Microsoft News Tracker

Microsoft has announced the release to manufacturing (RTM) of Windows Phone 7, their last great hope to recover their position in the smartphone market:

Today is the day that the Windows Phone team has been driving towards, and we’re very excited to say that we’ve reached the biggest milestone for our internal team – the release to manufacturing (RTM) of Windows Phone 7!  While the final integration of Windows Phone 7 with our partners’ hardware, software, and networks is underway, the work of our internal engineering team is largely complete.

Windows Phone 7 is the most thoroughly tested mobile platform Microsoft has ever released.  We had nearly ten thousand devices running automated tests daily, over a half million hours of active self-hosting use, over three and a half million hours of stress test passes, and eight and a half million hours of fully automated test passes.  We’ve had thousands of independent software vendors and early adopters testing our software and giving us great feedback. We are ready.

Now the question is when partnering cell phone hardware vendors and service providers will be ready to launch some Windows Phone 7 phones. The consensus is before the end of the year and perhaps as soon as October. Early reviews range from the dismal to mildly favorable although the missing features enumerated in the latter are a trifle disconcerting.

Last Friday, Joe Wilcox raised the thorny question of whether the iPad is really a PC. It is thorny not just in terms of philosophical and taxonomic abstractions, but in terms of counting by major PC market researchers, Gartner and IDC.

According to Apple’s fiscal third calendar-quarter earnings announcement, 3.472 million Macs shipped during calendar Q2. Apple also shipped 3.27 million iPads. If iPad counts as a PC and the numbers are combined, then Apple shipped 6.742 million personal computers during second quarter. That’s high enough to raise Apple to No. 5 in global PC shipments.

Complete US information is not available, but Wilcox’s analysis shows that adding iPads to the PC total could well put Apple in 3rd place behind market leaders HP and Dell and perhaps higher in Q2. As for Q3:

But what about third quarter? Could Apple top Dell or HP? The answer would depend on how iPad is classified. Is it a PC? If, yes, then based on analysts projections for PCs, Macs and iPads, Apple almost certainly could sell more units than HP or Dell in the United States. I’ve seen Wall Street analysts’ iPad shipment estimates range from about 4 million to over 5 million units. Macs: Hovering above 3 million units. Assuming even half the combined Macs and iPads were sold here, Apple would be in striking distance of topping either HP or Dell.

All of this is more important than bragging rights, of course. The real question is what the iPad surge is doing to the bottom line of the Windows PC hardware makers and to Microsoft’s cash cows of Windows and Office. There may be plenty of room for all with the iPad style tablets creating a wholly new market, but how many iPads are purchased in lieu of a PC or an additional PC? I add that last caveat because the iPad currently has a strong functional dependence on another PC running iTunes so I find it hard to imagine an iPad-only user. Still, grabbing the second PC market has got to hit the Windows PC food chain. Once again, I have to observe that this market could have been Microsoft’s - now we get to see what penalty they will pay for missing it.

I see that Mary Jo Foley has confessed to buying an iPad and I have to confess that I bought one too. Like Mary Jo, it is my first Apple product ever, and like Mary Jo, so far I love it. Or more accurately, I love it when I can get it away from the rest of the family who love it too. Just a few observations, many of which echo Mary Jo’s:

• Yes, it is strictly a consumption device and not a replacement for any of my Windows PCs even with the optional keyboard which I purchased.
• I did not get the cell phone version so cannot comment on that aspect, but running it completely untethered in our Wi-Fi permeated household and at various Wi-Fi hotspots while traveling works like a charm.
• Battery life is fantastic.
• As a previously exclusive Windows user, the Apple user interface and the iPad itself were annoyingly opaque until I discovered Apple’s well hidden iPad User Guide. I still find it painfully obscure in some areas, to wit: to find out what is filling up the rapidly vanishing space on your iPad (mine is nearly full), you apparently have to synch with iTunes on your Windows PC and use good old Windows Explorer to look at the backup directories. I assume that Apple Mac users have to do something similar.
• Related is that there are only 11 screens for application icons which my family blew past in no time. You can still download apps (to the limits of your storage), but you have to search for them by name to run them. Also 11 screens full of icons with rudimentary sorting capability isn’t the slickest UI I have ever seen.
• The App Store at iTunes on the Web reminds me of the early days of the IBM PC when everyone and his cousin was creating programs for the PC. Some apps are great, some are trivial, some are annoying, and some need to be baked a whole lot more. Many apps are free or are offered for a few days for free. My initial view was that the whole iTunes App Store concept was somewhat limiting in what is actually a PC, but it does not seem to be so in practice and the user reviews and simplified update mechanism are useful.
• What’s with the apps that are just packaged Web sites or print magazines? Despite my reluctance, I do have to admit that they generally look and work better as an iPad app though.

If I had to sum it up, the iPad is an incredible amount of fun. There may be a business use in there somewhere but I am not looking for it.

I do wonder how Microsoft missed this market. This is what Microsoft’s Origami (aka UMPC) should have been but wasn’t, perhaps because it came down from the PC world instead of up from smartphones. As Mary Jo observes, Microsoft is apparently going to try again with Windows 7 or Windows Embedded "slates", and we’ll have to see if they can break their persistent run of problems in the "gadget space," but a company that not long ago had such a large chunk of the smartphone market should have seen this coming, particularly since they did not have any partners in this market to slow them down.

Microsoft’s KIN phone didn’t last long - it was announced in April and killed today in favor of the mainline Windows Phone program:

Amid anemic sales, Microsoft has decided to halt work on its Kin phone less than two months after the product hit the market.

The social media-oriented phone will not make its planned European debut and Microsoft is shifting the entire Kin team to work on Windows Phone 7, the Microsoft smartphone operating system due out later this year. Andy Lees, who heads up the company’s cell phone efforts announced the move to Microsoft workers earlier on Wednesday, according to a source close to the company.

A Microsoft spokesman later confirmed the news.

With Microsoft’s decision, it is now unclear whether there will ever be software updates to the phone, including one originally planned for this summer. Over the weekend, Verizon cut the price on the two Kin models by as much as 50 percent.

Microsoft won’t say how much it spent on the Kin launch, but it has been backed by significant TV, Web, and print and radio advertising campaigns.

Neither Verizon nor Microsoft would say how many devices were sold, but a source told CNET that the number of Kins sold thus far is more than 1,000 but south of 10,000–significantly below expectations.

"We don’t share sales data or marketing strategies but the device remains an important part of our portfolio," a Verizon representative said in a statement.

Roz Ho, the Microsoft executive who lead the unit that developed the Kin will oversee the transition of the team and then move to an as-yet-determined role at the company, according to a source.

Every company makes missteps, but this one is destined to be a classic right up there with the Edsel.