Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
The smartphone operating system could help Microsoft capture mobile market share.
Microsoft Corp.’s big push to compete in the U.S. smartphone market hit store shelves yesterday. The Windows Phone 7 operating system is now on sale and available on AT&T and T-Mobile carrier networks. For now, the operating system is offered on HTC Surround, Samsung Focus and HTC HD7 devices. It will launch on the LG Quantum and Dell Venue Pro in the next few months, Microsoft says.
With Windows Phone 7, Microsoft is banking on what it calls Live Tiles—functions users can customize on their mobile home screen that update automatically. Designed to “get you in, and out, and back to life,” according to Todd Peters, corporate vice president of the mobile communications marketing group, the tiles offer quick access to features such as a Facebook update, contacts, e-mail and messages.
If there’s one consensus among analysts about Windows Phone 7 it’s that Microsoft had to do something substantial to become a viable competitor in the smartphone market. If there’s a second, it’s that the new system faces an uphill battle against Apple Inc’s iPhone and smartphones using Google Inc.’s Android operating system.
Microsoft’s Windows Mobile platform accounted for just 10% of smartphone users for the three months ending in September, down from 12.8% for the three months ending in June, according to research firm comScore Inc. Meanwhile, 21.4% of smartphone owners used a phone with an Android operating system, up from 14.9%, and iPhone held steady with 24.3% of the market. Additionally, new research released yesterday by global research and advisory firm IHL Group finds only 10% of respondents in a study of 570 smartphone owners are seriously considering a Windows smartphone for their next new device.
Nikki Baird, managing partner at research and consulting firm Retail Systems Research says Microsoft will have a lot of catching up to do—particularly in the app department. But she notes that a Windows-based mobile operating system could be well received in the business community, where many professionals are comfortable with Windows-based products.
“There are distinct disadvantages, and the current amount of apps available for the phone is a significant one—Windows 7 pales in comparison to both iPhone and Android,” Baird says. “However, I think the biggest impact and question is what this means for enterprise users. There’s a lot more familiarity out there with Windows in a corporate environment, so it stands a good chance of displacing the iPhone in corporate settings.”
There may be some room for Microsoft on the corporate smartphone front. Research In Motion’s BlackBerry, a smartphone widely used by businesses, is losing ground, according to the comScore data. BlackBerry users represented 37.3% of smartphone users for the three months ending in September, down from 40.1% in the preceding three-month period, comScore finds. And, the IHL study reports only 24% of smartphone users surveyed are seriously considering a BlackBerry for their next mobile device.
And although Baird says Microsoft will need to scramble to create a selection of apps anywhere comparable to those available for Android and the iPhone, Microsoft might not make that a top priority. It says it is placing less importance on apps than other platforms.
“People either take too long to find what they need on their phones or they get distracted and drawn in to unproductive activities simply because they have to click in and open apps to see things,” Microsoft said in a statement. It stressed this yesterday in its unorthodox statement with a study to announce Windows Phone 7 that focuses less on the attributes of the platform and more on “Bad Mobile Phone Behavior.” 72% of adults polled listed bad mobile phone behavior as one of their top 10 pet peeves, and 49% of owners ages 18 to 24 have tripped or walked into something while walking and texting or e-mailing on their mobile phone, the Microsoft study conducted by Harris Interactive finds.
Despite Microsoft’s promise that the design of its operating system will help cure poor mobile manners, Microsoft knows it has its work cut out. “There’s so much more of Microsoft we’ve got to bring out in the phone,” says Terry Myerson, corporate vice president of Windows Phone engineering who led the development group for Windows Phone 7. “We’ve got a lot of work to do.”