Is Microsoft Toast?

Six weeks. That’s how long it took for Microsoft to yank those silly Kin phones for tweens off the market. And I could see it coming from a mile away. During a briefing in New York on launch day, I spent most of the Q & A portion scratching my head over what Microsoft left on the cutting room floor. No apps. No games. But yes to Exchange support?

Some say that Microsoft’s decision to pull the plug is a sign that the company has become more focused on what it needs to do to succeed in mobile, while others are treating the Kin’s failure as a microcosm of Microsoft’s inability to keep pace with Apple and Google. Despite some bright spots for the business—Windows 7 and Office sales, Bing’s momentum, and Xbox Live profits—I think it’s the latter. According to an article on the Silicon Alley Insider, Microsoft’s own employees felt “embarrassment all over campus” about the Kin’s failure and blame management. If the company can’t sell its own employees on its mobile strategy, how is it going to win over consumers and businesses?

All eyes will be on Microsoft this fall for the debut of Windows Phone 7, which promises some pretty unique features. The OS emphasizes hubs that center on what users want to do (music, productivity, video, etc.) and customizable live tiles, which is a pretty smart way to organize a brand-new interface. Having Xbox Live functionality on board will also help WP7 stand out. However, Apple already has a huge lead in mobile games and is in the process of adding its own gaming social network.

Meanwhile, Android has amassed an army of superphones and apps, enabling the OS to grow 4 percent from February to May (according to ComScore). During that time, Windows Phone dropped 2 percent. RIM is still in first place, but both iOS and Android have stolen the spotlight. At least based on current trends, Microsoft will likely start in fourth place.

Which brings us to tablets. The reason why Android and iOS will likely leave Windows in the dust is because both mobile platforms can scale to larger-screen devices, while Microsoft is still attempting to cram a desktop OS into slates. The HP Slate CEO Steve Ballmer flashed to the crowd at CES looks as though it will never come to market, especially now that HP has purchased Palm for its webOS. I cringed when I recently heard Ballmer call tablets just another kind of PC. That’s just plain wrong.

Although I argued recently in this column that the best attributes of tablets could make full-fledged PCs better, it’s because the iPad is the exact opposite of a traditional computer—instant-on, ultra-low power, intuitive touch interface—that it’s enjoying such great success. Granted, Google’s platform still has a long way to go, but by this fall we’ll finally see Android slates in the market from major manufacturers that can access the Android Market and support Flash (thought to be a competitive differentiator versus the iPad).

This week I spoke with analyst Michael Gartenberg, who said that the next 10 to 15 years won’t be about desktop computing, but mobile devices and all of the other gadgets that are becoming connected. And that includes TVs. Google TV, launching this fall on Sony TVs and set-top boxes, is based on Android. There are also rumors that Apple will re-launch Apple TV with iOS inside, bringing its vast app store (including games) to the big screen. At the same time, Microsoft is trying to position the Xbox as much more than a gaming console with features like Netflix and Hulu Plus.

What Microsoft really needs, though, is a unified platform that stretches across phones, tablets, cars, TVs, and set-top boxes and ties into the cloud. There are just too many flavors of Windows floating around. Does the world really need Windows Embedded Compact 7?

To be clear, Microsoft can still innovate, as evidenced by the gesture recognition technology inside the upcoming Kinect accessory for the Xbox. The company also deserves some kudos for Kin Studio, which enabled the handful of Kin phone buyers to automatically upload photos and videos to the web. (I think this feature should be rolled into Windows Phone 7 and Windows Live.)

Nevertheless, these days more bad vibes are coming out of Redmond than good ones, which no amount of marketing or positive spin can fix. The only way for Microsoft to remain a force in tech is to not only nail the launch of Windows Phone 7, but to press the reset button on its tablet strategy, just as it did with Windows Mobile. The company should also consider replacing Zune as a brand with Xbox for gaming and entertainment across all connected devices, including PCs and TVs. Microsoft isn’t completely toast, but I do smell something burning.

Editor in chief Mark Spoonauer directs LAPTOP's online and print editorial content, and has been covering mobile and wireless technology for over a decade. Each week Mark's SpoonFed column provides his insights and analysis of the biggest mobile trends and news. You can also follow him on Twitter.

Mark Spoonauer
Responsible for the editorial vision for, Mark Spoonauer has been Editor in Chief of LAPTOP since 2003 and has covered technology for nearly 15 years. Mark speaks at key tech industry events and makes regular media appearances on CNBC, Fox and CNN. Mark was previously reviews editor at Mobile Computing, and his work has appeared in Wired, Popular Science and Inc.