The reviews are beginning to trickle in for Microsoft's (Nasdaq: MSFT) latest attempt to gain a foothold in the rapidly growing smartphone market, and to the surprise of many the initial feedback seems to be promising.
The cult of Steve Jobs will surely laugh at such a proclamation, but the new Microsoft Window 7 phone to many is a fairly matched competitor to Apple's iPhone and Google's (Nasdaq: GOOG) Android, and in some cases it outclasses these loved devices.
The new phones will be available in the United States market in November for customers with AT&T (NYSE: T) or T-Mobile service, and by next year for Verizon (NYSE: VZ) and Sprint (NYSE: S). Microsoft also announced that the company has received commitments from 60 wireless carriers in 30 countries who will carry the Windows 7 phones. The phone's success will also be important for Qualcomm (Nasdaq: QCOM) shareholders as the company's Snapdragon processor will be inside all nine of the announced phones running the software inside.
Microsoft tries again
It was only May when Microsoft released its latest smartphone dud to the world. The Microsoft Kin was pulled from the market after about two months in the face of absolutely terrible sales, as should be the case for a poorly thought out and designed product.
The company has struggled to find a niche in a hypercompetitive smartphone environment. Their platform never could compete with the lineup of capabilities offered in Apple's (Nasdaq: AAPL) iPhone or Google's Android. At the same time, it also lacked the business and security features that make BlackBerry the most important enterprise device.
According to researcher Gartner, Microsoft's current mobile operating system only accounted for 5% of the worldwide market in the most recently reported quarter. Symbian, mainly used with Nokia products, has the largest market share with 41% of the market, followed by Research In Motion's (Nasdaq: RIMM) BlackBerry with 18%, Google's Android has 17% market share, and the Apple iPhone with 14% of the market through only one service provider in the U.S. market. To say Microsoft is far behind the competition would be a drastic understatement.
Promise in cloud computing
One aspect of the smartphone business where Microsoft might be able to make an inroads is through cloud computing. While Apple's and Google's software certainly have applications that allow for data to be stored on Internet-based servers, there is no clear leader in the space as of yet.
Microsoft seems to have made this a point of focus for the company's new operating system allowing users to store data to said cloud servers and stream music from the Microsoft Zune Pass service. The operating system also allows direct integration with Xbox Live. This is significant because it will allow users to connect and play games with millions of gamers through a connected, established service. If the gaming sector continues to grow, this will be an important differentiation for the Microsoft platform.
In addition, Microsoft still has an opportunity to take advantage of its immensely popular Word, Excel, and PowerPoint software. The new phones are designed for seamless integration with these products, which are not as easily accessible on competitors' platforms. Microsoft should also be looking for ways to incorporate a service similar to Google Docs to further improve the functionality of cloud-based software.
The Foolish bottom line
Microsoft clearly has a long row to hoe in regaining market share in the smartphone space, but it appears the company is finally serious about moving forward in this effort. While Microsoft has lacked in recent years in terms of innovation and exciting growth, the company's superior balance sheet and cash-cow franchises have given it another shot to win share in this important market. The jury is still out for sure, but don't count this 800-pound gorilla out just yet.
Would you give any of Microsoft's new devices a shot? Let us know in the comment box below.
