Windows Phone 7: Microsoft’s third failed attempt to be Apple
March 26th, 2010
Daniel Eran Dilger
Microsoft’s new Windows Mobile strategy is turning out to be just like its failed strategies for Vista and Zune: a belated, wrongheaded attempt to shamelessly copy Apple too late to make a difference, all while ignoring its own strengths in a delusional, self-destructive bid to be something it is not.
Those who forget the past are condemned to reread it, here. That’s because I like to frame current and future events in a historical context, rather than simply regurgitating the idealism that flows from the tech giants’ own public relations sirens.
This has helped me to be devastatingly accurate in predicting how things are likely to turn out, repeatedly. Microsoft’s latest strategy for its Windows Mobile smartphone platform, which is styled “Windows Phone 7” in line with the company’s hankering for calling a thing by another name to escape its currently disastrous reputation, is no different.
Rather than perpetuating its failed smartphone strategy with Windows Mobile and simply adding a layer of touch features in “version 7,” as the company first announced it would do a couple years ago, Microsoft is now planning to completely replace its existing smartphone platforms (including both button-oriented Windows Smartphones with no touch screen, and its stylus-driven, big screen Pocket PC phones) with a new device “series” that attempts to be as much like the iPhone as possible.
Competing with Apple’s past
The problem for Microsoft is that Windows Phone 7 won’t arrive until the end of the year at the very soonest. By then, Apple will have had the new iPhone 4.0 out for six months. Additionally, WP7 is really targeting the features of iPhone 2.0 from 2008. There’s a reason why Apple does not continue to sell iPhone 2.0 software: it’s outdated.
For starters, there’s no third party app background multitasking in WP7 like there is in today’s WiMo 6.x. That’s because Microsoft realizes that the “multitasking” features of WiMo 6.x are completely terrible, and that it makes more sense to isolate its own first party, bundled apps with background capabilities and simply leave third party apps with a simple “one at a time” run option.
That’s what Apple chose to do in iPhone 2.0 when it initially launched the App Store in 2008. But this summer, the iPhone will be moving beyond this early level of sophistication, adding rich abilities to move between concurrently running apps. This feature will be months old before WP7 actually appears with its three year old copy of Apple’s app strategy.
Similarly, WP7 won’t offer the iPhone’s system-wide copy and paste features that debuted with iPhone 3.0 last year. Apple took its time delivering copy and paste as a feature, resulting in an implementation that works far better than Android’s or other smartphones. But when WP7 shows up at the end of the year, it will again be trailing Apple’s strategy book by years.
No amount of apologetic PR is going to cover that fact up. And while Apple was roundly criticized for delaying copy and past features on the iPhone in 2007-2008, Microsoft’s doing so in 2011 is just too much. The world has moved on.
Microsoft’s in-Flash-uation with runtime apps
After trash-canning its existing Windows Mobile platform and apps (mostly written to Win32), Microsoft is hopeful that developers will flock back to create WP7 apps using Flash 10.1 and Silverlight. But both of those runtimes were created to spruce up the web, and have only recently been thrown at the mobile wall to see if they’ll stick.
There is no significant installed base of Flash 10.1 mobile apps, nor of Silverlight mobile apps. There’s also no installed base of users clamoring for Flash/Silverlight mobile content. And once the early Windows Enthusiast adopters see what is available from these ham-fisted, lowest common denominator runtime platforms, they’ll stop taking about these apps with giddy anticipation.
Flash and Silverlight are not native platforms; they’re a thick layer of “runs anywhere” stuff. And if history has taught us anything, it’s that nothing “runs anywhere” very well at all. Flash and Silverlight are the latest permutation of Java on the web or in mobile devices, which is to say, as tasty as vegemite outside of the Australian reality distortion field.
XNA: as successful as Zune gaming
The other API Microsoft is associating with its WP7 vaporware is XNA, the company’s proprietary framework based on .NET that is intended for games development. According to Windows Enthusiasts and Microsoft’s own product demos, this will somehow shovel PC games and Xbox 360 experiences into the mobile screen of WP7 devices. This is absolutely ridiculous.
