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Microsoft unveils Windows Phone 7 handsets

Success of OS 'key to Microsoft's position in mobile'

Microsoft will unveil handsets running its new Windows Phone 7 operating system for the first time today at an event in New York.

There's an app for that?

Microsoft is not saying how many applications will be available to WP7 through its online Windows Phone Marketplace. The question is an important one, since too few could spell disaster, Llamas said, pointing out that the Palm Pre launched in 2009 with only 32 applications.

"Microsoft deserves congratulations for 300,000 downloads of the developer tools, but I would hope they have more than the 32 apps that Palm Pre had," Llamas said. "They need a goodly number, although I don't expect 100,000."

The biggest concern for WP7 has a lot to do with marketing and convincing buyers that it can be distinctly different from the iPhone or Android devices, Llamas said.

Most of the preview videos of the interface show that WP7 is cleaner, but buyers will also note that WP7 offers a touchscreen of about the same size as an iPhone, with a virtual keyboard that could well be an iPhone's.

The hubs and tiles concept could resonate well as a way to present access to pertinent information right from the home screen, analysts have noted. (The tiles are actually running with real-time information on a home screen, without the need to open a full application, for example.)

Llamas also said that Microsoft will benefit from having its installed corporate base from the Windows desktop and Windows Mobile. That will include WP7's allowing access to corporate email through Exchange and a variety of security protections.

Still, there appear to be many things about WP7 that are similar to other smartphones. "How is WP7 differentiated from Apple and Android and BlackBerry?" Llamas asked. "What space is Microsoft carving out? That is the multibillion-dollar question for Microsoft."

What are WP7's chances of success?

Today, the Windows Mobile OS gives Microsoft a 6.8 percent share of the global market for smartphones, a share that IDC expects will rise to 9.8 percent by the end of 2014 with WP7 and future generations.

That will put Microsoft in fifth place in 2014, which might sound unimpressive except that smartphones sold by all vendors will double in number, exceeding more than 500 million in four years, Llamas said. Gartner has been more pessimistic about Windows Phone's success, saying it will only command 3.9 percent of the market by 2014.

"What will constitute success for WP7?" Llamas asked. "Would it be a million sold in three days like Apple? No. Will WP7 turn heads? Yes, I think so. But this is not going to be an overnight sensation. It will take a lot of seeding and grooming by Microsoft,so look for them to do a very convincing marketing campaign. Marketing really matters at this point."

See also: Windows Phone 7 handsets won't support tethering

Microsoft: No Windows Phone 7 for tablets

Video: Microsoft unveils Windows Phone 7 handsets

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