Newsmaker: Bach answers the call at Microsoft

It took Microsoft quite a while to get going in the phone business, but Robbie Bach is convinced the software maker has made the right call.

The initial Windows phones were clunky and quirky, but Microsoft has kept at it, winning support from key carriers and device makers. It scored a major coup in 2005, when Palm announced it would start selling Windows Mobile-based Treos. Microsoft's software has since found its way into other must-have gadgets, such as Samsung's BlackJack and T-Mobile's Dash.

In an interview ahead of the 3GSM World Congress trade show in Barcelona, Entertainment and Devices unit President Robbie Bach talked about where Microsoft is going in the phone business. He touched on the new Windows Mobile 6 operating system, which makes its debut at 3GSM.

Bach also offered his thoughts on Apple's iPhone, Steve Jobs' call for an end to digital rights management and explained why a Zune phone may not be right around the corner.

Q: Apple has gotten a tremendous amount of buzz with the iPhone. I'm curious what you make of it.
Bach: Apple always brings interest to an area, and certainly, this isn't any exception. Certainly, a $500 phone is a proposition that some set of early adopters will want to take a look at. There are a lot of people who are Apple fans that will want to take a look at it. $500 plus a two-year sign-up really puts you in a certain marketplace.

The other thing I'll say about it is their strategy is quite different from ours. Our strategy focuses on helping you bridge the things you do in your work-style and the things you do in your lifestyle. If you think about Windows Mobile and the work we do integrating with mail and Exchange, while at the same time providing people with multimedia capabilities, text messaging, our Windows Live services, search, etc., we kind of span that view. Apple comes at it more from a pure lifestyle perspective.

There is certainly a market for that, but we think the bulk of the market is people who want a phone that does things both for their work-style and for their lifestyle.

One of the specific things about the iPhone is the fact that it is all touch screen. Prada and others are trying this too. Are buttons passé?
Bach: No, actually. I think it's a reasonable question whether touch screens or buttons are a better approach. We've had touch screens on Windows Mobile for three or four years.

Listen up

Microsoft on iPhone Robbie Bach, Microsoft's entertainment and devices unit president, comments on Apple's phone.

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Microsoft phone? Bach discusses the possibility of a Zune phone.

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DRM's future How does Microsoft feel about Steve Jobs' call for an end to DRM? Bach responds.

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Depending on what you want to use the phone for, sometimes touch screen is a good thing, sometimes it is not. The experience we've had with people who want to type (is that) touch screen actually tends to be a little difficult. People tend to prefer the tactile feel of doing buttons.

Likewise, if you are going to do a lot of video on a device, having a screen that's constantly got your hands on it--constantly getting pounded--may or may not be the right thing.

I think it's an open question. Certainly, the touch screen gives you a little more flexibility, in the sense that you can project on that screen whatever you want. There are tradeoffs you have to make. We'll have both on Windows Mobile, that's for sure.

I'd be remiss if I didn't ask your thoughts about Steve Jobs' letter. Is it time for an end to digital rights management?
Bach: Our job really is to provide the tools and the technology that we get requested from our operator partners and from our media and content partners. I don't have a strong view about DRM, other than when people ask for it, we're going to do a great job implementing it and driving it.

The only people who ultimately get to opine on that are the people who are the content owners themselves. We're huge believers and will always be believers in protecting intellectual property. DRM is certainly one of those ways to protect that intellectual property. You are going to see us continue to do great work on DRM, because we think it is going to be a part of the landscape going forward.

Microsoft is announcing Windows Mobile 6 at the show. Why is this release important for Microsoft?
Bach: If you look at the progression of our business in the Windows Mobile space, we've now reached a critical milestone. We've gone from being a small provider with a few handsets and a few operators to--we have now almost 50 operators and almost 150 phones. That business is growing quite well.

What do you see the role of gaming on the phone? Is it just casual games, or is there an opportunity for more? If so, what does that "more" look like?
Bach: Generally the assumption--and I think it is probably right--is that this is this will tend to be more casual, broad-based games. Games that I am going to spend 5, 10 minutes on; not games I am going to spend 5, 10 hours on.

The final thing you have to say is, "OK, what's the business model? Is this a subscription, is it a paid-for download? Is it an advertising-based model?"

This is a place where I don't think there's a lot of consensus yet. I think the marketplace is still evolving a reasonable amount. It's not like in the PC gaming market, or in the console gaming market, where we have an established model--You go out and pay $49 or $59 for a game, you take the package home and put the DVD in. It obviously doesn't work that way. The operators are involved, and there's more people involved in the ecosystem. I think the business model part is, in some ways, the most challenging. How much absolute dollars are there to flow around?

