February 12, 2007 4:00 AM PST

Newsmaker: Bach answers the call at Microsoft

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newsmaker It took Microsoft quite a while to get going in the phone business, but Robbie Bach is convinced the software maker has made the right call.

The initial Windows phones were clunky and quirky, but Microsoft has kept at it, winning support from key carriers and device makers. It scored a major coup in 2005, when Palm announced it would start selling Windows Mobile-based Treos. Microsoft's software has since found its way into other must-have gadgets, such as Samsung's BlackJack and T-Mobile's Dash.

In an interview ahead of the 3GSM World Congress trade show in Barcelona, Entertainment and Devices unit President Robbie Bach talked about where Microsoft is going in the phone business. He touched on the new Windows Mobile 6 operating system, which makes its debut at 3GSM.

Bach also offered his thoughts on Apple's iPhone, Steve Jobs' call for an end to digital rights management and explained why a Zune phone may not be right around the corner.

Windows Mobile 6

Q: Apple has gotten a tremendous amount of buzz with the iPhone. I'm curious what you make of it.
Bach: Apple always brings interest to an area, and certainly, this isn't any exception. Certainly, a $500 phone is a proposition that some set of early adopters will want to take a look at. There are a lot of people who are Apple fans that will want to take a look at it. $500 plus a two-year sign-up really puts you in a certain marketplace.

The other thing I'll say about it is their strategy is quite different from ours. Our strategy focuses on helping you bridge the things you do in your work-style and the things you do in your lifestyle. If you think about Windows Mobile and the work we do integrating with mail and Exchange, while at the same time providing people with multimedia capabilities, text messaging, our Windows Live services, search, etc., we kind of span that view. Apple comes at it more from a pure lifestyle perspective.

There is certainly a market for that, but we think the bulk of the market is people who want a phone that does things both for their work-style and for their lifestyle.

One of the specific things about the iPhone is the fact that it is all touch screen. Prada and others are trying this too. Are buttons passé?
Bach: No, actually. I think it's a reasonable question whether touch screens or buttons are a better approach. We've had touch screens on Windows Mobile for three or four years.

Listen up

Microsoft on iPhone Robbie Bach, Microsoft's entertainment and devices unit president, comments on Apple's phone.

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Microsoft phone? Bach discusses the possibility of a Zune phone.

Download mp3 (448KB)

DRM's future How does Microsoft feel about Steve Jobs' call for an end to DRM? Bach responds.

Download mp3 (504KB)

Depending on what you want to use the phone for, sometimes touch screen is a good thing, sometimes it is not. The experience we've had with people who want to type (is that) touch screen actually tends to be a little difficult. People tend to prefer the tactile feel of doing buttons.

Likewise, if you are going to do a lot of video on a device, having a screen that's constantly got your hands on it--constantly getting pounded--may or may not be the right thing.

I think it's an open question. Certainly, the touch screen gives you a little more flexibility, in the sense that you can project on that screen whatever you want. There are tradeoffs you have to make. We'll have both on Windows Mobile, that's for sure.

I'd be remiss if I didn't ask your thoughts about Steve Jobs' letter. Is it time for an end to digital rights management?
Bach: Our job really is to provide the tools and the technology that we get requested from our operator partners and from our media and content partners. I don't have a strong view about DRM, other than when people ask for it, we're going to do a great job implementing it and driving it.

The only people who ultimately get to opine on that are the people who are the content owners themselves. We're huge believers and will always be believers in protecting intellectual property. DRM is certainly one of those ways to protect that intellectual property. You are going to see us continue to do great work on DRM, because we think it is going to be a part of the landscape going forward.

Microsoft is announcing Windows Mobile 6 at the show. Why is this release important for Microsoft?
Bach: If you look at the progression of our business in the Windows Mobile space, we've now reached a critical milestone. We've gone from being a small provider with a few handsets and a few operators to--we have now almost 50 operators and almost 150 phones. That business is growing quite well.

What do you see the role of gaming on the phone? Is it just casual games, or is there an opportunity for more? If so, what does that "more" look like?
Bach: Generally the assumption--and I think it is probably right--is that this is this will tend to be more casual, broad-based games. Games that I am going to spend 5, 10 minutes on; not games I am going to spend 5, 10 hours on.

The final thing you have to say is, "OK, what's the business model? Is this a subscription, is it a paid-for download? Is it an advertising-based model?"

This is a place where I don't think there's a lot of consensus yet. I think the marketplace is still evolving a reasonable amount. It's not like in the PC gaming market, or in the console gaming market, where we have an established model--You go out and pay $49 or $59 for a game, you take the package home and put the DVD in. It obviously doesn't work that way. The operators are involved, and there's more people involved in the ecosystem. I think the business model part is, in some ways, the most challenging. How much absolute dollars are there to flow around?

