Microsoft, Into the Light: The Unofficial Windows Phone 7 StrategyS

Microsoft's last decade began dark. They seemed to screw everything up. Then, over 10 years, they made Xbox, Zune, and a better Windows. And if the reborn Windows Phone can amplify everything, they've got a shot at being the greatest.

Ten years is a long time. During that period, things got harder, and easier, for Microsoft. While Redmond was plotting a comeback, gadgets got to be a lot more than just hardware. The internet and social bloomed. The world that was in increasing need of software expertise. Just few companies—including Microsoft—had shoulders broad enough to give us the entire setup, fully integrated. That is, everything from email services to mobile hardware to desktop operating systems and maybe even movies, video games and music. Things Redmond always had potential for, but failed to deliver on in a cohesive way.

Today, phone makers like Palm, Sony Ericsson and Nokia are less threatening simply because phones need to work with everything else. Only Apple, Google and Sony have similar advantages, although none in such strong proportion as Microsoft. Theoretically.

But 10 years wasn't a coincidence of round timing, or a target. It's taken this long for Microsoft to get its shit together.

See: infighting. The examples here and here tell of instances where one division (Office) was able to basically tank another division (Tablet PC) because the former refused to make a version of its product for the latter. One group develops a great technology like ClearType, only to have it shat on and ignored for a decade before it makes it to market in products developed by other groups.

Eventually, sense prevailed. Windows Mobile was absorbed into the Entertainment & Devices division, the same division that brought you the Xbox and Zune. Why's this notable? Because those two devices are examples of how teams at Microsoft insulated themselves from the rest of the company and made good gadgets we love, period. This is not super common at Redmond. And the move gave Windows Phone 7 the advantages of that group's proven engineers, designers and leaders like Joe Belfiore.

In an interview this week, Joe Belfiore, head of the Windows Phone team, told us that the Windows Phone 7 design, and not just the features, was taken from the best of what Microsoft has been doing. He said they looked over their recent successes and found proven tactics. "For the problems you want to solve in a phone, this approach we took in Zune HD makes sense, so let's use it here," he said. "This approach that we used in Media Center or on a web property makes sense, so let's use it here."

But the future of E&D wasn't about individual gadgets. The division saw a path a few years ago, when J Allard said that "Xbox, Zune and future products will merge."

Windows Phone 7 was the focal point of that vision.

Now Microsoft has all the pieces in place. Windows 7 is good. Media Center is good. Zune is good. Xbox is amazing. Microsoft has so many servers, and web services like Hotmail and Bing. And Windows Phone 7 looks really impressive. Not many companies have this much going for them. But how all these different products come together could be defined by infighting or true coordination—both of which are possible at Microsoft—and will make things utterly amazing or do nothing to elevate Microsoft at all. The stage is set for a tremendous success, but the details are critical. Lethal, even. Here's what we'd love—and what we'd hate—to see.

Microsoft, Into the Light: The Unofficial Windows Phone 7 StrategyS

Zune

Zune is maybe the easiest thing to integrate with Windows Phone. And to call Windows Phone 7 a Zune Phone wouldn't be too far off. The UI borrows heavily from Zune, and many of the team responsible for WP7 previously worked on Zune. Having the entire Zune player on the phone is much like what Apple did with the iPod app on the iPhone, including buying songs over the network. And it's almost exactly like what Xbox has with an integrated Zune marketplace. Zune is basically the Microsoft brand for media. But Zune has some potential edges over Apple and Google's offerings.

The reasons everyone was begging Microsoft to make a Zune Phone were the social aspect and the Zune Pass, which gets you unlimited music (+10 to keep) for the cost of a CD a month. (Something Apple can't match in an iPod but something that people would hardly go out of their way to buy a new Zune for.) In 2010, when carrying around a smartphone and a music player no longer makes sense, it was beyond time for Microsoft to make a phone with its music suite. All they need to do is add in a Pandora-esque streaming factor and they're two steps ahead of everyone else.

Back to the social: Windows Phone 7 already got the Xbox Live/Zune Social friends list in there. If they can tie in this interface—a sturdy enough base for social networking as I've ever seen—and add on location features and status updates, they can really go far. You can already see what your friends are listening to on the desktop Zune player, but being able to see what your friends (or even the people around you) are listening to in real time, then streaming that music over 3G from the Zune servers, that would be a killer social music experience.

