Does Microsoft want to expand into phone hardware?
Or maybe Microsoft wants to sell the hardware in the same way it sells mice and keyboards. Bad idea, and Microsoft probably knows better than to compete with its Windows Mobile device partners.
I have trouble seeing the advantage here -- and so does Dulaney, who has been around the mobile world a long time.
Microsoft's incentive: Windows Mobile isn't doing well
Despite the lack of clarity on what Microsoft is hoping to get from Danger, it's obvious why Microsoft is looking for help with its mobile business. After six iterations, Windows Mobile is not at all a success.
Research firm Canalys reported last week that Apple took a 28 per cent share of the US converged-device market (smartphones and connected PDAs) in the last quarter of 2007. RIM was in first place with a 41 per cent share. Adding up the share of all Windows Mobile device vendors gives Microsoft 21 per cent, with Palm at 9 per cent.
At first blush, that 21 per cent sales figure sounds decent. But it turns out that those consumers who do buy a Microsoft-based smartphone are returning them in droves, never a good sign. David DeJean, who blogs at Computerworld.com, saw a press release from Opinion Research Corporation, which said (and I'll quote directly, because as DeJean points out, the wording is interesting),"Smartphones [excluding iPhone and RIM BlackBerry] were the most returned electronic technology products of the holiday season, with slightly more than one-fifth (21 per cent) of smartphone buyers returning their purchase to the retailer." Right. We know who that leaves.
There you have it. Microsoft is way behind Apple and RIM, so it makes a not-too-expensive buy of an innovative company. But how do these players fit together? What value does Danger really add to Microsoft, since even retaining the programmers is not certain?
The more I think about it, the more it irks me, both as a commentator and a (very small) Microsoft shareholder. We all know that Microsoft is racing to catch up with a raft of nimbler competitors as the desktop becomes less significant to the computing world. It's probably not a lot of money, but it could be a distraction -- and even chump change should be spent well.
I welcome your comments, tips, and suggestions. Reach me at bill_snyder@infoworld.com.