More Newsmakers

[hawtdog]

A refreshing perspective

First, I'm a huge Apple guy. But, I must say it was nice to hear someone from the dark-side actually say that Apple might be after a different market. Whether or not that's true remains to be seen, but in the ever raging Microsoft/Apple war it was nice to hear someone not just denigrate the competitor at every moment possible. Sure, the company he works for is pure evil, but at least he can play nice in interviews.

[Macsaresafer]

He isn't playing nice.

He's trying to leverage Microsoft's OS monopoly in the enterprise
to scare people from buying the iPhone. What's worse, he's
expanding on Bill Gate's lies to do it.

There is no lifestyle/work-style difference and he knows it. The
iPhone can connect with your companies email servers through
imap and pop, it has Google Maps, which is important for many
businesses, and what business can't benefit from a full web
browser?

The abilitiy to send/receive emails while talking is another
important business feature. In fact, when I first saw the iPhone,
this and several other features had me convinced that this was
the perfect phone for my business. Now I'm supposed to believe
that it isn't just because this guy says so? I think not.

[Surf61]

agreE...

I agree... there is plenty of room for everyone and it is nice to have
a choice...

Personally... everyone I know is excited about the iPhone and I can
not wait!!!

[jabbotts]

it's often good to hear from industry insiders

It definately read like he had a lawyer watching over his shoulder with some of the more intricate wording and understandable "ra ra Microsoft" phrases. Still, good to hear from an industry expert and mature discussion of competitors.

I'd have been curious what they updated in Windows Mobile under the hood myself. Does it still fill it's memory when multiple programs are opened without being closes? As I remember, the older versions quickly return "out of memory" messages if you don't exit programs within the phone.

[robintontx]

great job implementing it (DRM) and driving it.

Guess that is why I still can't activate the DRM (In Microsoft Reader) on my Windows Mobile 5 based phone so I can read the encrypted e-books I mistakenly purchased a few years back.

[redrasys]

whats the bigg deal

Personally, i dont understand what the big deal is with the iPhone. Agreed, it has the coolness factor and all, but i am really really happy with a smartphone i bought for $100 - unless i have lot of money in bank that i am pondering what to spend it on, i am not going to buy a $500 phone just for the coolness factor. i need productivity tools and my tmobile dash goes beyond expectations there. Coolness works for a mp3 player, but not for a work/life device like cellphone. Bach is right, but i guess time will tell.

[Mark Greene]

Coolness doesn't work for phones??

You might want to think over that again.

[phantomsoul]

DRM

...is a criminal practice and those who sell content encoded with it should be sued for violation of basic consumer rights. Period.

[rapier1]

Two things

1) Is that how this exec dealt with Apple is very interesting. He
wasn't dismissive, angry, or even attempting to 'sell' his product
by bashing Apple. Apple execs, on the other hand, often work in
some dig at MS and other producers. Its good to see someone
acting like an adult.

2) The story mentions that when MS started out in the phone
business they didn't have many people behind them and they
had horrible sales. However, they kept plugging away at it and
each iteration took gained more and more market share.
Basically it underlined that MS is dogged in its persuit of its
goals and even initial failures are just seen as a stepping stone.
They have the resources to persue a strategy for years and years
and can afford to make mistakes on the way. Other companies
are in a more fragile position and one big failure will have a
devastating impact. Which I think helps explai what is happening
in point 1.

[mbjr]

I agree...

Especially with #1. Noticed that too. When he was asked about the iPhone, I was expecting him to do a little bashing of Apple with the way Apple was treating MS in the media and trade shows...but...he didn't. Strange. Pretty mature comments from him and shows a level of respect that people SHOULD have in the business world.

But then again bashing competitor produces gets tiresome after the 100th time. I mean yeah, commercials doing this are cute at first, but it starts to get annoying after a while, and makes lose interest in the product itself they're SUPPOSED to market. Not to mention they start to sound and look like little children vying for attention.

[Macsaresafer]

But he was dismissive!

The iPhone "is a proposition that some set of early adopters will
want to take a look at." How do you get more dismissive than
that? He doesn't even know all of the phones capabilities or what
the service plan will be yet, but he's already trying to relegate it
to one little corner of the market.

He's using a straw man: Apple doesn't do business (how do they
manage theirs???) so that he can dismiss not only the phone, but
the rest of their products in one swoop! That's the whole thrust
of his interview!

