Will Microsoft's Cortana Increase the Appeal of Windows Phone?

After months of rumors, leaks, and speculation, Microsoft (MSFT 1.82%) officially unveiled the new "Cortana" virtual assistant for the upcoming Windows Phone 8.1 update. Powered by Bing and named after Master Chief's AI companion in the "Halo" series, the new Windows Phone feature will fill a similar role to Apple's (AAPL -0.35%) Siri and Google's (GOOGL 10.22%) Google Now services. While some might say that Microsoft is simply playing catch-up and emulating the offerings of the smartphone market leaders, is it possible that Cortana will increase the overall appeal of Windows Phone as a platform?

Meet Cortana
Cortana is part of Microsoft's upcoming Windows Phone 8.1 update and serves as a replacement for the mobile operating system's Bing search function. Voiced by Jen Taylor, the same voice actress who provided the voice for Cortana in the "Halo" games, the virtual assistant will allow Windows Phone users to search the Internet, make phone calls with voice commands, adjust calendar entries, set alarms and reminders, and more. While this may sound similar to Siri and Google Now, Microsoft insists that Cortana offers a more personal experience.

Similar to Motorola's Moto X and Microsoft's own Xbox One gaming console, Cotrana will feature "always on" functionality that allows users to wake the phone with voice commands. It will also have a "learning" feature that allows it to recognize the user's preferences from frequent searches and actions, allowing Cotrana to customize itself over time to better meet the user's needs.

Cortana vs. the competition
Given the similarities to existing offerings, Cortana has already received a number of comparisons to Siri and Google Now in the tech press. So how does Cortana measure up?

In regard to features, Cortana manages to hold its own. Not counting the personalization and learning features, it comes across somewhat as a mix between Siri and Google Now; it has personality that Google Now lacks, while having a dedicated search engine to power it unlike Siri. It also has an added bit of geek charm to appeal to fans of the "Halo" series.

What it lacks, of course, is a platform with major market share. Cortana is a worthwhile offering that can stand up to both Siri and Google Now, but both of those virtual assistants are going to see a lot more use simply by being on more devices.

Increasing the appeal of Windows Phone
The Windows Phone 8.1 update is hoping to change this by introducing features that Microsoft hopes will increase the appeal of the platform, with Cortana being just one. Other features include the addition of a notification area knows as the "Action Center," the ability to add a background photo or image that shows through certain tiles, the "Word Flow" swipe keyboard, independent volume control for apps, and a feature known as "Wi-Fi Sense" that allows you to automatically connect to hotspots and shared networks without having to manually enter information or accept terms of use agreements.

While it's true that at least some of these features are fairly common to users of Android or iOS, that's kind of the point.... Microsoft is trying to appeal to more users by giving them Windows Phone versions of the features that they're used to on other platforms. The idea is that it will make it easier for users to transition to Windows Phone if the overall experience is similar to what those users had before even if the interface is different.

Will people make the switch?
Despite the improvements to the platform that are being made with Windows 8.1, don't hold your breath expecting a mass exodus from Android or iOS to Microsoft's platform. Windows Phone is slowly but surely becoming a more mature OS in terms of features and functionality, but even Cortana is only going to be a limited draw for users. Instead, Microsoft will likely see most of its growth come from something much more basic: price.

Microsoft is removing the licensing fee that hardware partners pay to develop Windows Phone devices, making it essentially free to use (not counting other fees or costs associated with patents, app bundling, and other business considerations.) This is a play to reduce the overall cost of Windows Phone devices, making them more affordable and taking advantage of the increasing popularity of the devices in emerging economies.

The future of Windows Phone
While Windows Phone only holds around 3.4% market share in the U.S., it has been much more successful in Europe and countries with a growing middle class. The platform holds 8.3% of the market in France, 7.5% in Germany, 10.1% in Great Britain, 12.2% in Argentina, 16.1% in Italy, and has been slowly building share in various other countries around the world. Some of these numbers are impressive for the platform, though they still don't add up to Windows Phone being a major power in world market share just yet.

With potentially lower prices, mobile partners such as Samsung and HTC developing new devices, and new features like Cortana being added to increase the overall appeal of the platform, Microsoft is attempting to build a platform that will appeal to those for whom price matters most. Whether it will be enough to cause a significant increase in market penetration remains to be seen, however. 

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