Commentary

Free Mobile Phone And Search For All (Not)

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Microsoft tore a page out of Google and Apple's books, giving every employee, a Windows 7 mobile phone. Reports suggest the official count at around 87,000 people worldwide. The announcement was made at the Microsoft Global Exchange (MGX) conference in Atlanta. And if the news, tweeted on twitter by employees, sounds familiar, it should. Last December a Google employee started a Twitter firestorm after tweeting that every Google employee would receive a Nexus One. Apple also gave employees an iPhone.

  Microsoft's marketing tagline, "Be What's Next," attempts to position Microsoft as the cutting-edge technologist that links together Xbox, Windows, Office and Bing. The Redmond, Wash., company also announced the tagline at MGX. A video spotted on YouTube caused a stir Thursday morning, the day the company plans to release Q2 2010 earnings. And the key bottom-line driver for the company, the Windows 7 software, according to some analysts.

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  Frank Shaw, Microsoft's corporate communications lead tweeted "hey all MGX folks, just remember that this is an internal event."

  Greg Sullivan, senior product manager for Microsoft, says to expect handsets from Dell, Asus, LG, HTC, and Samsung at the launch later this year.

Microsoft's news takes me back to a business model I've been thinking about for years: Free phones for all. The handset makers supply the carriers, which provide free phones for all. Consumers would pay a reduced monthly service rate, receive a free smartphone of choice, but would need to watch ads in exchange.

The mobile ad market in the U.S. will reach $593 million this year, according to eMarketer estimates. The firm suggests location-based ads have the highest response rates, though few mobile users have seen them yet.

  A few other insights suggest reaching younger consumers has challenges. For example, young adults keep a firm grip on their always-on and connected mobile devices. That means many see their mobile phones as personal. They are not ready to welcome marketers to the channel, according to eMarketer, citing a study from Ball State University.

  Microsoft's phones running Windows 7 are expected to have a dedicated search button with one-click access to Microsoft's Bing search engine, an integration of the Zune digital media player, an assortment of Xbox Live games, and a set hubs dedicated to People, Pictures, Music and Video, Games, Office and its App Store.

  Does this help Yahoo? That will depend on whether Bing powers Yahoo's mobile search, in the U.S. or worldwide.

  The research firm iSuppli, based in El Segundo, Calif., lays out the top five smartphone manufacturers in terms of units shipped in Q1 2010 with No. 1, Nokia; No. 2, RIM; No. 3, Samsung; No. 4, Apple; and No. 5, HTC. In total, the firm estimates worldwide units shipped for the top five brands will reach 322 million in 2011, up from 247 million in 2010 and 182 million in 2009.

By 2014 units shipped for the top five will reach 508 million, but as much as I would like to believe mobile advertising has begun to take off, I'm not sure these numbers have gained enough to make a dent in mobile advertising and search.

 

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