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Analyst: Zune phone "not likely"

updated 03:40 pm EDT, Fri July 25, 2008

Jupiter on Zune Phone

Any attempt by Microsoft to release a Zune-branded phone would clash with the very fundamentals of Microsoft's mobile operating system business and with the partners it depends on to succeed, according to early observations by Jupiter Research analyst Michael Gartenberg. He warns that the frustrations with success in the market that led to the creation of the Zune media player don't exist with Windows Mobile. While companies selling Windows Media-compatible players and the relevant protect music format had largely struggled before the Zune launched in November 2006, Windows Mobile is still considered successful with 20 million copies sold for various devices in the company's fiscal 2008.

"Zune worked to some extent since the technology Microsoft was licensing wasn't getting them anywhere," Gartenberg says, referring to the PlaysForSure program for protected music. "The phone is different. [Windows Mobile] is a core platform and OS. No one has ever been successful licensing technology platforms to others and then competing with a device of their own."

Apple and Palm are cited as examples of this, with Apple having seen substantial losses while it licensed out the desktop Mac OS to third parties in the mid 1990s only to regain its footing after canceling the program. Palm in turn licensed out the PalmOS to Japan-based ACCESS but has had little success encouraging the spread of the software beyond its own phones.

Many Windows Mobile partners would also likely revolt, the analyst suggests, particularly if Microsoft decided to follow the same one-carrier strategy as Apple did with the initial iPhone. The move would force Microsoft to compete against close dependents and also create conflicts with licensees that would see Microsoft favoring certain providers and services over others. The company is unlikely to see much success should it follow Nokia's route and sell a high-end phone only as an unlocked model, according to the researcher.

Apple for its part has allowed a multi-carrier strategy for the iPhone 3G and in multiple countries offers the device through two or three carriers in non-exclusive agreements.

Gartenberg however suggests that any theoretical Microsoft change would most likely to work the Zune's media playback features into an update to Windows Mobile and let third-party manufacturers develop suitable phones if they so choose. Windows Mobile 7 is the next earliest opportunity for this and is planned for a launch in the second half of 2009.

by MacNN Staff



  1. chefpastry

    Joined: Dec 1969


    Balmer's unpredictable

    Don't give Balmer too much credit. He's not the brightest guy in the world. He may very well shoot himself in the foot.

  1. Monde

    Joined: Dec 1969


    Ballmer wants it badddd

    Ballmer wants a apple-like success so bad, he can taste it. Even with MS's financial success, it has never been due to a great product or innovation, but rather, intellectual theft or public ignorance. The two mainstays of the MS universe.

    I agree don't underestimate his stupidity, knowing squat about technology and serving the end user I could easily see MS trying to inflict the zune phone on the public. Too bad, this time, the public is better informed.

    Still I don't want Ballmer to go. He is almost an Apple dream-CEO insofar as the competition is concerned.

  1. Flying Meat

    Joined: Dec 1969


    Two faced

    Not that no one else does this, but how does developing a Zune phone jibe with the recently MS stated goal of focusing on it's core business (presumably server and desktop OS, and applications there in)?
    It doesn't as far as "I" can tell.

  1. dwoodruff

    Joined: Dec 1969



    Imagine having a phone that nobody else would ever own... you could be exclusive, albeit unintentionally

  1. slider

    Joined: Dec 1969



    M$ saying they are going to do a thing and then doing it are two completely different things. First the idea of Apple-like experience is fine, but M$ would need to do some serious house cleaning. My impression is these some old blood there that wouldn't be very easy to displace. As for the Zune Phone, it's the same old story with M$, someone comes out with a product that his hugely successful and M$ has to jump on it b/c it might just be the "thing" that knocks them out of the game. I'm all for being diversified, but doesn't it make more sense to product a couple of good product and just be the best at that? M$ is starting to slip, and it's their own fault, they can't get out of their own way.

  1. 010111

    Joined: Dec 1969



    "Any attempt by Microsoft to release a Zune-branded phone would clash with the very fundamentals of Microsoft's mobile operating system business and with the partners it depends on to succeed"

    ... and that differs from what they did to their PlaysForSure partners how exactly? seem to recall them getting shafted by the Zune and Zune marketplace.

    Microsoft s******* over "partners" is hardly a rare occurrence.

  1. Constable Odo

    Joined: Dec 1969


    Where is my zPhone?

    Running WinMo 7 with a spherical interface. The only round smartphone in the entire world. I'll take two.

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