There are also quite a few ways Microsoft can screw up the plan. They can make like Google Buzz and shoehorn in too much, too fast, with too little concern for privacy. They can kill off Zune Pass and eliminate the one killer aspect of Zune that differentiates itself from other music competitors. And they can fail to see that hooking the social aspect into their phones is the way every service is progressing now. Fairly easy things to avoid, since Zune has been planned as a media brand and service inside of Xbox for quite some time.

One more very real danger is that development of Zune continues to be separate from the Xbox experience the way Media Center is. Opening the Media Center is jarring, because it subscribes to a different design language and has to be run discreetly. Zune integration needs to avoid this cookie cutter UI approach, while retaining some Zune language and identity.

Here's an afterthought, in consideration of the Zune brand: They could take Windows Phone 7, strip out the phone parts, and call the new hardware a Zune HD2. Everyone already knows how well the iPod Touch is selling. While it forces users to carry a media player and a phone around, there's a market for a device that can do everything but call, especially when carrier contracts and company phones make choosing a phone more difficult. Release the Zune HD2 as a phone-free WP7 device, and you've got millions more potential installs for all those apps, games and content. In other words, Windows Phone 7 would be helping Zune grow into something better than a Zune.

What we want to see:
• Improved Zune service for over-the-air music streaming, like Pandora, if you have a Zune pass
• A base for music social networking, much like how the Zune Social works on the desktop, but anywhere in the world
• Audio recognition so you can hold the phone up to a speaker, grab the song off the Zune network and download it to your phone instantly (with or without Zune pass)
• Wireless music streaming to another Windows Phone, so you could both listen to the same track at the same time

What we don't want to see:
• A bunch of permission lockdowns that makes music streaming and sharing impossible; not because it's not technologically feasible, but because record companies make a face at you sharing music ephemerally (none of it will be stored or saved) among your friends
• The elimination of Zune Pass. Seriously, it's one of the biggest draws of Zune

Microsoft, Into the Light: The Unofficial Windows Phone 7 StrategyS

Xbox

Ahhh, Xbox Live. There's no logical reason why it took 2010 for any of the major console makers or phone makers to get an official console onto a phone. Sony has both a phone division and a gaming division, and Nintendo could have easily partnered with many phone makers for a DS that makes calls. But nope, Xbox Live in WP7 is set to be the first. But it won't be without competition.

Apple's App Store is the current winner in the space, and with good reason: They've put out the best product with the largest audience that's the friendliest to developers. Microsoft can easily overcome this. They've got the games industry behind them. Their development structure is familiar to any studio that's been working on Xbox 360 or PC games—basically all of them—and they have solid relationships with most developers. You've heard developers say that porting games to and from the Xbox or the PC is easy after they've done one. Using the same tools will hopefully make things easier on people making games for WP7. Not super easy, but easier.

You can see the potential here. As Mark said, there are a couple options Microsoft can take. They can make PSP/DS/iPhone level games, they can make games that are companion mini games to the full console versions that either interact or influence your experience there, or they can make straight ports of lighter games on Xbox Arcade that don't require all of the Xbox 360's power. All of these are enticing, and the latter two are more promising than current mobile activity. When we mentioned some of these scenarios to Belfiore, he said, "All the kinds of things that you'd expect, generally, we'll be bringing to bear on the Xbox Live experience." Vague as the answer was, it gives gamers some hope that Microsoft isn't going to leave it at just using the name and a few Xbox Live features, but many of them.

Despite the potential, Microsoft's fighting an uphill battle on roller skates. They're two years late to a mobile games party that's already been defined by a competitor—a competitor that has a product with a three-year headstart. But the fact that Windows Phone will be the first device that carries the name of the big three console makers will mean a lot to regular people. Would a young gamer rather get a portable Xbox phone, when he's already intimately familiar with the Mass Effects and the Dead Risings, or would he rather get something made by Apple? There's also a lot of potential here for a standalone Xbox portable that isn't a phone, much like the Zune-branded Windows Phone 7 device that isn't a phone.

Bottom line, though, is if they don't go 100% all out, grab every one of their console partners and entice them into making quality exclusive games for the Windows Phone, the Xbox name will be worth nothing. People are expecting a level of mobile gaming that hasn't been seen before, not just more iPhone games. Plus, Xbox Live is a network, so they better capitalize on the fact that the infrastructure for multiplayer gaming is already there.

The only real competitor here is if Sony somehow manages to disentangle its various division heads from its various division asses and come out with a branded Sony PlayStation Portable phone. Which we doubt will ever happen.

