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Charlie Kindel, a former Windows Phone GM, wrote a post explaining the reasons he believed were behind Windows Phone 7’s continued struggles in sales even though – according to him – it was a superior platform to Google’s mobile OS. He says it all comes down to control – and that is what has limited WP7’s sales potential to date.

Kindel’s reasoning

Kindel explains that there are four primary sides of the mobile market – the users, the OS providers, the device manufacturers and the mobile carriers. He explains that they all own and control different parts of the market, while in conflict in other parts. He explains that where Google gives the device manufacturer and the carrier control – leading to more Android devices being made and carrier retail sales people punting Android phones – Microsoft restricts this control, meaning manufacturers and carriers support it less. In turn users do not have the devices marketed to them by the carriers, hence Microsoft’s week sales position.

What this means

Charlie Kindel explains that this means that Windows Phone 7 is able to provide a superior end user experience, though it comes with a price. ‘This is why, despite being a superior PRODUCT to Android, Windows Phone has not sold as well.  Spending marketing dollars on advertising Android devices is and easy decision for the carriers. Pushing RSPs to push Android is easy,’ he writes.

In the long run, he believes this model – putting users first – could trump over Google’s ‘do what you will approach’, which he says has resulted in the platform becoming extremely fragmented.

A comeback unlikely?

Tech writer turned venture capitalist MG Siegler says that, even if WP7 is marginally better than Android or iOS, it’s not enough, especially given how late to market it is. ‘Two to three years in the hole, the only way Windows Phone can win the market now is to make a product that is leaps and bounds better than what’s out there. They need something that’s an iPhone-in-2007 type product. The product they have, while good, isn’t that,’ Siegler writes.

The Windows Phone 7 sales problem has been on my mind for some time now. The mobile OS platform is, in my view, at least on par with Google’s Android, if not superior. What’s for certain is Android OS isn’t manifold better warranting the major sales gap between the two platforms. So what then is Microsoft to do to mitigate their current sales problem?

Kindel does a good job outlining how, in simple terms, the mobile devices market is structured. His argument for Windows Phone 7 sales issues is well articulated, but the proactive steps the WP7 team need to take to kick start sales outside of throwing money at the problem and waiting is not explained at all.

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Research in Motion’s market cap has dropped to just $6.8 billion, which is less than what Microsoft paid for Skype when it purchased the VoIP company for $8.5 billion this year. As the pressure mounts upon the company, the CEOs have cut their salaries to almost nothing.

CEOs take a knock

Research In Motion’s co-CEOs, Mike Lazaridis and Jim Balsillie, cut their salaries to just $1 per year during the company’s most recent earnings call. Even with that cut, the press around RIM’s leaders ranges from scepticism to downright cynicism. Reporting on the salary cut, CNet’s Larry Dignan writes: ‘Nevertheless, RIM carries on with its current management. Co-CEOs James Balsillie and Mike Lazaridis are taking $1 in salary a year. This token gesture inspires instant cynicism. The two may only be worth $1 a year at this point. You get what you pay for.’

Investors making suggestions

Activist investors Jaguar Financial, who for the last few months have been calling for a shakeup at Research In Motion, have also weighed in, recommending that the company ditch its handset business entirely and rather monetize its high-margin services business. ‘Jaguar believes that the road map to value restoration lies in a sale of RIM whether as a whole or in separate parts,’ Reuters reports.

The problem with this thinking, of course, is Research In Motion’s entire service business is built atop sales of its BlackBerry handsets – in many ways they are one and the same – the one exists to augment the other.

Now what?

The fact that Microsoft paid more for Skype than Research In Motion is currently valued at is very symbolic. 2011 has been a torrid year for the Canadian smartphone company, and if 2012 gets off to a similar start, the long-term viability of Research In Motion will be called into question.

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While naysayers claim – seemingly legitimately – that smartphone sales are eating into those of handheld consoles, it’s certainly inconclusive that social gaming is upending the home console market if the Xbox’s recent achievement is anything to go by. Microsoft announced that their popular home console had its best sales week ever, moving nearly one million units in Black Friday week in the US.

Microsoft announced the news on its official blog, writing: ‘Entering the seventh year of its lifecycle, Xbox 360 just closed the biggest sales week in the history of the hit digital entertainment system, selling more than 960,000 consoles in the U.S. during the week of Black Friday.’ Colossal.

