Is There a Rosy Future for Microsoft and Verizon?

The Wall Street Journal this week reported that Microsoft and Verizon Wireless are developing a multimedia touchscreen phone slated for release next year. There’s some speculation about whether Pink, as the project is dubbed, is a smartphone, a suite of consumer-focused mobile services or simply an unfounded rumor. Regardless of its exact form, though, if Microsoft isn’t already at work on Pink, it should start. Today.

The Journal piece failed to cite sources, and the companies have predictably stayed mum on the report. (Microsoft has denied reports that it plans to build its own device and instead is focusing on “deepening our relationships with our hardware partners.”) The collaboration makes sense on several levels, though: Verizon — whose latest hit handset is the BlackBerry Curve — would love to offer another device to counter the iPhone (Pink is likely to support Microsoft’s forthcoming, consumer-focused app store) and could leverage the platform to target big businesses, with whom AT&T has a distinct advantage, according to Strategy Analytics.

The driving force for the deal, though, would be Microsoft’s desperation to become relevant in mobile beyond hardcore enterprise users. BlackBerry OS eclipsed Windows Mobile in smartphone market share a year ago, and Apple’s iPhone outsold Windows Mobile-enabled devices for the first time in third quarter 2008, according to Gartner, growing more than threefold year-over-year as Windows Mobile sales slid 3 percent.

And while Microsoft is on the sidelines of the exploding consumer space, Verizon’s aggressive marketing blitz helped the BlackBerry Curve move past the iPhone last quarter to become the top-selling consumer smartphone in the U.S. The nation’s largest carrier obviously has some chops when it comes to selling high-end handsets to consumers, but Verizon could use another high-profile, consumer-targeted handset to complement its network and set up a bulwark against competition AT&T’s iPhone, T-Mobile’s Android handsets and the Palm Pre from Sprint.

That’s not to say that a Pink handset — whatever it may look like — would be an instant threat to the iPhone. The Windows Mobile user interface is in dire need of an overhaul. Version 7.0 is due out next year, but today’s OS remains far too clunky for mass-market adoption. And Verizon would have to support the device by embracing Microsoft’s new developer ecosystem, which aims to give third-party publishers more tools and flexibility in bringing their wares to market.

Microsoft is in dire need of the kind of consumer reach Verizon could provide, though, and it would be wise to capitulate to the carrier at every turn to strike a deal. Verizon, meanwhile, could add a device from a noted partner to its portfolio, and could market the handset as the mobile marriage of work and play. If it actually exists — and if it’s executed well — Pink could help cement the operator’s No. 1 standing and finally give Microsoft a way to reach mobile consumers.

Question of the week

Will Verizon launch a Microsoft-branded handset in the next year?
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Colin Gibbs

Colin Gibbs

Founder and Principal Peak Mobile Insights

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1 Comment Subscribers to comment
  1. Michael Wolf Thursday, May 7, 2009

    I think ^^^Verizon’s subscriber count and data revenues would make any technology partner eager to partner with them.^^^ Still – Microsoft handset? Maybe they will put the Danger IP to good use?

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