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Analyst: Microsoft should exit phone business

updated 12:35 pm EST, Fri December 11, 2009

MS not seen getting the non-work space

Microsoft ought to cut its losses and drop Windows Mobile and Zune, Strategic News Service analyst and founder Mark Anderson said late Friday. He argues that, apart from the Xbox 360, the Windows developer's consumer electronics businesses have largely flopped and that it lacks a fundamental understanding of how these work. Apple, Google and most Asian companies have a far better understanding and are likely to still dominate the field.

"Phones are consumer items, and Microsoft doesn't have consumer DNA," Anderson explains to the New York Times. "Walk the halls at Microsoft and you can see it is not a place that gets consumers."

Even if Microsoft exits, though it's possible the effects of its failure to compete in home electronics will be felt in its core Windows business. If Windows Mobile fails to hold a significant amount of market share, the strength of Android and iPhone apps is expected to "move upstream" and influence what customers want elsewhere.

For its part, Microsoft has admitted it needs drastic steps and has lately tackled the interface weaknesses that have plagued its handheld devices. Besides releasing the Zune HD, it plans to launch Windows Mobile 7 in the second half of 2010 with a multi-touch interface and some of the Zune HD's media components.

by MacNN Staff



  1. malax

    Joined: Dec 1969


    true but harsh

    I like this statement: "Apple, Google and most Asian companies have a far better understanding and are likely to still dominate the field."

    "Most Asian companies." So the average dog grooming business or car repair shop in Asia is better at this stuff than Microsoft? Yeah, ok. :-)

  1. VHMP01

    Joined: Dec 1969


    Nothing Really

    Just crapping on. Windows Mobile took over at their game above Palm years back, problem is the stayed without development for a while, but they have done it before, could recover soon, and have the means to do it.

  1. lkrupp

    Joined: Dec 1969



    I was reading another article this morning that basically stated that Office is all Microsoft has left that generates large amounts of cash. The analyst then goes on to say that even Office is vulnerable because it is so mature and feature laden that Microsoft can no longer differentiate it from older versions. Eighty percent of businesses use either Office 2003 or 2007. Most people don't even begin to use most of the features available. So, the analyst reasons, how is MS going to get people to buy Office 2010?

    I think we really are seeing the beginning of the end. No, it won't happen even in the next ten years but the decline has started. They can't seem to do anything right these days. We'll know this is real when Ballmer gets shown the door.

  1. darkelf

    Joined: Dec 1969


    hey, ballmer...

    retirement, retirement, retirement, retirement,

  1. slider

    Joined: Dec 1969


    Will Never Happen

    At least not for the mobile phone market, it's too much of, not only a growth market, but a game changer, "the next big thing", if you will. And M$ never allows a door to be closed, crushed foot or not.

  1. iphonerulez

    Joined: Dec 1969


    Microsoft could just drop WinMo and

    buy out Palm and give the Palm division free reign and enough cash to do heavy R&D. I think that WinMo is really dying and possibly dead and by the time WinMo 7 is out, most of the companies that had WinMo devices will be long gone to Android. WinMo 7 might be really good, but Microsoft will likely have to start from a zero user base. Microsoft should give advance notice if they decide to discontinue the WinMo platform so that the remaining cellphone companies that use WinMo will have time to look elsewhere.

    The Zune HD is probably a nice device, but except for the hardware there isn't really much to grab consumers. If Microsoft wants to keep throwing money at it, good for them but I don't think they're going to see much of a cash return from it. I don't think Microsoft wants to admit defeat so they'll just keep plugging along hoping that it'll steal some sales from Apple's iPod. It isn't like they're being bankrupted and they can keep the Zune in production just as Apple is keeping AppleTV.

  1. nat

    Joined: Dec 1969


    out of curiosity

    iphonerulez, i wonder if AppleTV is losing money. anyone know? apple has traditionally done what most companies do, they dump products that aren't profitable - cube comes to mind -
    unlike ms who is more than willing to dump massive fortunes on keeping products and services out there.

  1. Flying Meat

    Joined: Dec 1969


    As we all know

    You must listen to whatever an analyst says and act according to their views.

    Oh, wait...

  1. shawnde

    Joined: Dec 1969


    I disagree with the "analyst"

    I think Microsoft should continue to pour their "slush fund" into these dumb a$$ projects .... this is the best way to spend that money. I wouldn't want them to spend that money on R&D for their successful products, because then, we run the risk of those products actually improving, which is not what we want. Most people on this forum prefer Microsoft products to suck all across the board; that way, they'll gradually die a slow death.

  1. rickcj

    Joined: Dec 1969


    Yeah ..

    We have to keep Microsoft around, if for no other reason, just for the good laughs. I think I'll fire up the monkey boy video ...

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