Microsoft's efforts to regain lost ground in the mobile phone business will see the company offering two different versions of its operating system next year.
The company will continue to broadly sell Windows Mobile 6.5 to a large variety of handset makers, while working more closely with several handset makers to sell phones built on a new version of Windows Mobile that has been several years in the making, according to a source familiar with the company's plans.
While Windows Mobile 6.5 is a fairly interim update to the mobile operating system that Microsoft has been selling, Microsoft has also been working on more radical efforts to overhaul the operating system. Both its plans for Windows Mobile 7 and its long-running "Pink" project aim to match the kinds of experiences seen on the iPhone and Android, using more advanced voice and touch interfaces and higher-end hardware.
A Digitimes report this week called the effort a "dual-platform" strategy, although I'm not sure I'd use that term to describe two versions of Windows Mobile being sold at the same time.
What is clear is that Microsoft needs to do something serious if it hopes to live up to its mobile ambitions. For years now, the company has made rather modest updates to the Windows Mobile operating system, which dates back to the days of code powered PDAs and other organizers that were neither phones nor, in some cases, even connected to the Internet.
In that same time, Palm has gone back to the drawing board and reinvented itself with the WebOS-based Pre, while the iPhone and Android have entered the market and even Research In Motion has arguably done more to capture consumer interest than has Microsoft.
Internally, Redmond has shifted a number of its people into the mobile unit. In addition to former server executive Andy Lees, who now runs the phone business, former Mac Business unit chief Roz Ho has been leading a top secret "premium mobile experiences" team responsible for some of the "Pink" work. The company purchased Danger, known for creating the teen-centered T-Mobile Sidekick, and Ho heads that unit as well.
The software maker has also tapped folks from its Tellme unit to help bring improved voice recognition capability into Windows Mobile.
Microsoft has been working on Windows Mobile 7 for what now seems like an eternity, especially in the mobile world. The product was supposed to be in phone makers' hands by early this year, but has suffered a number of delays.
Officially, the company will discuss only Windows Mobile 6.5 and its plan to start using the "Windows Phone" brand.
"We're on track to deliver Windows Phones that will be running Windows Mobile 6.5 this fall," a representative said.
But, in a discussion with reporters earlier this year, Microsoft Entertainment unit president Robbie Bach stressed the importance of new user interfaces, such as touch and voice.
"Independent of specific plans for any specific product, you should just assume over time that that's going to become part of the products that we produce," Bach said, according to a Seattle Times account. "And, you know, specific timing and all those things, I'll leave aside, but it is a huge trend. And once you have something like touch or voice to interact with, you wonder why you did it the old way."
And, although Microsoft has denied it is looking to enter the handset business itself, it has said it thinks it needs to partner more closely with a few companies in order to produce more competitive devices.
"To date, we haven't done as good a job as I would like in building the relationships and getting the right level of integration," Bach said at the company's financial analyst meeting last month. "Obviously phones take time to develop, so that won't happen overnight, but you're going to see a dramatic improvement in the integration between what we do in the software and what our hardware partners do on the hardware side."
The company has also aimed to have its software run on the widest range of devices, resulting in what Lees and Bach have both called a "lowest common denominator" experience.
In a July interview with CNET News, Bach acknowledged that Microsoft also just needs to pick up the pace.
"If your point is we haven't advanced Windows Mobile as fast as we like, I think the answer is that's true," Bach said. "You are going to see that change."
However, Bach didn't say much more about where Microsoft is headed, other than to point out that the company has made a lot of changes to the team working on the product over the last year.
"My view on these topics is talk is cheap," he said. "The next thing we are going to show people is Windows Mobile 6.5. There's plenty of innovation in the pipeline."
Update:: This is not Windows Mobile 7, but I just saw this parody video on Mashable and had to include.