For starters, the Zune has already been supported by XNA Game Studio 3.0 since 2008, but that hasn’t resulted in the creation of any games anyone might want to play. But the idea that real desktop PC or console games will scale down to a mobile screen is simply preposterous.
Perhaps Microsoft can demonstrate childishly simply Java/Flash-type games that look thin on the PC and sort of work on mobiles, but that doesn’t mean developers will actually build them or consumers will appreciate them.
These lame demos are nothing like the pantheon of rich, native Cocoa Touch games that actual market forces conspired with major games developers to create for the iPhone and iPod touch. Two years ago, it was seen as slightly controversial for me to describe the iPhone as a gaming platform. That’s not the case today.
Microsoft’s money is not going to help
Even if XNA was wonderful stuff, the fact that nobody has any good reason to buy a Zune or WP7 phone erases any potential for new games development. The reality that Microsoft spent somewhere close to $10 billion dollars erecting its minimally profitable Xbox franchise indicates that just because Microsoft is rich doesn’t mean that it can create success efficiently.
Apple didn’t have to pay anyone to incentivize the development of iPhone and iPod touch games, nor did it have to deeply subsidize its device hardware or buy up games developers. It simply made great products the market flocked to buy and to create unique software content.
There is no evidence Microsoft knows how to do this or can do this short of spending many billions of dollars to prop up an illusion of desirability. And contrary to the fantasies of Windows Enthusiasts, Microsoft’s billions in cash aren’t sitting there ready to be thrown under the tires of its stuck vehicles. That money belongs to its shareholders, who will revolt if the company continues to eradicate its fortunes in a desperate bid to pretend to be like Apple.
This all happened before
If Microsoft’s announcements heralding next year’s WP7 as being all but the match of the iPhone of 2008 sound familiar, it’s because this sort of thing is what the company has done repeatedly over the last decade. This is also the core reason why the company has performed so poorly in expanding its reach over the same period.
In the last ten years, Microsoft’s market capitalization has collapsed from a whopping $590 billion in 2000, back when Apple was valued by shareholders at just $16 billion. But today, Apple has grown to a valuation of $208 billion while Microsoft has settled down to one of just $261 billion.
This didn’t happen because Apple hoodwinked consumers with splashy devil marketing as Windows Enthusiasts like to suggest. It happened because Apple performed brilliantly while Microsoft not only lost sight of its core strengths but actually destroyed itself by chasing after Apple in hopes of stealing what was making Steve Jobs’ company great.
What Happens When Apple Passes Microsoft In Value? Yes, When. (Tech Crunch).
Part I – Windows
Recall that back around 2003-2005, Microsoft was running years-late into the Longhorn project, the successor to Windows XP that had run aground as a project management mess. It wouldn’t ultimately emerge as “Windows Vista” until the end of 2006, and it wasn’t really ready for general consumption until the end of 2007.
By that point, Microsoft had slipped from being the only real option in PC operating systems to being the vendor of a hysterical joke of an operating system that was now being unflatteringly compared to Apple’s Mac OS X at every mention, even by the formerly Microsoft-adoring tech media.
Why did Microsoft bungle Vista so badly after having essentially ruled the roost in PC operating systems since the IBM DOS PC arrived in 1981, and particularly since having stolen Apple’s Macintosh crown in the mid 90s with Windows 95?
A key reason was that Microsoft stopped doing what the company was good at, and attempted to copy the success Apple had created for itself with the development of Mac OS X in 2001, which was based on Steve Jobs’ NeXTSTEP software from the late 80s.
XP: How to successfully rip off Apple
In 2001, Microsoft was successful in stealing Apple’s “X” branding to associate its Windows “2000+ /5.1” product with the buzz surrounding the new NeXT-based Mac OS X. By branding it “Windows XP,” Microsoft successfully syphoned off some of the value of Apple’s work without actually straying from what it did well: shipping an OS that PC makers could put on their systems to avoid having to do their own operating system development.
