Microsoft + Danger = iPhone competitor
No, they haven't announced it, but yesterday's reorganization makes it pretty clear.
How long have we been reading these Zune Phone rumors? Microsoft still hasn't officially announced any plans to build an iPhone, but yesterday's corporate reorganization clearly points that way.
Microsoft has reason to be worried. After about five years of plugging away with Windows Mobile, Microsoft's managed to create a reasonable competitor to Research in Motion for e-mail-enabled phones. But that's about it. In contrast, Apple launched the iPhone in June 2007 in the U.S. and by Q4, it was already the number-two provider of smart phone (or "converged device") OSs in the U.S., with 28 percent market share--ahead of Microsoft's 21 percent and behind RIM's 41 percent. Worldwide, despite an October European launch and a smaller global footprint than its competitors, Apple managed to reach 7 percent share worldwide, just behind RIM's 11 percent and Microsoft's 12 percent , although all of these folks are bit players compared with Symbian's 65 percent share. (All numbers courtesy of a February 2008 report by Canalys.)
Microsoft's acquisition of Danger has already been the subject of much speculation on CNET and elsewhere, so I won't spend too much time pondering how long it will be until Microsoft kills the Sidekick and its Java-based OS (as long as it takes to build a Windows-based version) or guessing about the acquisition price ($500 million sounds high, but possible given the premiums Microsoft has been offering lately).
The interesting part is buried in yesterday's press release announcing the latest Microsoft reorg: the company has appointed Roz Ho to lead the Danger integration. Ho has spent the last few months in an unspecified "special projects" role under J Allard, Mr. Zune himself. But before that, Ho was the longtime leader of Microsoft's Mac Business Unit, which means there's probably no Microsoft executive more familiar with Apple. Connect the dots and they spell iPhone.
So how will Microsoft go about it? My guess is they'll whip out some sort of Zune client software for the current iteration of Windows Mobile as a stopgap measure, while simultaneously building a completely new device that combines a consumer-oriented UI, mobile services, and an associated hardware reference design. They will probably brand it as a Microsoft product (like Zune and Xbox), instead of merely licensing the software (Windows Mobile) or software+reference design (the short-lived Portable Media Centers). Sidekick's manufacturing partners, Sharp and Motorola, might be involved. Timeline: probably not until 2009, although the Windows Mobile Zune client could come out this year.