Tara Seals Blog: Verizon Wireless Ditches Windows Phone 7 for 2010

No. 1 U.S. wireless operator Verizon Wireless has decided not to carry any of the upcoming Windows Phone 7 devices this year. What about in 2011, you might ask? The answer to that is, “Probably."

That’s what VzW spokesperson Brenda Raney told BusinessWeek, saying that the carrier does plan to support the new operating system eventually, “probably" offering a device in 2011.

This has generated a lot of press, but both Orange and AT&T Inc. are premier partners for Windows Phone 7 devices, meaning that they’ll be offering them before the competition gets its mitts on the gadgets anyway. With handsets based on the new OS only due for arrival in time for the holidays, it’s unclear if Verizon would have been able to launch a Windows Phone 7 device in 2010 anyway, as a matter of practicality.

Another theory would point out that Verizon has had a lot of rather pleasing success with the Droid, Droid Eris, Droid X, and so on, and might be planning its marketing budget around new Android offerings rather than an unproven new gadget.

Regardless, the move has left many wondering how this will affect Microsoft Corp.’s fortunes in the consumer mobile space, which have not been great so far. While AT&T’s exclusive lock on the iPhone has shown that Verizon’s distribution is not necessary to garner success, there’s certainly no guarantee that any Windows Phone 7 will prove to be as compelling as that iconic device.

Far from it. Microsoft is relying on Windows Phone 7, unveiled at Mobile World Congress in February, as a last-ditch effort to play with the big boys in the consumer wireless space, with a new focus on multitasking and intuitive application integration (including new “live" widgets, Zune audio/video and Xbox 360 functionality). Fortunately, that marks a significant departure from the lackluster WinMo OS experience of the past.

But whether taking on the subsidies and marketing spend for the new phones will pay off for Orange, AT&T, or anyone else for that matter or not remains to be seen. Microsoft's previous Windows Mobile devices have paled next to the iPhone and Android-based devices, except among business users, who appreciate the integration with their desktop Office software. The reason for that largely has to do with its revenue model: Unlike the free competing platforms, like Android, Microsoft charges handset-makers for access to its wireless OS. That fact hampers the range of devices available. It also has failed to attract many to its app store, Windows Marketplace, which it launched in October 2009. And, let’s face it, the Windows Mobile user interface was/is nowhere nearly as intuitive nor “fun" as Android and the iPhone, or even the BlackBerry.

Also, we should remember that Microsoft made a high-profile stab at consumer phones with the Project Pink initiative – a group based off its Danger cloud services acquisition – tasked with developing consumer phones. The first two offerings were the “KIN" handsets, which took many people by surprise as they targeted the tween and teen market with built-in social networking capability — not the Microsoft soft spot. Verizon Wireless was the carrier, but it soon saw its not-small spend on marketing the gadgets go down the drain since Microsoft killed KIN before it had a chance to reach puberty — just 48 days after launch, after failing to sell many of them.

Microsoft has little time left to prove itself in the consumer space, and is late to the game vis a vis other smartphones. We’ll see if Verizon’s apparent lack of enthusiasm proves to be a wise move or not.