Microsoft (Nasdaq: MSFT) has released sales numbers for Windows Phone 7 devices, but it remains very cautious about expressing confidence for its prospects in the market other than stating that it is in this market "for the long run." While the company criticized Google's (Nasdaq: GOOG) Android for its frequent updates several weeks ago, the company seems to be adopting this strategy, releasing updates at a fast pace to improve its product.
Corporate vice president Achim Berg, a former board member of Deutsche Telekom in Germany, said that 1.5 million Windows Phone 7 devices were sold by retailers in the first six weeks after launch and noted that Microsoft was "pleased" with the result. That result was about in line with other new platform launches he said. He indicated that it was Microsoft's first goal to get a foot into the market with "a great product." Now it is about building reputation.
Analysts estimated that only 40,000 phones were sold on launch day; others already predicted the failure of Windows Phone 7. A British retailer said that Windows Phone 7 phones aren't exactly selling like hotcakes.
"We believe that to succeed in mobile, you need, first of all, a great product, and we think we have that. What we're hearing from our customers is that they're thinking the same way. Additionally, early customer survey data on the overall software experience is very positive, and the willingness to recommend our phone is very high. That's really good for us."
Berg also revealed that there are now more than 4000 apps in Microsoft's Marketplace. "With more pouring in daily, this is an enviable pace for any new platform," he stated. 18,000 developers are now part of the Marketplace.
In an interview with Microsoft's own marketing team, Berg remained notably cautious about the immediate future of Windows 7 and avoided a comparison with rivals. "It's a bit of apples and oranges comparison; our numbers are similar to the performance of other first generation mobile platforms. We introduced a new platform with Windows Phone 7, and when you do that, it takes time to educate partners and consumers on what you're delivering, and drive awareness and interest in your new offering. We're comfortable with where we are, and we are here for the long run. Windows Phone 7 is just the beginning."
That message may be interpreted as a mixed bag and includes a good portion of uncertainty. As a first-generation product, Microsoft needs customers to understand and buy the platform. However, as a first-generation product that is just the beginning, should you buy it now? Berg said that Microsoft is "on a path to begin releasing the first of several updates in the next couple of months." There was no information on how these updates will be delivered and which devices will support them. However, Berg also mentioned that, "several more mobile operators around the world will introduce Windows Phone 7 on their network in 2011, and we will have a broader portfolio of devices from phone manufacturers at different price points delivering on our commitment of providing customers choice," which shows that Microsoft is serious about this market.
Besides news that 1.5 million devices have been sold in the first six weeks after launch, which is a clear success over the previous Windows Mobile platform, there is little in this interview that allows press, analysts, developers and users to get a feel for how well the launch of the platform is proceeding. Subjectively, we were a bit surprised by the cautious expressions of Berg in this interview, and it is almost impossible to interpret them.
Back in 2000, an analyst downgraded Oracle with the statement that the company's outlook for the future was "not enthusiastic enough" and the company's stock took a nosedive the following day -- while Oracle was just cautious, but confident about its future quarters. We should be careful interpreting cautious statements, but it is also clear that Microsoft will not succeed by being cautious in this market. Berg said that customers will spread the word about Windows 7, but Microsoft will need to support the message with more passion than the dry and stiff statements that were made in this interview.
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