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Microsoft’s Big Mobile Gamble

Microsoft has missed more mobile opportunities than any other company. Microsoft had more opportunities than any other company to get on the ground floor. Windows Media Player was widely used and could have functioned as its own version of iTunes. All it needed to do was design and deploy an MP3 player. But by the time that Microsoft got on the ball, it produced a better media player at a time when Apple had already moved on to smartphones. Now Microsoft is frantically playing catchup with smartphones and tablets and its only tool is its comfortable operating system monopoly.

Windows 8 is Microsoft’s big gamble. The company is leveraging its core product and gambling on being able to use it as leverage to muscle into the mobile marketplace. It’s what Microsoft tried and failed to do with the internet by tying Internet Explorer to Windows and using it as a gateway to MSN and its own web services. That plan failed badly leaving Microsoft with only a temporary Internet Explorer monopoly. Its plan to use Windows 8 to bring app developers on board and expand its mobile presence using its desktop presence may be an even worse idea. But it might also work.

Microsoft is late to the party once again. It has to compete with Apple and Google. Apple has the hardware and Google has the web services. Microsoft isn’t all that good at either one, but it’s trying to use its enormous cash reserves to catch up. But that didn’t work before. And by cutting the Windows 8 upgrade price to 40 bucks Redmond is endangering its core business cash flow and trying to push a product that will alienate core users to try and establish itself in the mobile marketplace.

The big questions are all about product. Even if Windows 8 is another Vista, if Microsoft Surface and the Windows 8 phone catch on, it won’t matter. And if users accept Windows 8, but Microsoft’s smartphone and tablet entries are another dud, it won’t be that much worse off than it was before.

But if Windows 8 is hated by users and Microsoft Surface and the Windows 8 phone don’t make a splash, then Microsoft is truly screwed.

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