Microsoft's Big Week
Aug 23rd 2011 1:04PM
Updated Aug 23rd 2011 1:06PM
What a week.
Last week saw some pretty major headlines from some sizable companies. Google (NAS: GOOG) kicked things off Monday with its $12.5 billion acquisition of Motorola Mobility (NYS: MMI) . Then later in the week Hewlett-Packard (NYS: HPQ) announced a fundamental shift in its business alongside its earnings announcement. Hiding behind the headlines, Microsoft's (NAS: MSFT) Windows Phone 7 actually came out as an inadvertent beneficiary to the events.
Just trust Google
I touched on this last week, but let's take it a bit deeper now that the dust has settled. Android OEMs like LG, Samsung, and HTC have all openly voiced support for "Google's commitment to defending Android and its partners." Yet behind closed doors and with PR talk aside, these "partners" have some pretty important questions to answer.
The most important question: Will Google betray us? The company has proclaimed that Motorola won't get preferential treatment, but it will need to demonstrate this commitment to the openness of the platform. Google will have to tread lightly as the OEM partners-turned-competitors watch Big G's moves with bated breath.
In the meantime, it could be a strategic and costly error to disregard this notion altogether and not have a backup plan. There's no reason to dump Android prematurely, but it never hurts to have a lifeboat just in case things turn sour. Currently, Samsung makes 28 Android phones compared with only one Windows Phone 7 device. HTC is a little bit more diversified, offering 19 Android phones and six Windows phones, with even more on the way.
These OEMs have a lot riding on Android, maybe even too much. Even if Google remains true to its word and Android remains purely open, just the possibility of Motorola getting special treatment from its rich parent should motivate the other manufacturers to expand their Windows Phone offerings. It's a possibility that simply can't be ignored.
One of Windows Phone's biggest shortcomings is its lack of developers to provide a thriving ecosystem. That was until ...
How do you discontinue operations and optimize value at the same time?
Now that HP has given up on webOS hardware because of dismal sales and it's anyone's guess about the future of the software, Microsoft has swiftly jumped on the opportunity to win over some developers. Mr. Softy is offering free phones, tools, and training to published webOS developers who feel left out in the rain by HP's new direction.
The offer was tweeted by Microsoft's Senior Director of Windows Phone 7, Brandon Watson, last Friday and has already garnered more than 1,000 interested developers. This might prove to be a catalyst to beef up the Windows Phone ecosystem, which has failed to take off so far.
Although webOS didn't have that many developers to begin with, which contributed to the TouchPad's downfall, combining forces will still help reinforce Microsoft's ranks of developers.
What about Microkia?
Microsoft and Nokia (NYS: NOK) have been pretty cozy lately. Even if the other OEMs weren't too keen on Microkia's relationship, they're probably less fond of Googorola. Google and Motorola's combination includes some inherent conflicts of interest, unlike Microsoft and Nokia.
After one week, Windows Phone now has much more promising prospects for more manufacturing partners and app dev elopers. The last piece of the puzzle is whether there will be buyers. The operating system has a long way to go before it can make a dent in the smartphone wars, but its chances just got a whole lot better.
With recent Gartner figures showing Microsoft's smartphone market share dipping to a measly 1.6% in the second quarter from 4.9% a year ago, the battle with Android and Apple's (NAS: AAPL) iOS will be uphill -- and steep.
Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Google, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft, as well as creating a bull call spread position in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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