Microsoft today announced a major shakeup in the continually troubled Entertainment and Devices Division via a letter from Steve Ballmer to employees:
Robbie Bach and J Allard, founding fathers of Microsoft’s Entertainment & Devices Division, are leaving the company as part of a broader restructuring that will give CEO Steve Ballmer more direct oversight of consumer businesses including Microsoft’s struggling mobile unit.
The changes — a major management reorganization, even by Microsoft’s standards — will reshape the division leading the company’s battles against Google, Apple, Sony, Nintendo and other rivals in the hard-fought consumer technology market.
Bach, 48, president of the division since its inception five years ago, isn’t slated to be replaced. That will effectively dissolve the division’s current structure and leave the existing Xbox and Windows Mobile leaders to report to Ballmer starting in July.
Microsoft is describing Bach’s departure as a retirement. He said the decision was his own, and he wasn’t encouraged to leave. He’ll remain at Microsoft through the fall, to ensure a smooth transition.
Speaking with TechFlash, Allard said his decision was unrelated to the recent cancelation of the "Courier" dual-screen tablet project that he had championed inside the company. Allard said he doesn’t plan to work for Apple, Google or any other Microsoft rivals. After 19 years at the company, he said, he wants to devote more time to his personal interests, particularly adventure sports.
The separation of the Windows Mobile unit from the current Entertainment & Devices reporting structure also reflects the company’s efforts to connect its mobile initiatives with a wider range of products, including its online services and traditional software.
Don Mattrick, the senior vice president in charge of Microsoft’s Interactive Entertainment Business, will report directly to Ballmer as part of the management changes, as will Andy Lees, the senior vice president who leads the Mobile Communications Business.
Windows Web Services is born. Antoine Leblond, who has been Senior Vice President of the Office Productivity Applications Group, is moving to a new role: Senior Vice President for the Windows Web Services team. What is Windows Web Services? Good question. CEO Steve Ballmer’s e-mail describes it as “integral Windows services that today deliver updates, solutions, community and depth information for the Windows consumer.” Leblond will be reporting directly to Windows/Windows Live President Steven Sinofsky.
Office gets a new engineering chief. Kurt DelBene, Senior Vice President of the Office Business Productivity Group, is now head of all of the engineering responsibilities for the Office business.
Former Live Platform Services head David Treadwell moves out of the Windows division and into the Interactive Entertainment Business (the part of Microsoft that oversees Xbox and video games).
Xbox has finally started making money after the billions poured into it, but the Windows Mobile story was acknowledged even by Microsoft to be a vast missed opportunity verging on a disaster. Microsoft doesn’t like to lose markets where they used to have a commanding presence. The other entertainment products are yawners (e.g. Zune), but Mac Office is still a money maker and customers still love Microsoft keyboards and mice. Unfortunately they are the smallest and least visible part of the E&D menagerie.
Microsoft today unveiled their much buzzed entry in the mobile phone marketplace, but in keeping with their desire to still sell their phone operating system to the usual phone vendors, it has an oddly circumscribed target customer set:
Microsoft Corp. today announced KIN, a new Windows®Phone designed specifically for people who are actively navigating their social lives. Brought to life through partnerships with Verizon Wireless, Vodafone and Sharp Corporation, KIN is designed to be the ultimate social experience that blends the phone, online services and the PC with breakthrough new experiences called the Loop, Spot and Studio. KIN will be exclusively available from Verizon Wireless in the U.S. beginning in May and from Vodafone this autumn in Germany, Italy, Spain and the United Kingdom.
The New Way to Share
The home screen of the phone is called the KIN Loop, which is always up to date and always on, showing all the things happening in someone’s social world. KIN automatically brings together feeds from leading Microsoft and third-party services such as Facebook, MySpace and Twitter all in one place, making it easier to stay connected. Customers can also select their favorite people, and KIN will automatically prioritize their status updates, messages, feeds and photos. Another unique feature, the KIN Spot is a new way for people to share what’s going on in their world. It lets them focus first on the people and stuff they want to share rather than the specific application they want to use. Videos, photos, text messages, Web pages, location and status updates are shared by simply dragging them to a single place on the phone called the Spot. Once all the people and content are in the Spot to share, the consumer can choose how to share, and start broadcasting.