Black Friday mania

What’s even more incredible than selling just shy of one million consoles is the number of consoles Microsoft sold over the 24-hour period spanning Black Friday. Get this – the company moved an incredible 800,000 units in the US in just 24 hours. Black Friday is characterized by heavy discounts, with US shoppers flocking to stores in their millions, often leading to lengthy queues, jams and, occasionally, strange incidents. A woman in the US was recently arrested for pepper spraying other shoppers just to get her hands on an Xbox 360 ahead of other shoppers. Really.

Kinect joins in on the fun

Not only did the Xbox 360 home console sell well, Microsoft was also selling Kinect sensors and Kinect bundles hand over fist. The company announced that they had sold more than 750,000 Kinect devices – bundled or otherwise – in the same week.

In short, Microsoft’s Xbox business is soaring while Nintendo’s console business sputters and Sony’s business hums along. The threat games like FarmVille and the like pose may be overstated – though legitimate – but for now, Microsoft will just bask in its victory.

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Comedian Louis C.K. told Forbes that the next technology pioneer would be female. While his reasoning is typical C.K. comedy, there is plenty of merit to the sentiment, and to be frank, it would be good for the technology industry.

Totally be a chick

Speaking to Fast Company’s Nancy Miller, Louis C.K. explained that the world is transforming, and that women have more opportunities than ever before, even though there are still challenges. He says: ‘The next Steve Jobs will totally be a chick, because girls are No. 2 – and No. 2 always wins in America. Apple was a No. 2 company for years, and Apple embodies a lot of what have been defined as feminine traits: an emphasis on intuitive design, intellect, a strong sense of creativity, and that striving to always make the greatest version of something.’

Men are like Microsoft

He prefaced that statement by saying that the world loves underdogs, and women are the underdog in this situation. Unsurprisingly, comedian Louis C.K. didn’t think as highly of men – and he clearly doesn’t think highly of the house Bill Gates built, neither. He says: ‘Traditionally, men are more like Microsoft, where they’ll just make a fake version of what that chick made, then beat the shit out of her and try to intimidate everybody into using their product.’ Ouch.

It’s time

Ironically, C.K.’s sentiment comes at a time when a massive debate has broken out in Silicon Valley – the epicentre of the tech world – about whether the Valley is a pure meritocracy or if minorities have a harder time making it there than the usual suspects, namely white males. Having said that, though, the CEO of HP and the CEO of IBM are both females, and these are two of the biggest technology companies in the world. Perhaps comedian Louis C.K. is not all that prophetic, and is just calling a trend that’s already in motion.

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The Nokia Windows Phone 7 handsets that are under pressure to save both Nokia’s handset business and Microsoft’s mobile OS platform have gotten off to a slow start, if a recent report by an analyst is anything to go by. Pacific Crest analyst James Faucette has slashed his estimations of how many of the handsets could sell by 75 per cent.

A quarter of what was initially expected

In a note to clients, Faucette writes that [via Forbes]: ‘We believe that shipments of Nokia’s new Windows Phone 7 products have been lower than we had previously anticipated.’ He continued, saying: ‘We had expected that the company could ship as many as 2 million units into the six targeted markets for the holidays; however, we now believe that those shipments are likely to be less than 1 million for the quarter.’

Faucette believes that Nokia’s handsets could sell as few as 500,000 units, a mere 25 per cent of the total initially predicted.

Some perspective

On one level, the poor performance predicted by Pacific Crest analyst James Faucette could be seen as cause for concern for Nokia, and on another level, it could be nothing. Remember, the two million units figure was his estimate, and not Nokia’s. What’s more the Nokia Windows Phone 7 handsets are new to market and represent a comeback for the Finnish mobile phones giant – and something of an ‘arrival’ for Microsoft’s WP7 mobile OS – and so slow sales in the early going aren’t necessarily a bad thing.

Nevertheless, you can bet that both Microsoft and Nokia are keeping a nervous eye on Nokia Windows Phone 7 sales. Both companies need this to come off, and the longer it takes to gain momentum, the more anxious both parties will be, justified or unjustified.