Windows XP was a great upgrade for both consumers running the dreadful, DOS-based Windows 98/ME, and a significant jump for business users of the NT-based Windows 2000. It wasn’t anything spectacularly groundbreaking, but it didn’t need to be.
Microsoft’s OS monopoly was deeply entrenched and didn’t need to prove itself to users. Most users simply had no other choice and nothing else to compare Windows to in terms of technical sophistication. Most of the world had no idea that 2001’s Windows XP was in many respects less sophisticated than NeXTSTEP from 1988. The Microsoft-enraptured tech media certainly wasn’t about to criticize its largest benefactor in anyway.
After XP, Microsoft stopped trying to carry on with the minor feature upgrades and bug fixes that it had been successfully selling to its PC OEM licensees every year or two and instead made a terrible mistake: it decided to copy Apple. The problem is that Microsoft was nothing like Apple, nor was Windows anything like the Mac in terms of its audience of users and resellers.
Vista: Microsoft’s disastrous Mac OS X clone debacle
Court documents reveal that Microsoft’s executives and managers began a delusional enrapturement with beating Apple at its own game. This involved designating Longhorn’s key features in imitation of Mac OS X, starting with a system-wide compositing graphics engine modeled after Apple’s Mac OS X Quartz Graphics. That feature alone all but sealed Vista’s ultimate failure and rejection in the market.
The problem was that Microsoft wasn’t selling Windows to Mac users (professional graphic designers and customers seeking a glossy, fun desktop experience on their premium-priced computers); it was supposed to be selling Windows to frumpy PC makers with no interest in flare, no appreciation for aesthetics, and really no desire to do anything but poop out easy to market, low quality, cheap PCs.
Microsoft’s PC making partners didn’t want Windows to be great, they wanted it to minimally facilitate their hardware sales as cheaply as possible. Microsoft was making astronomical profits on Windows licensing, but its insatiable greed pushed it focus on nailing down casual piracy while raising the price of Windows and introducing artificially limited “editions” with Vista in hopes that its captive PC audience would pay even more for even less than they had been.
Copied to death
Vista’s fancy graphics layer copied from Mac OS X (albeit six years late) only resulted in making it slower and less compatible with XP’s games and apps and the existing hardware the PC users expected to use it with. Combined with a few other disastrous engineering mistakes, including an entirely new driver model that introduced all sorts of initial hardware issues, Vista tanked right from the starting line and never recovered.
In retrospect, Microsoft clearly should have delivered “Windows XP 2003/05/07” (or otherwise rebranded a series of nominal improvements however the company’s marketing wonks thought best) and simply replicated its wild success in the 1990s, when it excreted regular new editions of Windows, each often worse than the last in some respects, but new enough in various ways to allow the company to inhale billions in revenues for its half-assed efforts at stalling the progress of technological advancement.
That was Microsoft’s core competency; creating a fancy OS that challenged the market and asked consumers to “Think Different” and “Get a Mac,” were elements of Apple’s playbook that Microsoft had no business trying to act out. The result is that, today, the most valuable portion of the global PC market is quickly slipping from Microsoft’s grasp, even as the overall PC business lumbers toward obsolescent erosion as handheld mobile devices increasingly take over.
This all happened before: Part II – MP3 players
While Microsoft was busy converting its ironclad Windows monopoly into the crumpling laughingstock of Vista, it also managed to squeeze in a second, equally disastrous effort at beating Apple at being Apple, despite being completely unqualified to be anything like Apple at all. This time it was Microsoft’s attempt to clone Apple’s new iPod music player.
In the late 90s, Microsoft was scrambling to find some use for Windows CE, the mobile operating system it had created to run clamshell “Handheld PCs,” which were intended to serve as cheap laptop replacements. After the HHPC failed to elicit any attention, Microsoft retargeted its product at the Palm Pilot, hoping that it could steal the PDA market.
