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Windows Phone 7

Which business model is the right one: Apple’s or Microsoft’s?

Actually, Apple isn’t the only company that specs and sells its own phones; RIM, Nokia, and HP/Palm do as well.  The other camp (Microsoft and Google) simply make the OS and software for their platform but license it out to manufacturers.  (There are some grey areas in this statement but let’s not get bogged down with semantics...)

There are obvious advantages to what we will call Apple’s model: they spec the hardware (technically, they don’t actually manufacture it) and sell the phones themselves.  This gives them the control they are used to and has obviously done them well.  Updates to the OS for Apple are much easier as they only have the one type of hardware (sorta) and app development is simplified.

Microsoft’s Windows Phone models are manufactured by many different companies and give us a variety of choice that I personally love.  Certainly, not every form factor will appeal to everyone, so it’s nice to see the variety, but that does come at a bit of a cost.

This time around (compared to Windows Mobile) Microsoft has kept the platform requirements for Windows Phone to a very tight minimum.  We still have variety but it’s more about interpretation of specifications than fragmentation based on guidelines.  This will allow Microsoft to be in control of updates to a level they never had with Windows Mobile.  Both the advantages and challenges for this business model lie with Microsoft’s partners, though.  Yes, we get a choice of device but we have to figure out which choices are good and which aren’t.  Additionally, Microsoft may want to see certain hardware enhancements, but it isn’t up to them how each partner candy-coats its phones.

So, back to the original question: Should Microsoft has made their own Windows Phone or did they pick the right business model for best success?

Microsoft actually uses both practices in their line of products.  The Windows OS has always been an OS sold (mainly) to partners for them to build the “boxes."  On the other hand, the XBOX and Zune product lines are Microsoft`s own.  Phones are a bit of a different game (oops!  I almost said “apple”) in that carrier relationships have to be developed, a feat that takes time.

My Take

Personally, I think they did the right thing in licensing the OS to manufacturing partners.  At the very least, it`s the best thing for end users because we end up with a bevvy of devices from which to choose.  There would have been a lot of things Microsoft would have had to do if they were flying Windows Phone on their own, including manufacturing agreements and carrier relationships they don’t already have.  The time-to-market ends up being much more streamlined for Microsoft and they get to focus on what they do best.

While Apple has done very well with their business model Google has shown that licensing to partners also works.  Microsoft has worked closely with manufacturing partners for a very long time and has shown that it works well for them; they might as well stick with this formula and concentrate on bringing us updates.  PLEASE, can we have the updates!!??

Thoughts, arguments, rants?  Be sure to share your opinion in the comments section below!


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