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Windows Phone 7 has stuttered, and some believe that iOS and, in particular, Android are too far off in the distance for Microsoft’s mobile OS platform to catch up. Some disagree, and think that the struggling mobile OS platform may still have a chance yet to make a dent in the market.

What Microsoft has to do to win

Writing for PC World, Tony Bradley suggests that the reliance on Microsoft’s external services as is the case for other mobile OS platforms also represents Windows Phone 7’s opportunity to make a comeback.

He writes: ‘The goal of Windows Phone 7 isn’t to be the only mobile OS capable of connecting to and working with the vast Microsoft ecosystem. The goal of Windows Phone 7 is to do so better – to integrate more seamlessly and deliver a superior experience that gives customers incentive to want to use Windows Phone 7.’ He argues that Microsoft has achieved this, and with a mobile OS that does not parrot iOS.

Microsoft’s challenges

However, with that said, why then is Microsoft still struggling to close the gap? Bradley argues that ‘The Achilles heel of Windows Phone 7 is Microsoft’s dedication to a Microsoft-centric world.’ He says Microsoft needs to keep its platform open, ‘both allowing for other mobile platforms to seamlessly connect with the Microsoft infrastructure, and enabling Windows Phone 7 to easily connect and work with other systems.’

Our thoughts

Windows Phone 7 is in a precarious position because, truth be told, it’s a very good – and surprisingly unique – mobile OS platform. I tend to agree with this. Some even argue that it is notably superior to Google Android. The problem is in business, sales are what counts – and not the perception of just a few. If Microsoft is to close the gap, and if Microsoft is to make Windows Phone 7 anywhere near the success they need it to be, they’re probably going to need the response to the Nokia Windows Phone 7 handsets to be really good, work hard with carriers to get them to put the devices front and centre, and foster a community of serious evangelists.

They’re trying, but whether they’re succeeding remains to be seen.

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Pretty much day and date with the revelation that Adobe was abandoning Flash mobile – and, in effect, the platform altogether in the long run – news has emerged that Microsoft Silverlight is on its way to the graveyard, too.

The end of the road

Writing for CNet, Microsoft watcher Mary-Jo Foley writes: ‘Several of my customer and partner contacts have told me they have heard from their own Microsoft sources over the past couple of weeks that Silverlight 5 is the last version of Silverlight that Microsoft will release.’ She continued, saying: ‘They said they are unsure whether there will be any service packs for it, and they are also not clear on how long Silverlight 5 will be supported by Microsoft.’

Refocusing?

Foley’s report that Silverlight 5 may be the last release of the platform comes just a few months after there was evidence that Microsoft was reshifting the services focus to be used as a tool for creating rich media for platforms like the Xbox 360. There was a rumour at a point that suggested that Microsoft was retooling Silverlight for use as an app framework on the Xbox, not dissimilar from Apple’s App Store for its mobile devices.

The end of proprietary cross platform tools

With the potential end for Microsoft Silverlight being announced side-by-side with the abandonment of Adobe Flash Mobile, it appears that proprietary cross-platform web tools are dying, giving way to an open-sourced global standard in HTML5. What’s interesting regarding Silverlight 5 being the end of the road for Microsoft’s web tool is how little momentum the platform had to start with. Short of needing the tool during its high profile stint of being a requirement to stream Olympic Games event, I’ve never used the platform. Ever.

The same cannot be said for Flash, which, even today, is ubiquitous.

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In an interview with the New York Times, Nokia CEO Stephen Elop outlined his company’s plan to make a comeback in the mobile devices market where it has fallen behind rivals like Apple and handset manufacturers making devices for the Android platform. He says the key to recovery is to capitalise on users making the transition from feature phones to smartphones, leveraging its relationship with Microsoft, and to leverage unique Nokia software like its location and mapping technology.

Differentiation is key

Stephen Elop told Steve Lohr of the New York Times that ‘There is tremendous opportunity for differentiation’. The first big difference is the mobile OS Nokia’s next generation of handsets will run on, and that’s Windows Phone 7. Though the operating system has been critically praised – we really like it – it’s struggled to get traction. This effectively means few customers have come across it, as opposed to Android and iOS. The opportunity for Nokia is to drive the mobile OS platform into more customers’ hands, surprising them with how different the OS is from what Apple and Google offer.

