John Paczkowski

Recent Posts by John Paczkowski

Your Phone Has Just Committed an Illegal Operation and Will Now Shut Down

“Microsoft is not doing a phone.”

That was Redmond’s terse denial of a report that it is preparing to launch a branded cellphone in the second half of this year. Put forth by analysts from Broadpoint.AmTech, the report speculates that the device would tightly integrate hardware and software, much like Apple’s (AAPL) iPhone, and that Microsoft (MSFT) may uncrate it at the Mobile World Congress in Barcelona later this month. Below, the note in its entirety:

Checks suggest MSFT working on its own smart-phone

MSFT Smart-Phone Launch? Multiple industry sources are telling us that MSFT is planning to launch a smartphone. We are told it will be a 2H launch. We do not see this as landscape changing, much like their Zune launch. There are however more established competitors in the smartphone space (RIMM, AAPL, HTC, NOK) and interesting contenders (GOOG, PALM). The Zune effort certainly did not change the iPod/ iTunes trajectory, but may have taken some share from weaker players including those using Windows DRM.

While not landscape changing, one take-away is a confirmation that a vertically integrated model of hardware and software (AAPL, RIMM) is proving to be the preferred model. This follows NOK’s acquisition of Symbian (and SYNC, NVT, etc).

We find MSFT’s strategy as a bit puzzling–may be frustration that the Windows Mobile product is not getting the mind-share / market share with RIMM, AAPL and even Google Android stealing the thunder. We suspect MSFT may alienate some of their existing Windows-Mobile customers who will now compete with them in hardware.

Smart phones matter. We read MSFT’s own entry into the smart-phone category as confirmation of the importance / growth opportunity of Smart Phones. Reference our smart phone / net book discussion from late last year which discusses the clash between the PC industry and Cell Phone industry.

There could be an announcement at 3GSM. We will be attending MSFT’s analyst event at the show in Barcelona on Feb. 16th. There is also an analyst event in New York Feb 24th.

[Image credit: ZuneScene]


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