Newsmaker It took Microsoft quite a while to get going in the phone business, but Robbie Bach is convinced the software maker has made the right call.
The initial Windows phones were clunky and quirky, but Microsoft has kept at it, winning support from key carriers and device makers. It scored a major coup in 2005, when Palm announced it would start selling Windows Mobile-based Treos. Microsoft's software has since found its way into other must-have gadgets, such as Samsung's BlackJack and T-Mobile's Dash.
In an interview ahead of the 3GSM World Congress trade show in Barcelona, Entertainment and Devices unit President Robbie Bach talked about where Microsoft is going in the phone business. He touched on the new Windows Mobile 6 operating system, which makes its debut at 3GSM.
Bach also offered his thoughts on Apple's iPhone, Steve Jobs' call for an end to digital rights management and explained why a Zune phone may not be right around the corner.
Q: Apple has gotten a tremendous amount of buzz with the iPhone. I'm curious what you make of it.
Bach: Apple always brings interest to an area, and certainly, this isn't any exception. Certainly, a US$500 phone is a proposition that some set of early adopters will want to take a look at. There are a lot of people who are Apple fans that will want to take a look at it. US$500 plus a two-year sign-up really puts you in a certain marketplace.
The other thing I'll say about it is their strategy is quite different from ours. Our strategy focuses on helping you bridge the things you do in your work-style and the things you do in your lifestyle. If you think about Windows Mobile and the work we do integrating with mail and Exchange, while at the same time providing people with multimedia capabilities, text messaging, our Windows Live services, search, etc., we kind of span that view. Apple comes at it more from a pure lifestyle perspective.
There is certainly a market for that, but we think the bulk of the market is people who want a phone that does things both for their work-style and for their lifestyle.
One of the specific things about the iPhone is the fact that it is all touch screen. Prada and others are trying this too. Are buttons passÃÆÃÂ©?
Bach: No, actually. I think it's a reasonable question whether touch screens or buttons are a better approach. We've had touch screens on Windows Mobile for three or four years.
Depending on what you want to use the phone for, sometimes touch screen is a good thing, sometimes it is not. The experience we've had with people who want to type (is that) touch screen actually tends to be a little difficult. People tend to prefer the tactile feel of doing buttons.
Likewise, if you are going to do a lot of video on a device, having a screen that's constantly got your hands on it--constantly getting pounded--may or may not be the right thing.
I think it's an open question. Certainly, the touch screen gives you a little more flexibility, in the sense that you can project on that screen whatever you want. There are tradeoffs you have to make. We'll have both on Windows Mobile, that's for sure.
I'd be remiss if I didn't ask your thoughts about Steve Jobs' letter. Is it time for an end to digital rights management?
Bach: Our job really is to provide the tools and the technology that we get requested from our operator partners and from our media and content partners. I don't have a strong view about DRM, other than when people ask for it, we're going to do a great job implementing it and driving it.
The only people who ultimately get to opine on that are the people who are the content owners themselves. We're huge believers and will always be believers in protecting intellectual property. DRM is certainly one of those ways to protect that intellectual property. You are going to see us continue to do great work on DRM, because we think it is going to be a part of the landscape going forward.
Microsoft is announcing Windows Mobile 6 at the show. Why is this release important for Microsoft?
Bach: If you look at the progression of our business in the Windows Mobile space, we've now reached a critical milestone. We've gone from being a small provider with a few handsets and a few operators to--we have now almost 50 operators and almost 150 phones. That business is growing quite well.
What do you see the role of gaming on the phone? Is it just casual games, or is there an opportunity for more? If so, what does that "more" look like?
Bach: Generally the assumption--and I think it is probably right--is that this is this will tend to be more casual, broad-based games. Games that I am going to spend 5, 10 minutes on; not games I am going to spend 5, 10 hours on.
The final thing you have to say is, "OK, what's the business model? Is this a subscription, is it a paid-for download? Is it an advertising-based model?"
This is a place where I don't think there's a lot of consensus yet. I think the marketplace is still evolving a reasonable amount. It's not like in the PC gaming market, or in the console gaming market, where we have an established model--You go out and pay US$49 or US$59 for a game, you take the package home and put the DVD in. It obviously doesn't work that way. The operators are involved, and there's more people involved in the ecosystem. I think the business model part is, in some ways, the most challenging. How much absolute dollars are there to flow around?