(*We acknowledge, snidely, the failure of NGage as a hardware and then software platform.)

What we want to see:
• Heavy studio support that bring DS/PSP-quality games to the phone, not just iPhone-level stuff
• Multiplayer games that take advantage of Xbox Live, but accommodate for the lagginess inherent to phones
• Indie gaming thriving thanks to pro-level tools, but able to pull it off without the big budgets of major publishers
• Location-aware gaming that knows where you are, and lets you collect bonuses by visiting places around town (or different cities). Imagine having unique weapons on your console games because you did a sync at New York or SF or Albuquerque
• Multiplayer augmented reality games where you could communicate and interact with other Windows Phones
• An actual controller add-on accessory that gives the option for console-style controls, so you're not stuck with the touchscreen alone

What we don't want to see:
• A bunch of junk games that make it difficult to find the quality ones (the iPhone App Store effect)
Only cheap games, instead of quality games that take time and effort to develop
• Games that are just lazy ports of games on other devices, not taking advantage of the touchscreen or any of the unique Windows Phone abilities

Microsoft, Into the Light: The Unofficial Windows Phone 7 Strategy

The Information Superhighway

Every smartphone has been trying to leapfrog previous smartphones in order to claim the crown of "most connected phone." There was Palm, with its fetching and integration of Facebook contacts, Moto's BLUR, which has Twitter and Facebook directly integrated into its top-of-the-phone experience, and now Windows Phone, which pulls data from your email accounts, social networks and work accounts (Microsoft can't quit you, Enterprise customers) and displays it in the tiles on your home screen. This data-centric design has both out-Appled Apple, and could win the connectedness war.

But it's not as far as Microsoft can go. There are a lot of semi-neglected features that the tech-savvy have ditched Microsoft and gone to Google for. Their Windows Live services actually have apps like Photos, Mail (Hotmail), Groups, Spaces (a Facebook-ish site) and SkyDrive (an online storage hub). Nobody really uses these because they're not connected to anything. If Microsoft can bundle Windows Live tightly into the phone and give people an integrated experience—something Google is kicking total ass with on Android, and Apple is only kinda doing with MobileMe—that's one more check in the "win" column.

Being able to check Twitter from your phone isn't enough; every phone out there can do that. Microsoft needs to actually throw its weight around and make its services talk to each other. Imagine a scenario where you're playing an Xbox Live game on your Windows Phone and you do something cool, like getting an achievement (oh yes, why not Achievements for games on there too?). Your phone automatically grabs your location, Tweets your accomplishment, inserts it into your Windows Live Spaces blog, grabs a screenshot for your Windows Live Photos and sets it as your status in Windows Live (MSN) Chat. Pretty cool, no?

This is the type of thing that has taken Microsoft so long to do, for some bureaucratic reason that only division heads can fathom. Why can Google pump out stuff like Buzz (and even enact privacy fixes quickly), but Microsoft can't even get its various online divisions to talk to each other to plan out ideas? Google is Microsoft's primary competitor in the online space here, and if Microsoft doesn't get it together and understand that much of what people need from traditional apps is moving into internet apps, Windows Phone will be sad indeed.

Time will tell how well the mobile version of Internet Explorer—the one stuck somewhere between IE7 and IE8—will perform compared to the WebKit ones used by the other major smartphone OSes. That might be one instance where Microsoft should go external instead of eating its own dog food. Indeed, maybe all the Windows Live services are moot, and there's no way, in the end, to out-Google Google. But I can bet Steve Ballmer will eat his own children before he starts integrating a bunch of Google apps onto his phones.

What we want to see:
• Bundled services, like Google's online apps, in the phone (and on the desktop). It doesn't matter if it's Microsoft's services or Google's services, frankly
• A browser that doesn't suck, which might mean Microsoft needs to ditch their portable IE and go with WebKit, like Android, iPhone or Pre
• The ability to pull all kinds of data from various sources to place on the home screen, like RSS feeds, instant messages, your Xbox Live friends list, the current status of your torrent downloads on your desktop and whatever other information you're interested in

What we don't want to see:
• All this information slowing the phone down. The BLUR interface on Moto's phones is useful, but it's also slow, so a hardware balance must be struck
• All this information eating up battery life. Keeping a constant 3G connection to fetch tweets, stats, emails and so on is rough on the battery, and we would rather have a phone that can last an entire day's use

Windows

The lessons learned from the Vista to Win 7 transition are applied neatly to Windows Phone as well. Instead of presenting users too many options at once, slowing everything down, Windows Phone repackages it into an interface that seems faster and streamlined, but is still powerful at its core.