In a way, the company did snatch away an expensively waged victory from Palm in the PDA arena, but only after it had become obvious that PDAs were headed nowhere and that victory in PDAs post-2000 was a bit like cornering the buggy whip market in the 1940s. The future of PDAs was clearly going to be delivered by smartphones, but there was also a lot of work left to be done before that market would emerge.
Success to copy: the iPod
In 2001, Apple released the iPod as a sophisticated MP3 player after determining that was the most valuable way to expand its business in mobile devices. By 2004, Apple was gaining new recognition both as a consumer electronics maven and as an emerging player in digital media sales and content distribution with iTunes.
Rather than plugging along being a boring vendor of software, Microsoft decided it would simply take away Apple’s position much like it had a decade prior with Windows 95. The problem was that mobile devices bore little resemblance to commodity PCs of the previous decade.
History only repeats for those who ignore it
Apple wasn’t selling the iPod as a premium priced, specialized tool for creative professionals (as it had with the Mac in the late 80s); it was targeting the iPod at the broad consumer market. Microsoft really had no experience in selling mobile devices and no real success in marketing a Windows-like software layer to mobile device makers.
Over the past decade, Microsoft’s HHPC had failed, Pocket PC PDAs had gone nowhere, Windows Mobile phones were still in early draft stages, and other ideas for applying Windows CE (including the fiasco known as the Gizmondo handheld gaming device) had similarly shown little potential.
The software platform licensing model that had worked so well for the PC wasn’t working at all in mobile devices, but Microsoft and its supporters refused to consider the possibility that, perhaps, Microsoft would be just as bad at pushing “Windows” into mobile devices as it had been in pushing “Windows” into copiers, pens, and tablets in the 1990s. Which is to say, completely and utterly ineffectual.
If you can’t beat em, clone em
Microsoft desperately worked to set up an ecosystem of device makers and music retailers, apparently unaware that there would be no real money to be made in selling software to MP3 device makers, and no real money to be made by store partners who planned to sell and rent digital content to MP3 device owners. Apple appeared to realize this, and so it operated its iTunes Store at break-even just to support sales of its integrated hardware-software product.
Once Microsoft’s “PlaysForSure” effort had become an obvious failure, the company decided to dump everything and pounce upon Apple’s iPod strategies, just as it had blindly copied the strategy for Mac OS X to create the failure known as Vista (and just as it is today doing in ditching Windows Mobile to flatter the iPhone with some weak efforts at imitation in its WP7 strategy).
In doing so, Microsoft would eclipse the connotation of disastrous incompetence that it had branded into the tech world’s notion of the word “Vista,” and capture an even more intensely profound sense of inept failure in “Zune,” the nonsense word it had unwittingly selected for such ostracism.
The problem with Zune wasn’t that Microsoft had created a completely terrible product; the device was actually developed by Toshiba, and worked serviceably as an MP3 player. The core problem with Zune was that it wasn’t really competitive with the iPod in any respect. That was a critical problem because by 2006 the iPod was already firmly entrenched as the standard in MP3 players.
Why Zune failed
Microsoft’s Zune effort targeted where the iPod’s puck had been in 2005, not where it was headed. At the late 2006 Zune launch, Apple flexed its component pricing muscle to undercut Microsoft’s original asking price. Additionally, Apple had a series of mature iPod hardware and iTunes software features that Microsoft simply didn’t have time to match by the Zune’s debut. Then, just a few months later Apple debuted the iPhone, which instantly rendered the Zune a laughably outdated relic.
This happened despite the cries of Microsoft Enthusiasts who insisted that the 2006 Zune should only be compared to the 2005 hard-drive based iPod, because that’s all the vision Microsoft had exercised in developing the Zune as a product.
However, the market realized that Apple had a far more advanced idea of what it planned to debut in 2007; that included the iPod touch later that year, which dropped just as Microsoft attempted to push out a slightly improved, second-generation but still third rate Zune lineup.
