Andy Lees

With a new mobile app store, a new mobile-synchronization service and a new version of Windows Mobile for touch screens, Microsoft's announcements at the Mobile World Congress in Barcelona today felt at times like a case of keeping up with the iPhone.

That's the first subject I raised during an interview last week with Windows Mobile chief Andy Lees, the senior vice president in charge of the company's mobile communications business. Read on for his response, his explanation of how Microsoft's application store will work, and his thoughts on the future of Windows phones.

Q: You're making a series of announcements at Mobile World Congress. Do you feel at all like you're playing catch-up?
 
Lees: No, I think certainly we've been very successful in Windows Mobile, historically. We've been gaining share, last 12 months we've gained share, we've had more than 11 devices at a million units each. Sold more than 20 million copies over the last 12 months, so things are going well for us.

I think we do see that we are shifting to make sure that we're covering business and consumer scenarios. And I think that we actually have got a leadership position in many of those things elsewhere. Given that, what we want to do is make those scenarios really work. There are 430 million Windows Live users. Making it so that they get a great mobile experience. And then connecting them together on scenarios like photos. That whole software plus services really enables new scenarios.
 
Photos is the No. 3 usage of mobile phones, and yet most people can't get the pictures off their device. So by having things like My Phone, things automatically go up to the Web. If I want to go through and share them, I can pick and choose very easily. I can go fix the red-eye and then post it back in which case the red-eye gets fixed back on the device. There's lots of scenarios and you're going to see us do more of those scenarios because the phone isn't the end point. The phone is absolutely your window on your digital world.
 
Q: One of your announcements is Windows Marketplace for Mobile. Obviously Apple has its App Store. How will you differentiate your offering?
 

Lees: Well, the store is going to leverage the broad ecosystem of applications that we have. There's going to be time to migrate them. We've historically let the ecosystem promote the ecosystem. Handango, if you go on there, you do a search on Windows Mobile, you get a list of 21,000 different applications that you can have, so over time we see some of those things will therefore go into there. The thing that differentiates is the platform and what you can do with it. Therefore, over time, as more applications pour into there, I think you'll see a larger and larger differentiation.

Q: Based on what? What about the platform will create that differentiation?
Lees: If you look at the platform, the tools that we have around the platform, the fact that it's common with the PC means that you can write very rich applications very easily. You can take code that you already have and move that onto the phone very easily. As a result it's much easier to have broader and richer types of applications.
 
Q: Why didn't Microsoft do a mobile application store sooner?
 
Lees: Certainly on the PC side, having the ecosystem promote the ecosystem has been very successful. If it wasn't for that, things like Amazon wouldn't exist, because they're the ecosystem promoting the ecosystem. The fact that you have Amazon and eBay, which are different ways of selling stuff to people. Craigslist, all of those things.
 

Allowing for that diversity (on the mobile phone) has been a very powerful thing. If I decided to go get an application, or if I'm an IT guy and I want to load an application, I can do that. We'll still continue to do that. That's very different from Apple's strategy – they won't let you do any of that. We'll continue to do that. And, also, we wanted a convenient way that if you are a developer, you can say, well, on every device, people don't need to figure out where to go. There is also a place that's always there. So it's in addition to what we've been doing, not a replacement to what we've been doing.
 
Q: On the marketing side, how are you going to create more awareness for Windows on phones? know that's the new name you're using, right?
 
Lees: Right, Windows phones.
 
Q: What are you going to do?
 
Lees: Well, we'll do a number of things from what in marketing terms would be called above-the-line, demand generation, advertising, that type of thing, both ourselves but also importantly with our operator and OEM partners, and therefore I think the total amount of focus on Windows Phones will be multiplied in many respects.

That will go from that advertising right the way through to when I go into a store. We want to work with the people who provide stores -- so in the U.S. that's a lot of the operators, but could be Best Buy, could be other places – to have clearly signposted 'Windows phones' and even on the device itself, all of the Windows phones will have a flag on them, so if you want to go through and pull up the Start menu, you've got a button that's dedicated to do that, and that has the nice side effect of you'll be able to look at any phone and immediately be able to tell if it's a Windows phone or not, even if it's switched off.

