Summary: Microsoft stumbles in mobile phones/devices and its share price too tumbles significantly as its future is questioned by pundits

Vista [sic] Phone 7 is not even out yet and it has almost no applications at all (big mistake for Microsoft to abandon third-party applications compatibility). So why does it receive so much press coverage? It's not as though Windows Mobile even matters much in the phones space. It seems possible that Microsoft used the leak trick to get some coverage which supposedly resulted from an "accident" (Microsoft does this with Vista 8 at the moment because to put out there Vista 8 screenshots without a supposed 'leaker' can send the message that Microsoft to has given up on Vista 7). It's hard to tell for sure, but Microsoft does use many fake 'leaks'; it possibly learned this from Apple and we gave many examples before.

There are missing features (even copy and paste) and obstacles, such as the fact that Microsoft is alienating developers. Many large ones have dumped Windows Mobile, at least for now (examples include Mozilla, Skype, and Adobe). Tony Bradley from IDG argues that "Microsoft might be late to the party and have trouble reversing the tide."

Eric Knorr from IDG publishes his thoughts under two separate headlines (maybe changed by an editor), one being "Microsoft's embarrassing problem with the future" and the other being "Why Microsoft Can't Figure Out What's Next". From the summary [1, 2]:

When it comes to mobile computing, the cloud, and desktop virtualization, Microsoft can't seem to shoot straight

We have already covered the fact that Microsoft is sort of bribing mobile developers so that they target Vista Phone 7. The pro-Apple sites call this bribery [1, 2] ("Microsoft Bribing iPhone Developers to Build Windows 7 Games") and it's reportedly not working out for Microsoft. The fragmentation [1, 2, 3, 4, 5, 6] sure is not helping and the problem is recognised by more and more sites [1, 2]. Apparently pushing ads is Microsoft's idea of a 'killer feature' [1, 2]:

Microsoft is positioning its upcoming Windows Phone 7 smartphone OS, planned for release this October, as an "ad-serving machine."

Who would want something like that? Surely not users.

This whole thing is starting to look like another Zune in the making. Our reader Ryan, who used to work at Walmart as an assistant manager, still visits the store and he says that "Walmart has a 16 GB Zune HD. They haven't sold any in the last 4 months at least. I can tell because they haven't moved"

Zune is likely to be doomed, but Microsoft depends on its operating system because of the disaster called "KIN" (more on that in a moment). "Bing-Zune integration still not working," says CNET's headline and yet again downtime hits the Zune. It suffered a downtime last week and it has become an embarrassment to Microsoft, whose CEO tried to distance himself from the product's failure. Unsurprisingly, Microsoft's CEO is not paid so well compared to peers [1, 2, 3] and according to Cory Doctorow:

Aaron Swartz has the news of how the White House is trying to gut a piece of legislation (passed by the House and the Senate) that would be key to reining in CEO compensation in large corporations

The WSJ links to itself (a subsite of sorts, where Kara defends Microsoft) in an article titled "Could a New CEO Fix Microsoft?"

A pro-Microsoft publication goes with the headline "How Vulnerable Is Microsoft?"

Joe Wilcox gives "Five reasons why Microsoft can't compete (and Steve Ballmer isn't one of them)" while Matt Asay (Canonical) claims that "Microsoft disqualifies itself from smartphone race"

In the hugely competitive smartphone arms race, there’s only one real certainty:

Microsoft is out. Disqualified. Not competitive.

Why? Because Microsoft failed to tune into its own theme song: “Developers. Developers. Developers.” For a variety of reasons, the company fetished Windows desktop developers to the exclusion of mobile developers and now it’s paying the price.

Just how "not competitive" is Microsoft? Well, last week we aired the rumours that Microsoft had sold just 500 units of "KIN". Microsoft is not denying it yet:

But when taking a closer look at the information that's available -- since Microsoft is unlikely to offer sales numbers that could dispute or confirm the rumor -- its easy to see why this tall-tale has legs.

TechFlash's Microsoft booster Todd Bishop took it upon himself to get some answers and he investigated in a local shop. He wrote:

For starters, if I hadn't been looking for the Kin, I might not have known it was there. At each of the Verizon Wireless stores I visited, the Kin did have a dedicated area, measuring a few feet across against the wall. But the area was generally overshadowed by promotional areas for Android devices and other high-end phones sold by the carrier.

For those who do not know, TechFlash is still receiving Microsoft sponsorship, but this time around it's a lot more diluted:

A big thanks to our sponsors for their support: Barokas PR, BDO, Bing, KeyBank, and R2integrated. For additional sponsorship opportunities, please contact Joe Heslet at jheslet@bizjournals.com.

In order to float "KIN" Microsoft has come up with a new and pathetic press release, appealing to children. Microsoft pretends that it's a niche product for young people, not for stupid buyers.

The price of "KIN" was cut by about 50% (depending on the store) due to abysmal demand and it continues to receive terrible reviews, the latest example being this detailed review from Brighthand:

The bottom line:

Microsoft stated that, with the Kin, they were developing a phone that sits somewhere between so-called "feature phones" that offer the basics and a full-featured, pricier smartphone, but with the Kin Two, they've managed to capture the worst of both worlds, often underperforming low-end phones when it comes to capability while charging more than a typical smartphone if you opt for the Zune Pass subscription.

No wonder the management left the project and the company. It's just a total embarrassment. Open for Business has another new review of "KIN" and it was disappointed, just like everyone else (misguided buyers, not just reviewers whom Microsoft sent a phone).

Sadly, for now this means we would point those in the market for a new Verizon phone to one of the company’s collection of Android devices instead. We wanted to like the KIN, and like the concept car analogy mentioned earlier, many of its ideas are good in theory – they just come up short in practice.

At the expense of Microsoft and other brands, Linux/Android and Apple continue to grow (the Linux-based Android and Apple grow at the fastest pace). Forbes has published "Could Apple Collapse? Not Likely"

This is a response to Henry Blodget's contention (also published in Forbes) that "odds are increasing that Microsoft's business will just completely collapse."

“It's funny that a Microsoft booster/watcher becomes a Microsoft basher within just a couple of years. Maybe he just cannot ignore the facts anymore.”These articles have some factual basis. Another new one from Henry Blodget is titled "Reason No. 19 Why Microsoft's Business Is Massively Threatened: Corporate Users Now Want What They Have At Home"

Bloomberg is responding to Blodget and it's part of the big PR campaign that tries to show Microsoft as professional and invincible. Joe Wilcox, a former editor of the "Microsoft Watch" Web site which has been almost dead for months right after he left it, argues that "Apple revenue will likely top Microsoft during Q2"

It's funny that a Microsoft booster/watcher becomes a Microsoft basher within just a couple of years. Maybe he just cannot ignore the facts anymore. "Microsoft Volatility Elevated; Shares Near 10-Month Low," said this financial site last week. Another financial news site says that "Microsoft Is Down 15.77% Since Reporting Quarterly Results 57 Days Ago" and "Microsoft 9.20% Below its May 6th Flash Crash Low of $27.91" (those are just the headlines).

Unless Microsoft can find a way to evolve for the Web and adapt to mobile technology, its days (or years) may be numbered. It already has an increasing debt. ⬆