Microsoft's Waldman sets sights on Palm, cell phone makers

Waldman was appointed head of the devices group in January, after three years in Microsoft's Mac division, where he oversaw the development of Mac versions of Microsoft applications such as Office and Outlook.

But with the launch of the Pocket PC in April and the development of the next-generation, Web-enabled cell phone, code-named Stinger, Waldman argues that Microsoft is uniquely positioned to succeed in, if not dominate, the market for mobile devices.

In a recent interview, he explained to CNET News.com why the company is well-positioned to take on Palm and other market leaders.

CNET News.com: Microsoft's strategy with its PDAs (personal digital assistants) seems to be "People want to do more rather than less." At the same time, the low-end products like Palm and Handspring take up the lion's share of the market.
Waldman: All I can say is that we've sold every single one that we've been able to manufacture. And for some reason, people have been willing to pay $1,000 for (a Compaq iPaq) on eBay. So in many ways I think that we found that people are...very attracted by the features, and they're willing to pay for it.

You know, Palm has brainwashed people for so many years. They've told people, "Well, it's all the things it can do--the calendar...it's very simple and that's all you can do."

And we show these devices to people and they're just taken away. You can have rich, great color screens and you can browse the Web.

(Palm's) whole "simple" thing is so self-serving. When you think about last year, color wasn't part of simple. (They) didn't want to do color. Now all of the sudden color is included in simple because they can do a color device.

And last year it was, "Well, everything you'll want to do is in the device." Now it's..."Oh, let's add wireless."

For some reason, the definition of simple just happens to equal the capabilities they want to put in their device.

You mentioned the availability issue with the iPaq. The product has not been widely available, despite the fact that it launched in April. Now Compaq is saying it may not be fully available until the fourth quarter. What happened?
The reason the supply is short is because the manufacturers didn't build enough devices. They recognize that now, and they're rushing as fast as they can to build more devices. Of course, because of their lead times in acquiring components, now it's taking them some time to go back and correct their forecasting mistakes.

Do you think the fact that they were not making enough devices indicates a lack of full commitment to this market?
No, I don't really think it's any indication of lack of commitment. If there was any lack of commitment, it certainly would have disappeared at this point. Forecasting is an inexact science.

We certainly expected more units to be sold. We're very excited about the product itself. And I think they've gone back and now it's sort of like I think we're right.

What's the status of Stinger?
We have two different sets of software for phones. We have software for feature phones, and those are the small Internet-enabled phones that we have today that only work when they're connected to a network and a small screen. For those products, we have Microsoft Mobile Explorer, which is a microbrowser. And that's shipping on phones today in Korea and...throughout Europe.

Now with a smart phone (Stinger) we're going further and really delivering a new kind of product, combining the best of the PDA--the large screen, the processor--with local storage. So those are the things that we'll bring from the PDA world. And from the phone world, we're bringing small size, one-handed user interface, and trying to bring together the best of both worlds.

What's Microsoft's vision for all the products that you're working on--the feature phone, the smart phone, the Pocket PC and so on. What do you see as the role for each one going forward?
When we went around and spoke to customers about what sort of device they wanted, we got so many different answers that I think it was pretty clear that the right answer was that there was no right answer. The kind of devices that people would want would depend on their personal preferences and what they needed to do. There would probably be geographic and cultural issues as well.

So there are some people who are very, very voice-centric, and that's focused on making voice calls and maybe they need to do a little bit of data, but they really want to optimize for voice. And for them, the feature phone is ideal because it's something that's very, very small.

At the other end of the spectrum, you have the PDA. The PDA has a large screen, and it's a lot easier to enter information. Voice will certainly be integrated in that sort of a device. On the other hand, you kind of look silly holding it up to your ear and talking into it.

And some people say, "Well, you know what, I don't want to compromise. I want to have a feature phone for data and a feature phone for voice and a PDA for data--and they'll talk to each other via Bluetooth."

So are the Stinger phones positioned to compete with the phones that are the product of the Symbian alliance (made up of Nokia, Ericsson and Motorola)?
One of the unique things that I think Microsoft brings to the table in the device space is the fact that we're doing software for a wide variety of devices--the PDA, the feature phone and smart phone. And no one else in the industry is doing that.

Palm obviously is doing the PDA, and they'll be integrating voice into that. Phone.com is doing software for feature phones. Symbian is looking at both smart phones and communicators, which is their word for PDAs.

What does Microsoft see as the role that wireless will play in most people's lives? Is it going to be similar to the Internet in permeating every aspect of people's lives?
Some technologies that come out, they have the potential to change people's lives. For one thing, a lot of this gets better when we see higher bandwidth in communications.

But I used to watch "Star Trek." They would do all these really cool things, like they touched the thing and they'd talk to a person's name and wherever that person was--on the ship, etc.--it would find them and it would just work. How did that stuff work? And the show was officially set like in the 24th century. So that's the stuff that's happening like 300 years earlier here in the first decade of the 21st century.

That sort of stuff is going to happen, and that's just super exciting--communicating with others and being able to do so in better ways than we've been able to do before. Right now, to be able to walk down the street and know about when a movie time is? That would be pretty useful. Or where a restaurant is and not have to enter your Zip code--and it would work because it knows where you are.