News

Microsoft Launches Windows Phone 8; Devices To Roll Out in Nov.

• By John K. Waters
• October 30, 2012

Microsoft put in place the last piece of its evolving Windows 8 picture Monday with the official launch of Windows Phone 8 at an event in San Francisco.

The company showcased new features of its mobile operating system, which offers the same "Live Tile" user interface as Windows 8-based desktop PCs and the new Surface tablet, the company's first-ever hardware product, both of which were launched last week.

Joe Belfiore, corporate vice president of Microsoft and head of its phone division, hosted the launch. He argued that the core technology of the smartphone "hasn't evolved in five years," and that Windows Phone 8 will offer a new "people-focused" user experience that "reinvents" the smartphone.

"The static grid of icons has been the standard on smartphones," Belfiore said. "We decided not to use that tired, old metaphor. Our way is to put people at the center of the experience."

Belfiore said that more than 120,000 apps for the new smartphone OS are currently available in Microsoft's app store. Among those are 45 of the top 50 smartphone apps, including apps for Facebook, Twitter, Angry Birds and UrbanSpoon. Belfiore drew applause when he announced that a Skype app for Windows Phone 8 devices would be available (Microsoft acquired the VoIP service last year for $8.5 billion) and cheers when he revealed that the Internet music streaming service Pandora will be available on the platform next year. Windows Phone 8 customers will get a one-year, ad-free subscription to the music service, he said.

The new mobile OS also comes with Kid's Corner, a feature designed to allow parents to limit the access their children have to the other functions of their smartphones. Actress Jessica Alba appeared in a video and onstage to promote the feature. "My phone is an extension of me, as a person," Alba said.

Microsoft is betting big on Windows 8 in all its forms, and it's a bet the company can ill afford to lose, said Ovum analyst Nick Dillon.

"The success of Windows Phone 8 is crucial to Microsoft, which has failed to make meaningful inroads with its re-designed mobile OS since its launch two years ago," Dillon said in an e-mail.

Although Microsoft dominates the PC market and leads in the connected TV market, mobile has continued to be Microsoft's "weak-spot," Dillon added.

"One of the main reasons Windows Phone has struggled is consumer acceptance," he said. "[W]hile there is very little wrong with the software, its design is significantly different from the current status quo of the 'grid of apps' user interface, and this change represents a perceived risk to potential customers. However, in the last year Microsoft has built consumer familiarity with the new design by extending it to both its Xbox console and its PC and tablet operating system, Windows 8."

According to IDC, smartphone vendors shipped 179.7 million units worldwide in the third quarter of this year, compared with 123.7 million units sold during the same period last year. The 45.3 percent year-over-year growth was slightly above IDC's forecast of 45.2 percent for the quarter. Microsoft's share of the handset system market was 3.1 percent in the April-to-June quarter, IDC has reported.

Ovum says that Microsoft's essential pitch -- that it is now offering a "unified and complete" package -- generated "increased optimism and support" among both smartphone vendors and mobile operators ahead of the Windows Phone 8 launch. Ovum expects sales of Windows Phone to grow from 4.5 percent of the smartphone market share in 2012 to 13 percent in 2017, which would place it in third place behind Apple's iOS and Android.

But the ultimate success of Windows Phone 8 is in the hands of developers, said IDC analyst Al Hilwa.

"The question is, how much traction will it have with developers," he said. "The development model has changed and that has caused lots of anxiety for the developer ecosystem. However, the key for developers and the single decision pivot for them is [the answer to the question], will there be enough devices to run my app? In other words, will I make money? What [Microsoft] has not done yet is to find a way to run phone apps on Windows or create a universal executable approach similar to iPhone. I figure that is coming in Windows 9. But, what they have now in terms of hardware and developer capability is extremely competitive with other platforms."

Microsoft plans to release the Windows 8 software development kit (SDK) on Tuesday at its Build conference, Belfiore said. The SDK, which will provide developers with all the new Windows Phone 8 APIs, as well as a full Windows Phone emulator, will be available free from Microsoft's download page.

The company is reportedly spending $1 billion on marketing Windows 8, which Ovum expects to generate greater interest in Windows Phone 8. Microsoft CEO Steve Ballmer, who appeared near the end of the launch event, promised to pull out all the stops to promote Windows 8. "I guarantee you won't be able to turn on a TV or open a magazine without seeing a Windows ad," he said.

Ballmer also promised that every available Windows phone will be on sale in all of the company's retail stores by Thanksgiving.