Few companies have messed up as many product launches as Microsoft (Nasdaq: MSFT). Windows Phone 7 was just one example, but we're now seeing promising signs that Microsoft is working on the problem. The marketing is improving, and Microsoft takes good care of its app developers. It may, in fact, become the dark horse in an arena that's focused on Android and iOS.
When Microsoft said it would throw about a billion dollars into WP7 and I saw the first "Really?" commercial, I was truly convinced that Microsoft wanted to shoot itself in its foot. Why would it market its WP7 phones as devices you don't want to spend time with, if we're all deeply in love with our smartphones? In a deeper sense, those commercials were an insult to developers, since they depend on consumers that actually use their phones and don't pack them away as quickly as they can.
Sure, you could see that Microsoft was aiming to describe a different kind of phone. But what isn't broken doesn't need to be fixed. Microsoft marketed toward a consumer demand that simply didn't exist.
A while ago, Microsoft changed its advertising campaign and dropped the silly and artificially funny "Really?" theme. The latest commercials are much simpler in their structure (you could go really overboard and subdivide that first WP7 commercial into four segments and more than a dozen topics) and, well, much more mainstream. The downside may be that the intellectuals among us will turn it down as boring, but the mass market is likely to react much more positively to it: Instead of telling us what the WP7 phone will not do, these commercials actually tell us what phones do. Now the commercials focus on the phones and not the people, there's an emphasized Xbox Live theme, Microsoft stresses the entertainment value, and there's a dynamic that makes the phones appear much more exciting. You could complain about the music choices, but I'm sure Microsoft will fix that as well.
More importantly, the app marketplace has now grown to 11,500 applications. That's well below the 368,893 apps of the App Store (at the time of this writing) and the 200,000 to 300,000 apps in the Android Market. However, Microsoft claims that its developers are seeing greater revenues in the Windows Marketplace than anywhere else, which may have to do with the fact that it's easier to get exposure among 11,500 apps than among almost 400,000. Of those apps, 7,500 are paid apps and 44% of those include a trial version. While the Microsoft app market may grow slower than Android, it may actually do better in the long term, if Microsoft pays attention to developer needs. Once Nokia comes online with its first WP7 phones, the dedication to the Microsoft platform may pay off for Microsoft developers. It's still a big bet, but any application today is a bet, and there aren't many developers willing to risk their future on an app that's just published for iOS.
If Microsoft keeps to this path, it has every opportunity to build a successful platform. I still would argue over whether it can outrun Apple within four years, but I do wonder how much market is left for Hewlett-Packard and WebOS.
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