Your Phone, on the Web
KIN Studio is your phone online. Almost everything created on the phone is available in the cloud from any Web browser. Photos and videos are freed from the confines of the phone and presented in an online visual timeline so they are easy to view and share. The KIN Studio automatically backs up texts, call history, photos, videos and contacts, and populates a personalized digital journal so it’s easy to go back in time to relive a crazy weekend or recent birthday. And the KIN Studio gives customers tons of storage to keep all those photos, videos, contacts and texts so they’ll never run out of space on their phone and lose a memory.
Music and More
KIN will be the first Windows Phone to feature a Zune experience — including music, video, FM radio and podcast playback. With a Zune Pass subscription, customers using Zune software on their PC can listen to millions of songs from Zune Marketplace on their KIN while on the go, or load their personal collection. KIN also has other features customers want in a phone including a rich browser with the ability to share pieces of the Web, local and Web search by Bing, and an RSS feed reader to pull down information on people and stories from the Web.
The KIN is the product previously rumored as the "Pink Phone" and is an descendant of the Sidekick product acquired with the 2008 acquisition of Danger, Inc. As for the target market, the polite way to refer to it is as a "younger crowd," but the temptation is irresistible to refer to the KIN as the Kid’s Phone. I suppose the good news is that Microsoft probably has not burned their bridges with the phone OEM’s, but the bad news is likely that the KIN sinks like a rock. My guess that trying to convince the average teenager that he/she really wants a KIN and not an iPhone or BlackBerry is going to be a tough sell.
As first revealed by The Telegraph, in July 2009, the download service will go live tomorrow in beta. However, the streaming side of the service will only be available to “several thousand” people invited to test the product.
MSN Music had been scheduled to go live by the end of July. However, the product “took longer than they thought it would to get it to the high quality they wanted”, according to Peter Bale, executive producer of MSN.
Microsoft has signed deals with the four major music labels: EMI, Warner Music Group, Universal Music Group and Sony BMG, securing around one million tracks for the launch ready to download. Comparatively iTunes has over 10 million tracks available and 7digital has over eight million tracks in its catalogue. The Telegraph understands independent record labels have yet to be signed.
The service will sit within the ‘Music’ section of MSN and be promoted across the portal. When asked why Microsoft was making a move into the highly competitive world of digital music services, Mr Bale replied: “This shouldn’t be seen as a major company-wide strategic move. We are replacing a service that used to be on MSN a year ago and the service is very much confined to MSN.
Easy for Mr. Bale to say. A more likely rationale is that MSN Music is a stopgap service until the Zune Marketplace finally gets beyond North America:
The download store will be run on the same technology Microsoft uses to power the Zune marketplace in the US. Zune is the company’s music player, which is only available in the US, and similar to Apple’s iTunes, it has its own music download online store. However, Mr Bale said the company’s decision to use the same technology for this service was a logical move and not “necessarily a pre-cursor to Zune launching in the UK”.
I guess they will have to leave the lights on waiting for the Zune to show up.
All of this is more or less understandable except for choosing the MSN Music name which conjures up unpleasant memories of the last MSN Music service which was killed by the Zune in 2006.
One of the perennial questions about Microsoft’s Zune personal media player has been when it would grow beyond a USA-only product and challenge the Apple iPod worldwide. The upcoming retirement of all the older Zune models with the advent of the Zune HD on September 15 is yet another opportunity to jump outside the USA, but it isn’t in the cards:
"For the time being the Zune HD device will remain US-only," a Microsoft spokesperson told Ars. "Right now we are focused on deploying an exciting service in the form of Zune Video to 18 markets. We are looking at potential future hardware experiences for these markets, but do not have anything to announce right now."
It looks as if Microsoft wants to start completely from scratch with the Zune HD; Redmond used the US as a testing ground for the Zune, and it looks as if it wants to do the same with the Zune HD. Microsoft is again entering a saturated market, just this time it’s doing it with a device available in two sizes, instead of one. The Zune didn’t get very far in terms of the number of markets, nor in the number of sales. Can Microsoft get it right on round two?
That’s the impression I get as well – Microsoft will never spend the considerable amount it would require to take the Zune outside the USA until they are really sure they have a contender.