Microsoft

After months of talking about Windows Mobile 6.5, Microsoft is announcing on Tuesday that the first crop of phones to carry the Windows Phone brand are ready to hit the market.

A host of new phones running the new operating system are expected to debut between now and the holidays, with many being announced later on Tuesday. AT&T has already announced two Windows Mobile 6.5-based phones--the Pure and the HTC Tilt 2. In all, Microsoft has said to expect more than 30 phones running the OS by year's end.

(Credit: Microsoft)

With the new operating system, Microsoft hopes to make the case that the devices are not only worthy phones, but also the best option for those who want to take their Windows world with them. The operating system itself features Adobe Flash support, an improved browser, and menus that are easier to navigate with a finger, as opposed to a stylus. Perhaps more interesting are two new services that come along with Windows.

The first, the Windows Marketplace, is Microsoft's answer to the iPhone's App Store. It's somewhat interesting that Windows Mobile has long had more programs than the iPhone--none of which involved approval from Microsoft. But Microsoft has found itself in the position of having to insert itself as middleman to match Apple's approach.

Users will still be able to buy and download applications directly from developers, but Microsoft apparently felt it had to mimic the iPhone's App Store in order to help connect less technically savvy users with the thousands of programs that already exist for its phones.

The second service, My Phone, has been in testing for a while now. Just debuting, though, is a paid "Find My Phone" feature that costs $5 per use (although you pay only when you need the service, unlike Apple's iPhone-finding service, which requires a $99-per-year MobileMe subscription). The service can be used to locate a missing phone, make it ring (even if it is set to vibrate) or even remotely lock or wipe the device.

The big question, though, is if any of these changes are enough to get Microsoft back into serious consideration in a smartphone market that not only includes the iPhone, but also devices running the Android, Palm WebOS, and BlackBerry operating systems.

That challenge--to gain both market share and developer attention--was highlighted by this past weekend's Code Camp held at Silicon Valley's Foothill College. According to one attendee, a session on Windows Mobile 6.5 attracted just six people--three of them from Microsoft--while the iPhone session filled a large lecture hall.

Even some of Microsoft's partners have moved on, with Motorola and Palm among the more high-profile companies to focus their attention on other operating systems.

That said, one recent report suggests it's too soon to count Microsoft out. Market researcher iSuppli projects that Windows Mobile will manage to triple its volume by 2013 and reclaim the No. 2 operating system spot worldwide.

"Windows Mobile is facing a host of challenges, including rising competition from free alternatives like Symbian and Android, the loss of some key licensees, and some shortcomings in its user interface," iSuppli analyst Tina Teng said in a report. "However, Windows Mobile holds some major cards that will allow it to remain a competitive player in the market."

Even after several years of progress that Microsoft executives admit has been too slow, Microsoft still has 15 percent of the market, according to iSuppli. In part, that's because the phones remain an inexpensive and easy-to-support option for many businesses that use Microsoft's e-mail server and management tools.

For its interface tweaks and new services, Windows Mobile 6.5 is an interim update to Windows Mobile, inserted into the product's road map only after a larger overhaul--Windows Mobile 7--got held up in various delays.

Microsoft is now expected to debut that product--as well as Windows Mobile-based successors to the Sidekick family known collectively by the code name Pink--sometime next year.

Teng noted that the lack of support for the kind of capacitive touch screen found on the iPhone is a key drawback for Microsoft's partners.

"This represents a major barrier for smartphone (makers) that would like to produce innovative phones," Teng said. However, she said she expects that to be remedied with Windows Mobile 7.

In the meantime, Microsoft plans to push hard on the marketing front, launching a large ad campaign for Windows Phone that will include some TV spots in addition to print and online advertisements.

The launch of Windows Mobile 6.5 comes both as CTIA wireless show kicks off in San Diego and Microsoft's Robbie Bach hosts a consumer event in New York.

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.

Microsoft demonstrated Windows Mobile 6.5 at the GSMA Mobile World Congress in Barcelona. That interim update to Windows Mobile will start arriving on phones this fall, while a more radical overhaul of Redmond's cell phone OS is due next year.

