Microsoft partners with many application vendors across the board and moving too heavily into the application space would incense many. However, there is viability in developing a mid-market mobile application proposition, given the unconsolidated nature of offerings from operators, traditional ISVs, start-ups and mobile middleware players.
Threats
In the device OS market, as at desktop level and in the server-room, Linux clearly represents a threat to Microsoft, and one it expends much energy playing down. Although there has been little uptake of Linux to date specifically as an operating system for multimedia cell phones, there are many who are not keen to implement end-to-end Microsoft solutions. Linux will give these companies added freedom in choosing applications, middleware and infrastructure.
Symbian represents a huge threat for Microsoft, given user-experience. Symbian does not believe that the rumored prototypes including the Microsoft's SmartPhone development efforts with other cell phone manufacturers and providers is as viable a business model. The backing of all the major consumer-focused handset manufacturers for Symbian will mean that Microsoft faces a considerable uphill struggle in the consumer space to which a higher percentage of its Smartphone sales than anticipated may be relegated.
In the battle for developers, Microsoft's products currently face considerable challenge from J2ME platform and development efforts. The.Net Compact Framework has seen a limited degree of uptake to date but the mobile industry as a whole (particularly the consumer-facing side) tends towards supporting the Java development community.
Product Development Challenges for Microsoft
What is most significant as a challenge for Microsoft internally is making the necessary Web Services capable of supporting an aggressive Digital Rights Management (DRM) roadmap. The multimedia cell phone product development is easily accomplished with the assistance of Solectron and Flextronics, yet the addition of DRM and integration into a broader cellular phone enterprise network is critical. Figure 4 shows an example of the DRM roadmap Microsoft would need to keep in mind to drive content for the multimedia cell phone introduction.
Figure 4: Aligning with DRM Growth Is Critical to Microsoft' Success
Source: DataMonitor (2006)
At present Microsoft is pushing their SmartPhone platform over and above the breadth of DRM applications they need, and this is opening up significant opportunities for Symbian to continually gain share.
Mobile Solution Platform Strategic Factors: The Critical Link Globally
In addition to the need for DRM to manage content, Microsoft needs to extend their Server strategies to encompass and create a more robust mobile solution platform. Figure 5, Mobile Solution Platform Ecosystem, shows the need for having a business process centric approach to managing multimedia cell phone synchronization of content - a key requirement for the enterprise market.
Figure 5: Mobile Solution Platform Ecosystem Source: AMR Research (2006)
The following are the phases mobile solution providers are progressing through, and Microsoft must embrace a process-centric approach to Web Services and application development to succeed in this market. The phases of growth are defined here:
Phase 1 - Large enterprise management vendors will develop true 'mobile expertise', integrating mobile elements into their core solution offerings (as opposed to the point solutions they offer today). Phase 2 - Business process management (BPM) vendors will recognize that mobile solutions provide a considerable opportunity and look to add BPM elements to existing management solutions. As a result, business processes that utilize mobile technology may then be exposed, managed and manipulated as and when necessary in order to generate even greater cost savings and efficiencies. Phase 3 - Following BPM integration into management solutions, business activity monitoring (BAM) will start to play a role, so that enterprises may start to understand the dynamics of various parts of multiple processes.
Competitive Assessment of Mobile Solution Management Partners
Source: AMR Research (2005)
Market Segmentation
There are many approaches to defining the market for a multimedia cellular telephone, yet in the case of Microsoft the best approach is to focus on the use-based or life-style-based segmentation criteria defined in Table 5, Segmentation Definitions of Multimedia Cell Phone Content and Uses. This analysis is based on a series of competitive assessment and the collective research of Credit Suisse First Boston, Prudential Equity Group and the work completed by AMR Research (2005).
Table 5: Segmentation Definitions of...
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