If you can't beat 'em, go fight someone else.
That's what Microsoft (Nasdaq: MSFT) is doing with its upcoming Windows Phone 7 operating system. Catching up to the Apple (Nasdaq: AAPL) iPhone and Google (Nasdaq: GOOG) Android platforms in one fell swoop is hard enough for mobile specialist Research In Motion (Nasdaq: RIMM), and Palm basically died fighting the good fight -- and that was back when iPhone and Android were still sort of immature. So it makes sense for Mr. Softy to try a different tack with its upcoming mobile flavor of Windows.
The secret sauce? Gaming. Your Windows Phone 7 phone will connect to Microsoft's popular Xbox Live network for a social, connected, and presumably amazing gaming experience.
Games will be downloaded over the air -- though a Wi-Fi connection will probably make for a more pleasant process, especially if you get your Windows phone from AT&T (NYSE: T) -- and then be fully playable on your shiny new gadget. The games are coming in from many popular publishers including Microsoft's own gaming division, THQ Interactive (Nasdaq: THQI), and Glu Mobile. Titles range from Bejeweled to Guitar Hero 5, with a taste of everything from casual simplicity to immersive 3-D worlds.
So it looks like Microsoft is ready to milk its Xbox brand for whatever street cred it's worth in order to get a leg up on the mobile market. In effect, your phone becomes a miniature Xbox, controlled by gentle multi-touch taps on your screen.
If that's a major selling point around which Microsoft plans its marketing strategy, Windows Phone 7 could end up in a market niche all by itself, somewhere between handheld video games and high-end smartphones. Some would call it a risk and others an opportunity; me, I don't really believe that Big Bad Redmond would be happy in such a specialized role.
The Windows Phone 7 platform may fracture into business and gaming versions before it even hits store shelves. Fragmentation is a major knock against Android -- will Microsoft catch flak from the same verbal grenades?