It's still unclear how much multitasking—the core functionality of Windows and part of the reason why it's called Windows—will make it into Windows Phone. Fine. If you can't find a way to manage full multitasking, like Android or Pre, you should at least be able to do some stuff. Like playing Pandora in the background while you answer emails, or being able to switch back and forth between a web page, a word document and email without having to reload each every time you do so.

But also, even with all the cloud syncing, we need a form of desktop syncing that's as good, if not better, than Apple's iTunes solution. Hooking up photos, music and videos is already taken care of by the Zune suite, but contacts, calendar, social networking account info, emails and more should all be handled as well.

What we want to see:
• Better syncing between Windows and Windows Phone
• Mac support
• Great cloud sync for both mobile and Windows, like My Phone, but with everything (excluding, say, heavy stuff like videos)
• Tight integration, where you can access your text messages, voicemails and call logs from your desktop (somewhat like Google Voice)

What we don't want to see:
• Lousy ports of Windows apps without regard for how they work on the phone
• Cloud-only sync; even though we know cloud is important, we never want Microsoft to ditch the ability to sync stuff from a desktop
• A bunch of manufacturers trying to undercut each other with low-end hardware. One of the big things about Windows is that you can shove it on high-end hardware and low-end hardware and it would still be called Windows. Nobody wants to have a slow-ass phone experience, like Windows Mobile was subject to, because all the manufacturers were too cheap to put good hardware in there. So no, not Windows like this

Microsoft, Into the Light: The Unofficial Windows Phone 7 StrategyS

Office

There wasn't much shown about the intricacies of Office other than it's there, and it works, so we're left wondering how Microsoft will integrate such a simplified OS with the necessary complexities of Word and PowerPoint and Excel. Will your finger be a fleshy Theseus, deftly winding its way through Labyrinthian spreadsheets while you're standing in line at the post office, with mobile Clippy being your Ariadne? Or will the small screen size and lack of sufficient thought into how a bigass productivity app will work form the minotaur that craps on your presentation?

Either way, we've already seen how Microsoft has ported Office onto Windows Mobile before, and it wasn't pretty. If whoever's in charge of the Office division can finally see that Office doing well on any platform is great for all platforms, maybe then we'll get a good implementation on the phone. If Steve Jobs can scare the iWork team into making a pretty-damn-good touch-version of iWork for the iPad, how can a touch Office not be doable at Microsoft? If it can't be done, Ballmer just isn't doing his job.

The main competitor here is, once again, Google. Google Docs is quite decent for normal people to use on Android. Maybe making Office's online component phone-friendly is the way MS needs to go, rather than porting a heavy app into a less heavy one. Either way, if Microsoft wants to be the phone for businessdudes, they'll have to think this part through.

The Microsoft Future We'd Like

Although Microsoft didn't go far enough in the direction we like and actually build its own hardware, they are setting strict minimum requirements and limitations on who can build a Windows Phone and who can't. Belfiore told us, "In this release, we picked the things that mattered most to the user experience, and we require them. So in this release capacitive touch is required." This is better than before—making sure the touch-performance is constant throughout the various models is great—and we can see them being more like Google's current Android lineup (a couple of really good phones, plus some so-so ones) than previous Windows Mobile versions. Like Google, Microsoft is taking an active step in working with partners. Belfiore says they are bringing "in a lot of the hardware that our partners are building, and doing extensive testing on the hardware ourselves."

By insulating itself from the politics of Microsoft and not having to be subservient to any one division, Windows Phone found it possible to integrate the best from nearly all divisions. But it's not enough. The promise of Zune on Windows Phone is great, and the promise of Xbox Live is great, and the promise of online connectivity is great—we just need to see how they execute. If the Windows Phone team goes at this 100%, we'll have a phone that—in its base experience—can beat any other smartphone out there. And for the first time, maybe ever, Microsoft isn't just selling a lot of shit—they've got a chance at winning over our pockets, desktops and living rooms by earning it.

Read more of our ongoing Windows Phone 7 coverage. Here are the highlights:
Windows Phone 7: Everything Is Different Now
Windows Phone 7 Hands-On Video and Photos
Windows Phone 7 Apps: What We Know, What We Don't Know
Windows Phone 7 Interface: Microsoft Has Out-Appled Apple