Microsoft Works the Phones

On Monday in New York, Microsoft CEO Steve Ballmer will unveil a new line of smart phones that represent a complete reworking of Microsoft’s unsuccessful strategy for the mobile market.

The phones will run a new mobile operating system, known as Windows Phone 7, that makes heavy use of the latest touch-screen technology. Instead of displaying an array of application buttons, the phones’ home screens are oversized pages of constantly changing information, such as live status updates and photo posts from your Facebook friends. The home screen, and those of many applications, are several times wider than the touch-screen display, and can be thumbed to the left and right in what Microsoft calls a panoramic layout.

Microsoft’s slogan for Windows Phone 7, or WP7, as it’s being called, is “Life in Motion.” Microsoft also needs to get its wireless market share in motion. A Nielsen survey found that in the six months ending in August, Google-powered Android phones accounted for 32 percent of the smart phones sold in the U.S., while Research In Motion’s BlackBerry had 26 percent and Apple had 25 percent. Microsoft’s phones are lumped into Nielsen’s “other” category, with less than 5 percent of sales. If Microsoft can’t establish itself on mobile gadgets, it risks becoming an afterthought on the fastest-developing computing platform.

As with previous phones that used Microsoft software, these devices will come from several manufacturers and be sold by multiple wireless service providers to be announced Monday. As you’d expect, WP7 supports Microsoft’s Word, Excel, and PowerPoint programs, as well as its corporate Exchange e-mail software, its free Skydrive service for home consumers, Bing search and maps, and the Xbox Live multiplayer game service.

But in an important twist, Microsoft has stopped trying to cram the Windows desktop and laptop interface onto a phone. Instead, WP7 has been designed to focus on “the information people want to see on their phones” and how best to display it on a mobile touch screen, says Brandon Watson, who manages WP7 development at Microsoft. That means less clicking and more scrolling, as well as pages of info that update themselves automatically.

Microsoft’s low-priced Kin phones, which were canceled after an unsuccessful launch this summer, had similar dynamic home screens designed for young social network addicts. WP7 extends that approach with its panoramic screens of information that update as fresh data becomes available. And the phones’ apps can tap into data networks in new ways: a game called Project Sunburst uses Bing Maps information to let players defend their own real-world neighborhood streets and buildings from animated attackers.

The new Windows phones have an app store, where, in addition to games, users can download a Netflix app that lets them rent and watch movies. Microsoft favors its own Silverlight technology for video and animation, but it also, Microsoft says, eventually will support Adobe’s widely used Flash, which Apple sternly refuses to support. That would mean that WP7 users could watch Web videos and play online games that are unplayable on an iPhone.

Some early reviews of Windows Phone 7 have been positive. But it’s hard to predict whether even a well-done product can catch Microsoft up to Apple and Google in the mobile market. Last year, Palm’s Pre phones failed to catch on despite their advanced operating system and attractive displays. And the complete flop of the Kin line surely stumped the marketers behind it, who had heavily researched the desires of young buyers. Microsoft’s Watson says the biggest hurdle Windows 7 phones will need to jump is the “last two feet problem”–the distance between the phone sitting on display in a store and the customer browsing for a phone.