[mofo111]

Re: Two Points

Oh, come on. Microsoft execs are well known for trash-talking
and dismissing their competition. Ever read the book "Opening
the Xbox" by Dean Takahashi? Remember the part about a pair
of Microsoft Xbox execs in Tokyo drunk in a bar and calling up a
Sony exec late at night around the time of the initial Xbox
launch to ask him what he thought about the Xbox? Remember
the part about them posing for pictures with an Xbox prototype
in front of Sony's office building? Your claim that Microsoft execs
behave like "adults" is laughable. The reason why Bach is so
subdued and diplomatic in the interview is that he is smart
enough to know that iPhone has completely trumped the Zune,
and that any trash-talking by him would be seen as "sour
grapes" by everyone.

It's also laughable that you applaud Microsoft's "dogged pursuit
of its goals" even with flopped "initial failures". You're right
about the initial failures part. Microsoft has a long history of
putting out version-1.0 flops. It makes me wonder who out
there is actually foolish and stupid enough to buy anything new
the Microsoft puts out. Yes, I'm talking to you, all of you Zune
owners.

[Llib Setag]

iPhone = iPod+Phone+Internet

(i.e. It can be used for Business too!)

Ballmer: How are you going to use the iPhone for business when it does even have any keyboard keys?

GUI touch screen system...keyboard is part of GUI & has auto correction during typing.

iPhone can auto-sync all your internet & personal contacts from a PC or MAC computer and email / calendars sync too. Works with Microsoft Exchange Server via Mac OSX. ( so, once again WORKS FOR BUSINESS TOO!)

Don't you love how MS is attempting to paint the iPhone as just "another lifestyle choice device from that toy computer maker Apple",
but MICROSOFT, well THAT'S for serious business people...

Get the facts from the source...

http://www.apple.com/iphone/

http://events.apple.com.edgesuite.net/j47d52oo/event/

[Mister Winky]

You're overlooking wireless sync of calendar, contacts and tasks

In addition to e-mail, a lot of people use their Treos and Blackberry to sync their contacts, calendars and tasks. Treos and Blackberry's can do this over their 3G wireless data connections; the iPhone looks like it won't be able to do this when released (and it isn't 3G).

Many Blackberry and Treo users at my work want iPhones when they come out, but they won't buy them because they don't want to have to go back to their desktops to sync their Exchange-stored info.

In 2007, mobile/wireless sync of all Exchange data is a must for business.

-Mister Winky

[niravabhavsar]

iPhone doesn't have anything new

I don't know why Apple is making a lot of fuss about this. For years HTC and others have fully functional touch screen phones with Keyboard (for keyboard lovers) with Windows Mobile 5 that works pretty well unlike previous versions. Apple is not offering anything that Nokia, Motorola, HTC are not offering for years except for their fancy Mac OS for mobile. So in a way it is just for Apple lovers - which i think are complete idiots.

[Hardrada]

All the typical Microsoft BS

Microsoft's strategy: "we'll keep plugging away until we get it right". They should use this as an advertising slogan. "Windows Vista. It's crappy, but we'll keep plugging away until we get it right."

And his comments regarding DRM also show a complete lack of vision or leadership. I guess that Microsoft is not really interested in selling either the Zune of music. Either that, or they believe that consumers are so stupid that they will just buy whatever Microsoft gives them.

[t8]

Zune Phone

Funny. Nobody wants a Zune, so why would there be a market for a Zune Phone?

[t8]

Zune is second?

Not sure about that.
There are a lot of MP3 players on the market and there have been for some time.

I doubt Zune is a distant second.

[Sumatra-Bosch]

Zune Phone: I Know One Application

You can call them up and laugh at them, too.

Both of them.

[taoman1]

I don't know either

but Zune is a distant second to the iPod. Second place means some people want it.

[t8]

Are you sure?

Not sure about that.
There are a lot of MP3 players on the market and there have been for some time.

I doubt Zune is a distant second, considering the time it has been on the market and it's lack of popularity.

[Mister Winky]

Pretty persuasive argument

Thanks for enlightening us with, well, nothing at all. Can you please reference a popular enterprise-class smart phone that can't sync with Exchange or Notes?

-Mister Winky

[Penguinisto]

Microsoft's Mission Statement, right there:

[i]"Our job really is to provide the tools and the technology that
we get requested from our operator partners and from our
media and content partners."[/i]

...notice how the word "customer" is lacking? Quite telling, one
must say.

I'll stick with OSX and Linux, thanks.

/P

[Sumatra-Bosch]

Customers=Witless Dogs Who Do What MS Wants

You got it.

Customers are completely out of the picture.

They have a choice to buy a computer or not to buy one with Windows. Hey, competition is good except when it comes to OSes on Intel-based CPUs. Then it's not. In fact, choice is evil.




Roberto

[Llib Setag]

Apple iPhone Ad!

http://www.apple.com/iphone/hello/