Updated 4:40 p.m. to note Microsoft not interested in bidding for wireless spectrum.
SAN FRANCISCO--Cell phones are so great these days that some people have started carrying two.
Well, that's not exactly true. A growing number of people do have multiple cell phones, but it's actually a failure, not a success of the industry, Microsoft CEO Steve Ballmer said on Tuesday.
People are finding they need one phone for work and another for home, or one phone for e-mail and another for making phone calls.
"That strikes me as incredibly odd," Ballmer said in a keynote speech at the CTIA Fall 2007 trade show here.
The goal of the industry--and of Microsoft--should be to create devices that work for both home and work and are capable of handling running business applications, unified messaging and gaming.
"In a sense we have to think about the phone as almost a universal remote control for your life," Ballmer said.
Ballmer even conceded that the phone is taking on a more central role than the computer for many people.
"The phone has a unique role," he said. "While the PC is the most powerful device, the phone is most popular device." In a world of services (think Windows Live) that run over a variety of devices, it is the phone that any individual is most likely to have at any given time, he said.
In some cases, the phone will be the computer.
"In many countries the phone will be the PC for people that have very little money," he said, pointing to a scenario in which the phone plugs into a docking station and connects up to a keyboard and television to act as a PC-like device, something Microsoft has been developing in its labs and hopes to start testing over the next 12 months.
How many devices do you carry? For those that do carry more than one, what would it take for you to carry one? Feel free to sound off below or drop me a note.
Update: Ballmer also noted that Microsoft is not planning to bid in the upcoming U.S. wireless spectrum auction as some of its rivals are said to be planning to do.
"What would it buy us to own a piece of spectrum," he said. "It would probably do a lot to alienate the telecom industry."
Well, It doesn't appear that Microsoft will be taking direct aim at the iPhone on Tuesday.
Rather, the software maker is playing to its strengths, announcing a new piece of server software to help businesses manage a company's worth of smartphones.
That doesn't mean Microsoft isn't interested in say, adding a full Web browser into Windows Mobile, according to Scott Horn, a general manager in Microsoft's mobile device unit.
"Do I see a path where we are going to have a phenomenal browsing experience," Horn said. "Yes, I do."
But the bulk of Microsoft's announcements for Tuesday focus on the company's enterprise strengths. The company is announcing a new product, known as System Center Mobile Device Manager 2008 and noting that it is providing start-up funds for Enterprise Mobile, a new Boston-based service provider that will help companies manage the process of doling out smartphones to large workforces.
Focusing on the IT staff is not a bad way to go, considering they are often the ones who decide which phones get bought with the corporate dollar and also which ones are allowed behind the company firewall.
"Smartphones can enhance productivity and save costs for employees throughout the company," Horn said. "CIOs are waking up and saying I want to make smartphones and Windows Mobile first class citizens on the network. (They are saying) 'I want to move beyond a tactical solution for e-mail and for a few people.' "
The new software allows businesses to push out software updates to phones over the air and also provides a VPN system for Windows Mobile devices to get secure access to corporate data, something that in the past has typically required third-party software.
But even that product is some months away. It is only in beta, with the final version set to ship some time in the first half of next year. Microsoft also isn't saying how much the product will cost and notes that existing phones will need an upgrade to work with the software. That's a challenge, because typically the device makers and the carriers need to give the go-ahead for upgrades and they tend not to be all that keen on them since it adds hassle and support calls without providing either with new revenue.
Palm, for example, says the Treo 750 will get the upgrade on AT&T's network, but won't say whether other phones will get the upgrade nor whether more than one network will allow the upgrade.
While Microsoft isn't ready to announce any new iPhone-inspired features, Horn was ready to defend Windows Mobile against Apple's technology, though he wouldn't use the "I" word.
"The list of things that we do that the phone you mentioned doesn't do is a pretty long list," Horn said.
And although Apple may have shipped 1 million iPhones last quarter, that's still a fraction of the 11 million Windows Mobile devices that shipped last year. "We'll sell over 20 (million) this year," Horn said.
The iPhone is a tough act to follow.
That will be the challenge for Microsoft CEO Steve Ballmer, who is keynoting at the CTIA Fall 2007 trade show on Tuesday.
A preshow flyer promised a major news announcement from Microsoft. But what would be considered major for Microsoft in the wake of the iPhone?
To be sure, Microsoft targets a different audience than Apple. Those considering Microsoft's phones are typically e-mail addicts who are more likely to weigh a BlackBerry than anything from Cupertino.
But even business users would benefit from many of the features Apple has packed into the iPod. In particular, full Web browsing, the kind currently found in the iPhone, would seem to be high on the list of the CrackBerry crowd.
And with Apple having already announced plans to allow native development, one of Microsoft's key strengths--add-on applications--won't be a complete differentiator for long. Plus, Apple could cut a deal at any time with RIM, Motorola or even Microsoft itself and start offering corporate e-mail on the iPhone.
So the idea that the iPhone is more of a consumer device, while true now, may not remain true for all that long, and Microsoft would be wise to quickly add on any features that are truly compelling about the iPhone, including a multitouch interface. Microsoft already has that on its Surface tabletop computer. I asked Bill Gates last week when multitouch might find its way onto smaller devices, but didn't get a specific timeframe.
Longer term, Microsoft could even think about putting the full power of Windows in a phone, if it can create a slim version of the operating system. Historically, that has proved a challenge.
Microsoft's smallest full Windows devices, including the Origami devices, still have lots of drawbacks, including high prices, short battery life and sluggish performance, at least compared with what people expect from a pocket device. But processors get ever faster, battery life is set to improve, and the company is working on a slimmer, more efficient Windows core.
The ability to use Windows in smaller devices could prove key to Microsoft. One of the hidden accomplishments of the iPhone is the fact that Apple has proved that OS X can run in all kinds of devices, from servers to iPods. I expect we will see Apple use OS X in ever more devices, from living room products such as a more powerful Apple TV to ultra-small laptops.
Microsoft could certainly benefit from finding a way to give Windows equal flexibility.
Those are my thoughts. What would you like to see Ballmer announce Tuesday? Feel free to sound off below.
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