By the time Microsoft followed up with its third generation Zune HD a year later, Apple had already established the iPhone and iPod touch as a strong software platform with lots of developer support creating apps and a vast installed base of users ready to pay for them. There was no real reason for any iPhone OS users to defect to the Zune HD; it wasn’t cheaper, it didn’t really do anything of value better, and lacked both the developer interest and an installed base that might ever change that.
There was also no real market for “fancy MP3 player” users outside of the one Apple had created for itself. The market was no longer emerging; it was mature. Microsoft was simply too late, and offering too little to make up for its lost time.
This is all happening again: Part III – the smartphone
When Apple first announced the iPhone, Microsoft’s chief executive smirked at its price and directed attention to his own company’s low cost alternatives, including the simple Motorola Q, a cheap button-oriented device without a touch screen. Microsoft was also attempting to sell more expensive, PDA-based Pocket PC smartphones with a touch-sensitive screen, but these used an old fashioned stylus, not the multitouch-savvy, finger sensitive capacitance screen of the iPhone.
Over the next three years, Microsoft failed to deliver anything other than minor bug fixes to its Windows Mobile platform even as the iPhone decimated Microsoft’s smartphone market share. Windows Mobile 7, which was originally promised to arrive last fall and bring multitouch features with it, ended up being delayed for WiMo 6.5, a minor upgrade hailed in a marketing partnership with LG last year. Since then, WiMo sales have only tanked further, even as the company struggled to clone Apple’s iTunes App Store under the name Windows Marketplace for Mobile.
When that didn’t immediately result in success, Microsoft announced WP7 as a new strategy intended to wipe out the failure associated with WiMo by delivering something with flashy print-style graphics reminiscent of the Zune, as if begin at all like the Zune was even a good idea.
Microsoft eats its partners, slaps its users
Just as the Zune stomped on Microsoft’s PlaysForSure partners, WP7 will destroy the existing WiMo platform and obsolesce all of the titles created by Microsoft’s existing third party software developers, as I anticipated last August.
This type of thing would be bewailed as completely outrageous if it were pulled off by any other company, a true testament to the lack of credibility among the tech world’s blindly gullible pundits who spew Microsoft’s press releases without criticism, in anticipation of their next box of free products from the company.
WP7 will also relegate all those (often very expensive) WiMo 6.1 and 6.5 phones that Microsoft did manage to sell to users over the past three years into the dusty old gadget box, as the company has no plans to or interest in supporting its existing users on the new smartphone platform via a software upgrade.
Who exactly will be buying new WP7 phones? Will it be the old WiMo customers Microsoft kicked to the curb? Will it be the weak minority of Zune fans who weren’t able to rescue Microsoft from embarrassment over the past three years of its trying to sell that? Will it be iPhone users who want to revert back two or three years into the past technologically?
I know Apple, and you Microsoft are no Apple
Microsoft seems to think that if it builds the WP7 platform of devices, a market will create itself. But that wasn’t really the case with HHPC, nor Pocket PC, nor Tablet PC, nor ten years of Windows Mobile, nor PlaysForSure, nor Spot watches, nor Mira terminals, nor “Origami” UMPC tablets, nor three years of Zune, nor this year’s Slate PC.
Microsoft needs to recognizing that it’s simply no good at being Apple because it’s nothing like Apple. Sure, it was able to rip off the Macintosh in the mid 90s, but that was because both companies (back then) were being run by salesmen. Microsoft was also able to rip off Netscape to create the Internet Explorer monopoly and emulate Sony in creating the Xbox franchise, but both of those companies were weak or poorly managed, and nothing like today’s Apple.
Today’s Apple is creating something that neither entrenched smartphone leaders nor the top consumer electronics firms have been able to match. So why does Microsoft, which has never had any real successful presence in marketing technology directly to consumers, think it can play in this arena?
This company needs to go back to doing what it does best, which is apparently ripping off the enterprise with outrageously expensive software licensing tied to a proprietary trap. That core competency just doesn’t translate into the smartphone business.