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I think it’s safe to say that there is room in the smartphone market to accommodate Windows Phone 7.  The explosion of the Android platform over the last 12 months suggests the iPhone didn’t solve everyone’s smartphone needs.  And Android I’m sure isn’t covering the remaining smartphone demand (e.g., folks are still using Blackberries!)

The reasons for this migration given by many imply that much of Android’s success lies in the ‘productivity’ department – people’s ability to access their necessary tools to get things done.  Efficiently.  Think: Gmail, Calendar, Voice, Maps.

Yes, Apple has all of these tools, as well.  But Google spared no expense at very deeply integrating these applications into Android OS and their usefulness far outshines the same applications on the iPhone.  Simply put, Google kept its best for itself.

This quality improvement in Google Apps on the Android platform is exactly why Microsoft currently has no shot at a strong performance in the Consumer market.  The comparable suite of applications – Hotmail, Outlook, Bing Maps – is a complete embarrassment and serves little utility to the consumer class.  Yes, access to the many Google Apps will trickle into the platform over time, but they will lack the same depth of integration that the iPhone suffers today.  I feel confident that Microsoft sits well in the Enterprise space with Phone 7, as users can easily sync with their PC’s Outlook tools, but success in the consumer space depends on strategic investment [and acquisition] in consumer utility tools.

To reach parity with Google’s Apps – which I believe is the only way it will dig into significant Android or iPhone market share – it needs investment in 3 critical areas:

  • Calendar
  • Email
  • Documents (cloud Microsoft Office)

This is how they can best achieve this:

First, Microsoft needs to revamp Outlook in order to accommodate non-business needs – while still preserving corporate security, etc. – with this consumer integration.  No simple task, of course, but the merging of these corporate and personal calendars is critical. Consumers will require a personal calendar to manage a growing social event-planning ecosystem (i.e., Tungle, Eventbrite, Facebook events, Meetup, Evite, etc.).

Second, Microsoft needs to use its deepening relationship with Facebook to convince them to build an Email platform they both can use.  With 1.5% ownership and a new partnership integrating Facebook search on Bing, Microsoft needs to help Facebook build a consumer Email client that begins to eat into incumbent market share – Yahoo! and Gmail.  Hotmail is still big, but also a dying and tainted brand [thanks to Microsoft’s lack of focus, priority]. Therefore, let the people who understand ‘people’ build it.

Third, Microsoft has tripped-up moving documents to the cloud.  I think this is pretty obvious to everyone.  It’s also very reminiscent of how the Music industry flopped on its opportunity to migrate its own business models during a shifting consumption paradigm (mp3’s).  Google Docs is making an aggressive play in online documents and Microsoft needs to think fast and buy a veteran in the space.  In order to meet and beat Google at its own cloud game, Microsoft’s best chance at catching incumbents is to buy both Zoho and Scribd and use them to aggressively attack Consumer [and even improve Business tools for online collaboration and presentation].  Zoho may not be a direct money-making proposition for Microsoft, but it will present consumers with the ‘standard’ set of applications they use to share information with their friends and other groups.

Casual users now expect to have the 3 aforementioned utilities, and if Microsoft wants a return on investment in Consumer – which its snazzy UI design suggests it does – it needs to invest!  Or get head’s-down focused on targeting only the Blackberry market.

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