The button has got the flag on it, which is the Windows flag, which is a very recognized brand attribute.
 
Today a lot of people that use phones that run Windows Mobile don't know. They say, oh, I have a Samsung Blackjack 2. Or I have an HTC Touch Diamond. But they don't say that they have a Windows phone. We want people to be able to say, 'Oh, yeah, I have a Windows Phone. Mine is an HTC Touch Diamond.' 'I have a Windows phone, I have a Samsung Blackjack 2 or a Samsung Omnia,' or whatever it is. I think that really helps distinguish between the two, and it's something we really haven't done before.

Q: Why drop the Mobile?

Lees: When you walk into a store, you want to have it very simple, just walk in, 'I want a Windows phone.' If you say I want a Windows Mobile, do you say I want a Windows Mobile Phone, and if you do, does that run off the tongue? If it's a phone, obviously it's mobile, it's sort of redundant. I think part of the original thought was, because it does so much more than a phone, there was this thought a while ago to say that we were trying to educate people by calling it a Windows Mobile device, to say that it's more than just a phone.

I think now the expectations of a customer on phones is that they do a lot more than just making calls. Remember that we started this back in 2000 or something like that, so we've been doing this a long time. We had the first touch support on a phone, so we've been doing a lot of things for a long time.

Q: One of the interesting pieces of news recently was the announcement of Microsoft stores. What presence will Windows Phones have in those stores?
 
Lees: One of the things that it's sometimes difficult to do is to see what happens if you have Windows phones and Windows PCs and Windows Live and how they work with the choice of different hardware, whether that's PCs or phones. What sort of scenarios. So those stores are there in order to show off those capabilities. I don't think it's the primary way that we will sell Windows phones or Windows PCs or people will start to use Windows Live even. I think that will continue to be the very vibrant ecosystem that we have but I would say that it's really a showcase about how those things really can come together.

Q: The economy is not what it was. That's an understatement. How do you envision that affecting Windows Mo – Windows phones?
 
Lees: Windows phones, thank you. I think a number of things will happen. I think, one, customers will be more careful about which phones they choose. I think they may end up buying slightly less if you believe the market predictions. Smart devices are going to still increase to be a higher and higher percentage of phones.

Whatever prediction you see as to what's going to happen in the mobile phone market, a higher proportion of them are going to be in smart phones, and that's because people want these scenarios that we're talking about, and the price points are falling. Those things will happen irrespective of what happens of the total number. For us, that's a good trend, that's a good thing. It is an enabler for us, on which we can build.
 
I think for operators and OEMs, they have to make more choices. I think that an operator may decide to arrange less phones. They want to offer services, and they'll have less money available to choose what development work they do on which platforms in order to deliver those services to their customers.

I think that's true for OEMs as well. There's been a number of OEMs that have announced their intentions to do that – to say, 'Hold on, I've got too much complexity. I'm going to simplify what I'm doing, and as a result, I'm going to put more of my resources (into a single platform).' The LG announcement is in some ways a reflection of that.

Q: One of the things Steve Ballmer has been public about is the idea of applying the Zune software to Windows Mobile, just in terms of expanding the interface. How will that work?
 
Lees: We haven't announced that. I don't think we've announced that.
 
Q: OK, fair enough. Is that Pink?
 
Lees: (Laughs.) We haven't announced anything called Pink. either.

Q: One of the things you have in Windows Mobile now is Flash Lite. That's a competitive differentiation for you. How do you see that playing out competitively?
 
Lees: What people really want is PC-style browsing on the phone. … There's all these stats whereby if you tell users, go to the most popular sites and do something, they have this success and failure rate of whether they can do it on different mobile smart phones. With Internet Explorer, our rendering, how the UI looks, it is much more accurate to the PC because it's the PC browser.

Then, by including Flash Lite in there, it also helps if you have a Flash site. Some of them use Flash actually as core navigation and functionality. So it's not all eye candy. If you go to a site like that, at least you can go find the information and interact with it. The bigger news isn't about Flash Lite, the bigger news is about getting PC-quality browsing on your phone.