(Credit: Marguerite Reardon/CNET News)

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.

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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.

Windows Mobile 6.5 phones still aren't expected to arrive until the second half of the year, but Microsoft sounds like it's ready to show off the new operating system next month.

Electronista spotted a post to Microsoft's Windows Mobile blog last week that said the company is planning to "launch" the new mobile operating system at TechEd 2009, scheduled for May 11. "Launch" can mean an awful lot of things in the business world, and in this case, it's likely that Microsoft is referring to the "release to manufacturing" milestone, when a product is made available to its handset partners for testing and certification.

Representatives from Microsoft did not immediately respond to a request for clarification on what will announced or demonstrated in May. When Microsoft CEO Steve Ballmer discussed Windows Mobile 6.5 in February at the Mobile World Congress, he said that phones with the new software wouldn't be available until the second half of the year.

Updated 4:15pm - Microsoft issued a statement regarding Windows Mobile 6.5 and TechEd 2009. And here it is:

"We're excited about TechEd as an opportunity to talk to business customers and developers about the software for the next generation of Windows phones. There will be several sessions we think will help people learn more to get their planning ideas started about the new phones coming to market in the 2H of 2009."

Microsoft's Robbie Bach (left) and Gian Wilson demonstrate how Windows 7 offers built-in software for connecting to 3G wireless networks.

(Credit: Maggie Reardon/CNET)

LAS VEGAS--Microsoft had little new to say about its Windows Mobile phones at CTIA 2009, but reinforced its intention to play in all the future arenas of personal computing.

Robbie Bach, head of Microsoft's Entertainment and Devices Division, ran through essentially the same news that his boss, CEO Steve Ballmer, presented about six weeks ago during the Mobile World Conference in Barcelona, Spain. The company demonstrated how Windows 7 has built-in software for connecting to 3G wireless networks, showed off some of the features of Windows Mobile 6.5, and played a quick video highlighting its mobile application store, Windows Marketplace for Mobile.

The demonstrations were all geared around Bach's central theme of the "three screens": the PC, the television, and the mobile phone. Microsoft intends to make sure Windows is able to give people access to their personal data, information, and services on all three of those screens.

Microsoft spent as much time showing off how HP's Mini 1000 Netbook is capable of connecting to 3G wireless networks with software built into Windows 7 as it did demonstrating Windows Mobile 6.5, and barely mentioned Windows Marketplace for Mobile during a week when mobile application stores are a big topic.

But Bach promised that Windows Mobile phones will be the subject of Microsoft's next big advertising push, and said the company's partners will have 10 phones running Windows Mobile 6.5 ready when that operating system arrives in the second half of this year.

Microsoft on Wednesday is offering up more details on its would-be rival to the iPhone's app store.

The software maker said it will charge developers $99 a year, plus $99 for each application they submit to get an app into the Windows Marketplace store. Through the end of this year, though, developers who register will be able to submit five applications at no additional charge.

The software maker defended the charge: "Microsoft will run a rigorous certification process to ensure that the end user's experience is optimal, and that the device and network resources aren't used in a malicious way," a Microsoft representative said in a statement. "This process has a significant cost and Microsoft believes $99 is an acceptable cost of doing business for (software developers) looking to get in front of millions of customers."

The software maker pledged that it will also offer developers "complete transparency throughout the application submission process" as well as direct feedback. Apple has been criticized for being slow to respond to developer questions while an application is in the approval process, as well as providing developers with little information as to why certain applications were rejected.

Developers who choose to charge for their programs will keep 70 percent of the proceeds. (Free titles will also be allowed). By comparison, Apple also gives developers 70 percent of app sales through its App Store for the iPhone and iPod Touch. Research In Motion has pledged to give developers an 80 percent cut in their forthcoming store.

Microsoft announced plans for the mobile application store at last month's Mobile World Congress. The store is set to debut with the launch of Windows Mobile 6.5 in the fourth quarter of this year.

The software maker plans to let developers start registering in the spring and begin submitting applications this summer.

