Skype buy, Windows Phone 'Mango' update highlight Microsoft mobile strategy

How Microsoft is gearing up for a fight with Google and Apple

The success of both the Apple iPad and Google's Android operating system has sent a clear signal to Microsoft that mobility is the future.

The success of Apple's iPad and Google's Android operating system has sent a clear signal to Microsoft: Mobility is the future.

Microsoft's planned $8.5 billion Skype acquisition and its upcoming "Mango" update to Windows Phone 7 show that the tech giant has gotten the memo and is positioning itself to play a stronger role in the mobile market. In terms of the Skype buy, ABI Research analyst Appo Markkanen notes that the acquisition will help Microsoft stay ahead of the game when it comes to mobile video calling since Skype already has a long history of successfully implementing the kind of technology that Apple is just starting to use with its Facetime application for the iPad.

"Skype has been around for a long time and its team is very talented," says Markkanen. "Skype video calling is a rather advanced system and it would allow Nokia or other device makers that use Windows Phone to have a strong video calling feature."

ANALYSIS: Microsoft goes on the defensive with Skype acquisition

Gartner analyst Leif-Olof Wallin similarly thinks that the Skype acquisition will help Microsoft not just with the mobile market but with the broader consumer market as a whole.

"Skype fits very well into the consumer VoIP and Video part with an extremely strong brand name, so strong that it's become a verb in many parts of the world," he says. "The world is becoming more and more mobile so mobile is an important piece, but the 'uber trend' is Microsoft going consumer."

Looking at the upcoming Windows Mobile update, code-named "Mango," it seems that Microsoft will be adding a lot of new key features to its Bing mobile search engine, including a Bing Audio feature that can identify songs that are playing within earshot of Windows Phone devices. Other expected features include an augmented reality tool that lets users scan barcodes and a turn-by-turn navigation offering.

Both the Skype purchase and the "Mango" update could generate some much-needed buzz for a mobile operating system has been largely in the shadows of Apple's iOS and Google's Android. Most analysts have predicted that Windows Phone will get a boost from Nokia's decision to discontinue its Symbian operating system in favor of Windows Mobile, but ABI Research projected earlier this year that Android will get the lion's share of former Symbian customers, thus leaving Microsoft as a relatively minor player in the mobile industry.

Infonetics analyst Diane Myers thinks that Windows Mobile will eventually have to develop a mobile applications base on par with iPhone and Android if it wants to compete for a bigger market share.

"Skype definitely gives [Windows Mobile] a brand but it won't make Windows Mobile competitive just by itself," she says. "Think about the iPhone and Android systems and what makes them compelling -- it isn't just the ability to do voice and video. It's also about all the apps they have."

Despite all these moves in the mobile market, Markkanen says that we shouldn't expect Microsoft to make any further big-ticket mobile acquisitions in the near future, even as the company has begun to work more closely with handset manufacturers.

"There has been some speculation that Microsoft might acquire RIM or Nokia but that would be rather risky," he says. "They've already spent a lot of money on the Skype takeover."

Learn more about this topic

Android will be on almost half of smartphones by 2016, ABI projects 

Microsoft goes on the defensive with Skype acquisition 

Microsoft to acquire Skype for $8.5 billion

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