Smartphones aren’t phones

The next part of the Nokia comeback plan is to build a strong ecosystem around the platform. Where the company will look to differentiate itself from some of its competitors is in investing in the application ecosystem Nokia Windows Phone 7 handsets run on themselves. Elop previously hinted at something similar with regards to his company’s comeback plans in the US specifically.

Showing keen insight, Nokia CEO Stephen Elop looks at mobile handsets as more than just phones, but rather platforms primarily for other uses, including phones. He says: ‘These devices are essentially a platform of sensors,’ adding that ‘The Navteq location data is one of the best assets we have. Fully integrating that technology into our smartphones is a major area of investment for us and a real area of differentiation.’ Whether it will be enough to close the gap, given the incredible momentum iOS and Android have remains to be seen. At least, in Elop’s case, a comeback plan is well articulated. Whether it succeeds is another matter altogether.

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Gavin Kim, who was Samsung’s VP of consumer and enterprise services, has left the company to become general manager of Microsoft’s Windows Phone team. The move comes at a time when fortunes in the smartphone industry are very different for the two companies. Samsung is winning and Microsoft is not (well, not directly, at least), and Kim’s experience in helping Samsung become a smartphone juggernaut in a short 18 months could be of great use to Microsoft.

Why he’s moving

BGR broke the story of Kim’s departure, interviewing him to find out the motivation behind his leaving. He said: ‘In my experience, there is an already fervent base of Windows Phone supporters out there and they all get it. They are passionate, and already very vocal about it … so, it is really my new job to make sure we reflect that message clearly in our product and marketing collaborations with all of our partners to create more Windows Phone believers.’

He explained that his role includes helping set the Windows Phone 7 product roadmap, as well as developing relationships with ‘consumers, carriers, device manufacturers, developers, and partners.’

Product management incredibly important

For Microsoft, the appointment of Samsung VP Gavin Kim as general Manager of the Windows Phone team is a small step in a series of moves the company needs to make if it is to win in the smartphone market.

Microsoft’s sales problems are currently two-parted – their presence and clout with mobile carriers is really small, and consumer demand for the extremely polished mobile OS platform is low, too. The problem for the company is one feeds the other: if the carriers have Windows Phone 7.5 handsets on display, customers will be more interested. If customers start demanding Windows Phone 7.5 handsets, the carriers will, well, carry them. It’s starting that feedback loop that will be Gavin Kim’s challenge.

Photo: Google

Microsoft says Google, one of the company’s fiercest rivals, has lost its way. The company claims that the search giant’s product initiatives have become a veritable graveyard, with the cancelling of several Google products being a sign that there is a lack of vision and product roadmap, which makes the company dangerous for business customers.

Fighting

Tom Rizzo, who is a Senior Director at Microsoft, wrote a blog post entitled Google Graveyard Spooks Customers, pointing out the many products the search giant has cancelled in recent years and what it may mean. Undoubtedly adding more zing to the Microsoft Google stand-off, he does not hold back.

‘In cancelling this group of social media-like services, it is clear that Google is not in tune with the market needs and does not have a product roadmap and clear vision for productivity for their business customers,’ writes Rizzo. ‘The Microsoft Office team does. Our vision demonstrates a clear focus on what business customers are looking for, such as intuitive interfaces across a wide range of devices.’

Shooting arrows in the dark

Rizzo, who really has a go at the search giant in the post, continues, writing: ‘Google releases experimental products and tracks adoption to determine whether to continue providing them. Its products are like spaghetti, Google throws them up against the wall to see if they stick.’

In analysing the merit of Microsoft Senior Director Tom Rizzo’s accusation, we have to consider whether it is at all true, and whether Microsoft is genuinely doing better. Google has been axing many products of late, but that does not necessarily make it a bad thing. The company has publically stated that they will throw more support behind fewer products in the future, in the hopes of hitting more home runs.

What of Microsoft, though? The Redmond-based company is not necessarily the paragon of innovation. Yes, Kinect is nice, as is Windows Phone 7, but what follows that? Moreover, how much recent success has the company had outside of the venerable Office and Windows businesses? The post no doubt adds spice to the Microsoft Google standoff, but its merit beyond that is somewhat questionable.