Microsoft also said it was launching a sales and marketing program to help developers, though it didn't say how large that program will be.

Windows Mobile 6.5 running on an HTC Touch Diamond2 was shown off at GSMA 2009.

(Credit: Crave UK)

A phone running the beta of Microsoft's new Windows Mobile 6.5 has gone missing from a Telstra executive, a spokesperson for the Australian telecommunications company confirmed to sister site ZDNET Australia.

Early reports claimed the phone had been given to Telstra chief executive Sol Trujillo, but Telstra says that is not true. Several online reports suggest the phone was pickpocketed, but Telstra would not confirm details of how the phone was lost. What we do know is that the phone had been loaned by Microsoft to a Telstra executive during the Mobile World Congress, a huge mobile technology conference in Barcelona, Spain. A report in The Courier Mail suggests that the phone was either an HTC Touch Pro2 or the HTC Touch Diamond2, running the new Windows Mobile 6.5 operating system.

Microsoft unveiled the newest version of its mobile operating system on Monday. Microsoft showed off the OS running on an HTC Touch Diamond2 on Tuesday (see the photo gallery here).

Suzanne Tindal of ZDNet Australia reported from Sydney.

Prithvi Raj, a product manager for Microsoft, demonstrates the new Windows Mobile 6.5 running in an HTC touch-screen handset at the GSMA Mobile World Congress 2009 in Barcelona.

(Credit: Marguerite Reardon/CNET Networks)

Microsoft is trying to sell the world on the notion of a "Windows phone."

The first part of that effort is simple. It's a rebranding exercise. Although Microsoft will continue to sell its Windows Mobile operating system, it is going to put its marketing muscle behind the term "Windows phone" to describe the devices that run its software.

The second part is trickier: convincing consumers that they want a Windows phone as opposed to all of the other smartphones on the market, such as the iPhone, BlackBerry, or Palm's Pre, to name just a few.

On Monday at the Mobile World Congress event in Barcelona, Spain, the company is showing off Windows Mobile 6.5, an update to its operating system aimed at making the software more "finger friendly" and just more appealing to consumers in general. The update, which won't show up on phones until the fourth quarter of this year, also features an update to the mobile Internet Explorer browser and a new "marketplace" for buying software that can run on the phone.

Images: A peek at Windows Mobile 6.5

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Microsoft will also formally announce its My Phone backup and restore service, some details of which leaked out earlier this month. The service is designed to not only make sure things like calendar and contact data are synced to the Web, but also other phone data such as photos and text messages.

These are the kinds of improvements that Windows Mobile boss Andy Lees said he was alluding to in an interview with CNET last month, where he laid out Microsoft's vision for the phone.

"We talked about importance of the device being easier to use and being a window in on your life," Lees said in an interview on Friday, shortly before he headed to Barcelona.

In the earlier interview, Lees acknowledged that Microsoft had fallen somewhat behind by trying to offer software that could run on "the least common denominator" of hardware, but said that the next 12 to 18 months would bring a series of announcements that would help Microsoft thrive in a world in which phones will soon have dual-core processors and graphics abilities to rival the original Xbox.

With the new software update, Microsoft is adding a rival to the iPhone's App Store as well as making its software easier to use without having to reach for a stylus or flip down a keyboard.

But it remains a question whether Microsoft's changes will be enough, particularly as rivals improve their products over the coming year.

On the browsing front, for example, Microsoft is focusing on the fact that, while other browsers may look nice, Mobile IE can do more than the others because it is compatible with the desktop Internet Explorer 6 and with Adobe's Flash. Microsoft commissioned a study that found its browser can execute "up to 48 percent more assigned tasks than the other browsers and phones studied."

However, it is unclear that such metrics--as opposed to just plain ease of use--are what consumers use to select a phone.

Lees notes that supporting multitouch, a la the iPhone, has its downsides as well. Such phones require capacitive screens which are less precise, making things like handwriting recognition less feasible. Microsoft sells many Windows phones, for example, in Asian countries where handwriting recognition can prove far quicker than a keyboard for entering text.