Surprise! Windows Phone gaining traction

Microsoft looks to gain mobile momentum with new phones this week

Microsoft on Monday is expected to unveil several AT&T-branded Windows Phone handsets -- a move that comes at a time when the company's radically changed smartphone OS seems finally to be gaining traction.

Some industry analysts, such as Gartner, have been revising upwards their projections for Windows Phone unit sales, in part due to Nokia's announcement earlier this month of the first of a new family of smartphones based on the Microsoft firmware. [See "Nokia unveils first Windows phones"]

Other data finds growing interest in Windows Phone -- at least among those consumers who are aware of it. A September consumer survey found that 44% of smartphone owners, and those who intend to buy one, are considering buying a Windows Phone 7 handset, according to NPD Group's Connected Intelligence service.

NETWORK WORLD'S HOTTEST TECH ARGUMENTS: Apple iOS vs. Google Android vs. RIM BlackBerry OS vs. Microsoft Windows Phone

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Microsoft on Monday is expected to unveil several AT&T-branded Windows Phone handsets -- a move that comes at a time when the company's radically changed smartphone OS seems finally to be gaining traction.

Some industry analysts, such as Gartner, have been revising upwards their projections for Windows Phone unit sales, in part due to Nokia's announcement earlier this month of the first of a new family of smartphones based on the Microsoft firmware. [See "Nokia unveils first Windows phones"]

Other data finds growing interest in Windows Phone -- at least among those consumers who are aware of it. A September consumer survey found that 44% of smartphone owners, and those who intend to buy one, are considering buying a Windows Phone 7 handset, according to NPD Group's Connected Intelligence service.

NETWORK WORLD'S HOTTEST TECH ARGUMENTS: Apple iOS vs. Google Android vs. RIM BlackBerry OS vs. Microsoft Windows Phone

"It's much better than many people give it credit for," says Ken Dulaney, vice president of mobile at Gartner. "The new hardware is much better and will compel users to give it a shot."

Al Hilwa, program director for applications development software at market researcher IDC, says, "Windows Phone is on the right track and the latest upgrade closes the gap significantly and begins to differentiate [from iOS and Android. Microsoft has] to get the strategy and ecosystem right, and the market shares will follow."

Yet plenty of obstacles remain, and no one, apparently including Microsoft, expects Windows Phone to leap over Google Android and Apple iOS in a single bound.

"The biggest problem is the name and the marketing," says Dulaney. "Windows Phone 7 is not a name that will appeal to the 25-year-old set. Microsoft thinks that everyone knows Windows. What they're forgetting to investigate is what people emotionally feel about it."

Microsoft's market structure -- an operating system provider working with and through phone manufacturers and carriers -- imposes constraints also, according to mobile watcher Horace Dediu, founder of the Asymco blog and a former Nokia business development manager.

In a recent blog post, he noted that Microsoft's "dependence on a complex value network means that products do not reach users quickly enough and when they do, the marketing message is weak, even when backed by large budgets. The real problem with Microsoft's approach is that it's neither viral like Android (because it has a price and a contract associated with it) nor is it focused and agile like Apple's. It seems to suffer from the worst aspects of modularity (market lag) without benefiting from the control over the ecosystem and end user experience that differentiates it."

There are indications that the lag and lack of agility may be changing. Nokia recently introduced its first two Windows Phone products nine months after announcing its special partnership with Microsoft. It's already distributing the Windows Phones in Europe and some Asian markets, and plans to bring a "new portfolio" of phones to the U.S., a traditionally weak market for the company, in early 2012, while expanding into other Asian markets, and to China later that year.