Windows Phone 7 Faces Identity Crisis

Microsoft confirmed weeks of rumor and speculation by revealing that it will, in fact, launch Windows Phone 7 on October 11. A joint event held with AT&T, and possibly T-Mobile, will unveil the Windows Phone 7 devices although they’re not expected to be available until sometime next month. Microsoft may have a hard time making Windows Phone 7 rise from the ashes of Windows Mobile and succeed while trying to straddle the line between business and consumer smartphone.

The smartphone arena is tough these days. The stagnation of Microsoft’s Windows Mobile, and the fall of Palm’s WebOS have effectively left RIM, Apple, and Google fighting for market share. The iPhone has been creeping up on BlackBerry, and Android has been gaining ground on iPhone.

What is interesting, though, is that despite its own relative stagnation, RIM has been able to maintain its lead because of how it has woven the BlackBerry into the fabric of the corporate culture. It may have suffered some losses at the hands of iPhone and Android, but RIM has established the BlackBerry as the iconic smartphone of business users, and that position has enabled it to remain competitive.

Apple’s iPhone, on the other hand, is the quintessential example of the new era of smartphones where demand swells from the base up rather than from the IT admin down. Despite its initial perception as a mere consumer toy, the iPhone has managed to lead a smartphone revolution and infiltrate businesses. Acceptance of the iPhone and Apple “iCulture” have paved the way for businesses to also embrace the Apple iPad, and made it easier for Android smartphones to be adopted by business users.

That brings us to the Windows Phone 7 identity crisis. Microsoft sits by default on the RIM side of the smartphone battle. The integration with Microsoft applications and tools such as Exchange, Microsoft Office, and Microsoft Unified Communications makes the Microsoft mobile platform ideally suited for business. With such a dominant role in business computing, Microsoft should have been the de facto mobile platform for business all along instead of RIM.

Windows Phone 7 also takes a page from the iPhone playbook, though. The core business functions and productivity tools of Windows Phone 7 are combined with a Zune-like interface and an Xbox Live console that may appeal to consumers, but have little place in a business smartphone.

Granted, Apple and Android are forcing their way into the business culture with a combination of consumer media and entertainment and business productivity functionality. But, just because Apple can get away with providing a “business” smartphone capable of playing Madden Football, or blasting out fart noises doesn’t mean that Microsoft can follow suit with a smartphone that doubles as a gaming platform.

Luckily for Microsoft, Windows Phone 7 seems to be fairly well received so far, and anxiously anticipated. Scrapping its Windows Mobile roots and engineering a completely new mobile OS seems like a great move, and Microsoft appears to have gotten things right with this platform.

The dual appeal might work on some level to expand the potential pool of customers interested in Windows Phone 7, but the inclusion of Xbox Live might make it a hard pill for some IT admins to swallow. But, the smartphone market is tough, and Microsoft faces a number of challenges. Perhaps this identity crisis is the least of Microsoft’s worries.