Microsoft Taking Fire Over Mobile Strategy

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Oracle CEO Larry Ellison says companies that control both hardware and software have distinct advantages over companies such as Microsoft that have chosen to follow a software-only path.

In a recent interview with Reuters, Ellison said Oracle doesn't plan to get out of the hardware business if its $7.4 billion acquisition of Sun Microsystems passes regulatory muster. Acknowledging that hardware is a low-margin business, Ellison noted that Apple and Cisco Systems have managed to overcome this through solid design and tight integration of hardware and software.

"If a company designs both hardware and software, it can build much better systems than if they only design the software. That's why Apple's iPhone is so much better than Microsoft phones," Ellison told Reuters.

Ellison's comments are interestingly timed. Microsoft has long insisted that its strategy of providing a software platform for third-party device makers offers customers the best range of choices. But the iPhone and BlackBerry are showing that the proprietary software-hardware combination can result in devices that make consumers drool.

Windows Mobile has a solid footing in businesses, but Microsoft desperately wants to make it more attractive to consumers. However, repeated delays in Windows Mobile development have caused Microsoft to fall behind in the smartphone market.

Microsoft's stealthy, consumer-focused 'Pink' smartphone project, which Microsoft is developing in conjunction with a third-party device maker for Verizon Wireless, is said to be in trouble because of its ties to Windows Mobile 7, which has been delayed until at least spring of 2010.

Microsoft is expected to finally release Windows Mobile 6.5 next week at its TechEd show in Los Angeles. But Andrew Brust, chief of new technology at New York-based IT consultancy twentysix New York, says he has already lost interest in Windows Mobile 6.5.

"The menus are clunky, the intermittent pauses are maddening and the fact that the iPhone has eclipsed Windows Mobile in terms of developer community and software availability is really sad to me, because a developer ecosystem is Microsoft's hallmark," he said.

Brust is holding out hope that Microsoft will deliver something special and right the ship with Windows Mobile 7. "Hopefully they'll control the hardware and have a much tighter agreement with their carrier or carriers," Brust said. "Right now, the three-way finger pointing contest between Microsoft, OEMs and carriers over Windows Mobile is abysmal."

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