Running down the latest Zune Phone rumors

There will almost certainly be a consumer phone based on Windows Mobile 7 using the Zune interface. But that's not the whole story.

Matt Rosoff
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff.
Matt Rosoff
4 min read

Ahead of next month's Mobile World Congress in Barcelona, the rumor mill is swirling once again about Microsoft's Windows Mobile 7 operating system and a possible Zune phone based on it.

Microsoft is almost certainly working on a consumer version of Windows Mobile that uses something similar to the Zune HD interface (pictured here). But the company may also release a separate version for businesses, and perhaps a third device based on the Sidekick. Microsoft

We've been here many times before. I first wrote about a Windows Mobile phone with Zune functionality back in February 2008, and thought the company might unveil it at CES 2009. It's more than a year later, and there's still no official word from the company on Windows Mobile 7. Meanwhile, Windows Mobile has lost market share, Android is coming on strong, and Apple and RIM aren't exactly laying back. What can Microsoft possibly do to regain ground?

The latest rumors center around a couple of stories that posted Monday on WMExperts and MobileCrunch. Financial analysts are also getting into the act with their own guesses.

The WMExperts story says there will be two Windows Mobile 7 OSes, one for businesses and one for consumers.

According to the story, the business version will continue along the same lines as the current Windows Mobile OS: it will be available for a wide range of hardware, and operators and handset makers will be allowed to customize it with their own user interfaces. The consumer one, or Media Edition, will be based on the Zune HD user interface, will include gaming and multimedia functions, and will be tightly locked to particular hardware specs.

The MobileCrunch story doesn't mention two editions, but claims that Windows Mobile 7 won't be backward-compatible with prior versions, and that developers will have to rewrite their apps.

I think both stories contain a germ of truth. So back to the question: what are we going to see from Microsoft at Mobile World Congress? Here are my predictions. (I haven't been briefed, so I'm free to speculate.)

A consumer phone based on the Zune UI will be demonstrated. This consumer phone will have some sort of gaming functionality and ties to Xbox Live, and could have some really remarkable location-based applications built around the platform that the WMExperts story calls "Orion." (Imagine a mobile version of the Streetside feature in the recently introduced Bing Maps beta plus some augmented reality overlays.)

As the MobileCrunch story suggested, this phone will probably be a technical break with the past--it'll almost definitely support Silverlight--and may not be backward-compatible with earlier Windows Mobile versions and apps. This will be Microsoft's much-awaited parlay against the iPhone.

But I don't think this phone will actually start shipping until late 2010. Maybe even later.

We'll also see Microsoft demonstrate at least one business-oriented phone with Office Mobile 2010 clients (not to be confused with Office Web Apps, which are accessible from a browser, including mobile browsers). I'm not sure if this business phone OS will really be new, or will be simply another incremental update to Windows Mobile 6, as Mary Jo Foley and others have speculated. (I'm talking technically; marketing-speak is a different matter. After all, the desktop OS Windows 7 was technically an incremental update to Vista, making it more of a 6.x than a 7.)

This business phone OS will probably run older Windows Mobile apps, and will tap into the current Windows Marketplace for Mobile, introduced last fall. It might ship as soon as next fall. This will be how Microsoft strikes back against Android and continues to take on RIM.

There could be a third thing: the long-rumored "Project Pink," which reportedly grew out of Microsoft's 2008 acquisition of Sidekick maker Danger. I've heard that this device--which is sometimes referred to by the shorthand acronym PMX, for the Premium Mobile eXperiences group that created it--is different from the Windows Mobile 7 consumer phone. It's supposedly targeted at younger users and focuses on communication and social networking. It could be available as soon as this spring, giving Microsoft some lift among consumers as Windows Mobile 7 Media Edition (or whatever it ends up being called) grinds its way to completion.

Would Microsoft really release three different sets of mobile phone software simultaneously? History says yes--the company often lets multiple product teams work on similar projects, then releases them all and lets the market pick a winner. This is quite different from the tightly controlled top-down approach taken by Apple.

Could it work? I think so. Most of the world still doesn't own a smartphone, and phone users upgrade every two to three years--that's much more frequently than consumers and businesses upgrade their hardware and software. A shotgun approach would demonstrate momentum and give consumers, carriers, and handset makers a wide variety of choices. As lackluster as Microsoft's performance in mobile has been for the last few years, I wouldn't count them out until I see what's coming next.

That said, if Microsoft lets another Mobile World Congress pass with no more than another incremental update to Windows Mobile 6, then I'll have to wonder how serious they are about mobile.