. It is about be go head yo head with Android and iOS.

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