Microsoft plans to replicate some processes from the PC industry to try to boost its performance in the mobile market and expects to see a growing number of applications in its new Marketplace, said a company executive.
In a wide ranging interview, Andy Lees, senior vice president of mobile communications for Microsoft, confirmed that for the first time the company will release hardware reference designs to make it easier for handset makers to use Windows Mobile.
Microsoft has hinted at the reference design plan previously and Lees described the idea from a high level. "Our goal is to enable maximum choice but in a way that adds an element of structure so that everybody can get on and do their own thing somewhat independently," he told us during the CTIA conference.
Reference designs define the way that various phone components work together so that hardware makers don't have to develop that integration work themselves. "It offers them a higher baseline upon which they can innovate. It means it is significantly faster and cheaper for more innovations to come out to market from the OEMs," Lees said.
In offering the reference designs, Microsoft hopes to replicate the development process used by PC manufacturers. Reference designs help PC manufacturers build to defined specifications, yet give them enough room to differentiate their products, he said. Microsoft is hoping for the same environment in phones.
Lees would not describe specifics of what the designs might look like but said that the company would announce more details of its plan in the future.
In addition to an expectation for improved handsets in the future, Microsoft is expecting more and better applications in its new Application Marketplace. The Marketplace appeared for the first time this week on the new Windows Mobile 6.5.
The store launched with 246 applications, a far cry from the 85,000 in the iPhone App Store and half the number the App Store launched with. There are also far fewer apps available in the store than the 18,000 that Microsoft often boasts are commercially available for Windows Mobile.
But the Marketplace only began accepting applications recently and more will come, Lees said.
Some of those will be existing applications that developers will port from the other competitive platforms, he said. "Most of the apps are written small and light and it's very easy to transfer those between platforms," he said. Developers will be encouraged to move their applications to Windows Mobile based on the size of the market, he said.
While it's great to see the proliferation of such small applications, "the way to measure the importance of a platform is not just on the number of smaller apps," Lees said.
In fact, many applications that run on Windows Mobile phones that are useful in the enterprise won't appear in the Marketplace. That's because they might be developed internally by an enterprise.
Lees expects that enterprises will play a growing role in the development of mobile applications. "The number of smartphones inside of [enterprise] users' hands is increasing dramatically, so it makes it more cost effective to produce applications," he said. That's because businesses can more easily justify the investment in application development if the app will be used by more employees.
While Microsoft has put a new emphasis on adding consumer features into its mobile software, it still thinks that enterprises will be drawn to the phones because they integrate with existing backend enterprise systems, he said. "From an enterprise perspective, we have a very strong value proposition," he said.
Still, critics say that employees are increasingly pressuring their employers to let them use innovative and popular devices like the iPhone. Microsoft has been slow to respond to the new trends set by the iPhone, with Windows Mobile 6.5 being its first release since the iPhone launched over two years ago.
That slow response may have contributed to a loss in market share for Windows Mobile. Despite increased sales volumes, by the second quarter this year, Windows Mobile's share had decreased to 9 percent, the lowest since the first quarter of 2006 and down from 14.3 percent in the second quarter of 2008, according to research from Canalys.
But Lees said the best is yet to come. The market should look forward to "a whole bunch more milestones coming out over the next 12 to 18 months," he said. Microsoft is now setting the stage for success in the five to ten year period. "Microsoft has a good track record of stepping back and saying, 'what will customers want in that stage,'" he said.
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