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Add a Comment (Log in or register) 79 comments (Showing first 20 comments)
A refreshing perspective
by hawtdog February 12, 2007 6:50 AM PST
First, I'm a huge Apple guy. But, I must say it was nice to hear someone from the dark-side actually say that Apple might be after a different market. Whether or not that's true remains to be seen, but in the ever raging Microsoft/Apple war it was nice to hear someone not just denigrate the competitor at every moment possible. Sure, the company he works for is pure evil, but at least he can play nice in interviews.
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great job implementing it (DRM) and driving it.
by robintontx February 12, 2007 7:57 AM PST
Guess that is why I still can't activate the DRM (In Microsoft Reader) on my Windows Mobile 5 based phone so I can read the encrypted e-books I mistakenly purchased a few years back.
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whats the bigg deal
by redrasys February 12, 2007 8:00 AM PST
Personally, i dont understand what the big deal is with the iPhone. Agreed, it has the coolness factor and all, but i am really really happy with a smartphone i bought for $100 - unless i have lot of money in bank that i am pondering what to spend it on, i am not going to buy a $500 phone just for the coolness factor. i need productivity tools and my tmobile dash goes beyond expectations there. Coolness works for a mp3 player, but not for a work/life device like cellphone. Bach is right, but i guess time will tell.
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DRM
by phantomsoul February 12, 2007 8:29 AM PST
...is a criminal practice and those who sell content encoded with it should be sued for violation of basic consumer rights. Period.
Reply to this comment
Two things
by rapier1 February 12, 2007 9:13 AM PST
1) Is that how this exec dealt with Apple is very interesting. He
wasn't dismissive, angry, or even attempting to 'sell' his product
by bashing Apple. Apple execs, on the other hand, often work in
some dig at MS and other producers. Its good to see someone
acting like an adult.

2) The story mentions that when MS started out in the phone
business they didn't have many people behind them and they
had horrible sales. However, they kept plugging away at it and
each iteration took gained more and more market share.
Basically it underlined that MS is dogged in its persuit of its
goals and even initial failures are just seen as a stepping stone.
They have the resources to persue a strategy for years and years
and can afford to make mistakes on the way. Other companies
are in a more fragile position and one big failure will have a
devastating impact. Which I think helps explai what is happening
in point 1.
Reply to this comment View all 3 replies
iPhone = iPod+Phone+Internet
by Llib Setag February 12, 2007 12:46 PM PST
(i.e. It can be used for Business too!)

Ballmer: How are you going to use the iPhone for business when it does even have any keyboard keys?

GUI touch screen system...keyboard is part of GUI & has auto correction during typing.

iPhone can auto-sync all your internet & personal contacts from a PC or MAC computer and email / calendars sync too. Works with Microsoft Exchange Server via Mac OSX. ( so, once again WORKS FOR BUSINESS TOO!)

Don't you love how MS is attempting to paint the iPhone as just "another lifestyle choice device from that toy computer maker Apple",
but MICROSOFT, well THAT'S for serious business people...

Get the facts from the source...

http://www.apple.com/iphone/

http://events.apple.com.edgesuite.net/j47d52oo/event/
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All the typical Microsoft BS
by Hardrada February 12, 2007 1:03 PM PST
Microsoft's strategy: "we'll keep plugging away until we get it right". They should use this as an advertising slogan. "Windows Vista. It's crappy, but we'll keep plugging away until we get it right."

And his comments regarding DRM also show a complete lack of vision or leadership. I guess that Microsoft is not really interested in selling either the Zune of music. Either that, or they believe that consumers are so stupid that they will just buy whatever Microsoft gives them.
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Zune Phone
by t8 February 12, 2007 1:51 PM PST
Funny. Nobody wants a Zune, so why would there be a market for a Zune Phone?
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I don't know either
by taoman1 February 12, 2007 1:53 PM PST
but Zune is a distant second to the iPod. Second place means some people want it.
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Pretty persuasive argument
by Mister Winky February 13, 2007 2:03 PM PST
Thanks for enlightening us with, well, nothing at all. Can you please reference a popular enterprise-class smart phone that can't sync with Exchange or Notes?

-Mister Winky
Reply to this comment
Microsoft's Mission Statement, right there:
by Penguinisto February 17, 2007 5:18 PM PST
[i]"Our job really is to provide the tools and the technology that
we get requested from our operator partners and from our
media and content partners."[/i]

...notice how the word "customer" is lacking? Quite telling, one
must say.

I'll stick with OSX and Linux, thanks.

/P
Reply to this comment View reply
Apple iPhone Ad!
by Llib Setag February 26, 2007 5:32 PM PST
http://www.apple.com/iphone/hello/
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