Microsoft bets on making "dumb" phones smarter

Posted by: Reena Jana on August 24, 2009

Microsoft today announced a new phone app service—not for smartphones, but instead for the world’s cheapest and low-tech handsets. Called OneApp, the software was developed by Microsoft’s Unlimited Potential Group, which researches technology that can be used by poor people living in emerging-market nations. OneApp allows consumers with existing, non-smartphone devices to access Web sites such as Twitter, Facebook, in an efficient way.

OneApp’s been engineered to not require much in terms of data usage and memory; it runs only one individual application at a time. The graphics are lower resolution than those in iPhone apps. The phones running OneApp don’t need to eat up as much energy running the mini-software programs, either, according to Amit Mital, who heads the Unlimited Potential Group at Microsoft.

Why is Microsoft investing in making “dumb” phones smarter?

For one, the market for these phones is huge. Think about India alone: according to market researcher Gartner, mobile-phone market penetration in India is predicted to jump from 38.7% in 2009 to 63.5% by 2013. Gartner analysts say that this is mainly due to a focus on the rural market, more local Indian companies entering the sector, and the increased availability of cheaper phones. “The basic, or ‘feature’ [mobile] phone market as it’s known, is one with billions of customers,” says Mital. “Today, 'feature phones' are more common than smartphones. But there is a demand for apps, which are hard to find for these 'feature phones.'”

Two, Microsoft wants to introduce users of relatively low-tech mobile phones to Micrsoft’s “cloud” computing services via their handsets, which in essence the OneApp program does. This would increase its market share in this area.

Three, much of Unlimited Potential’s developing-world research eventually “trickles up” to mainstream products for the developed world. Consider the launch earlier this year of a simpler version of Windows, based on Microsoft’s Starter Edition for Windows, once available only in emerging markets, but now available worldwide on netbooks. Mital can't talk about how OneApp might affect Windows Mobile software in the developed world. But imagine how some design and engineering elements, such as sleeker, simpler on-screen graphics or the ability to deliver apps without eating up data usage, could come in handy when designing software for developed-world audiences, too.

Four, Microsoft also wants to be influential in the promotion and use of so-called “mobile wallets,” or turning the phone into a purchasing or banking tool. So OneApp will first be available in the next couple of weeks in South Africa, via Blue Label Telecoms, known for its mobile-wallet offerings. “BLT is already doing a lot in phone payments,” says Mital. “We saw this as a good fit for a partnership.”

Finally, Microsoft will open up the software developer’s kit for OneApp, making it possible for anyone in the world to create apps for these basic phones. The launch of OneApp will feature about a dozen free apps, but soon programmers and entreprenurs in both emerging and mature markets can potentially find new revenue streams if they charge for their apps.

Sure, smartphones like the iPhone and the BlackBerry might be the fastest-growing segment in the mobile-phone space—up 27% worldwide from last year, according to Gartner. But for those who can’t afford smartphones, and for those who are enterprising enough to capitalize on a surprising new market, yesterday’s “dumb” phones might just look like a clever new way to ride the app wave.

Reader Comments

tyler nguyen

August 26, 2009 1:06 AM

Great article. Microsoft might be on to something big here. I got to give credits to Microsoft here; possibly a start on their goals to increasing market share within the mobile market.

anjan kumar

August 26, 2009 1:33 AM

its a grea t news that microsoft is entering in mobile phones market specially seeing the indian market.
we are waiting for the phone to launch

Abhijit Bera

August 26, 2009 2:50 AM

This is a short-sighted and desperate attempt by Microsoft to grab the mobile market.

Such software already exists: http://www.snaptu.com

This strategy will fall flat on its face for the following reasons:

1) Low end phones have slow GPRS connections. I don't see how users will be able to take 'advantage' of the 'cloud' over such slow connections.

2) Mobile hardware is getting cheaper and more powerful everyday. So these so called feature phones will be scrapped once 3g enabled smart phones are available at lower prices. We will see this happening within next year once 3g services take off in India.

3) Microsoft underestimates the aspirations of people living in emerging markets like India.

gerrrg

August 26, 2009 6:29 AM

I remember when I had a dumb phone, I didn't want to access the net because of the per minute charges. Now that I have a smart phone, I have a fixed plan with unlimited data.

Bearing this in mind, it seems somewhat bewildering that, assuming at best, rural and poor areas (like the majority of China) operate on 2G networks, even with a low-data requirement, the fact is, it'll still take time and cost money to access the internet. And if you're watching every change like I was when I had a really dumb phone, are you going to concern yourself with accessing the internet, charged per minute, on a 2G network?

I think not.

anil tirunagari

August 26, 2009 9:34 AM

the numbers look big on "dumb phones" side right now but here is what some smart guys think (read google). always build software for the power user and the rest will follow as they will adopt quickly and seed it further. So building software for rural users might just not work. Second, with free mobile OS like Android and now Symbian, the smartphones will become $100 and less in some quarters. that will simply force ppl to shed the dumb phones real quick. so, microsoft might be barking up the wrong tree.

Charles Lowery

August 26, 2009 2:21 PM

This is a potentially foolish move by Microsoft. If you're too poor to be able to afford a smartphone then you're too poor to afford data over cell phone networks.

However, if most users in these countries do not have computers in their homes and public computers are hard too acces then it might be a viable option for people.

Tough to judge when working in foreign cultures.

Open ur mind

August 26, 2009 3:23 PM

People seem to underestimate the potential and scope of low end phones. I have been in India and can understand scepticism over one-app since in India GPRS is still expensive (though last I heard it is Rs 99 / month unlimited for prepaid on vodafone). That being said countries like S.A. have a huge percentage of low end phones with very high degree of GPRS usage. The one app platform will allow the same application to work on a low-end mobile phone and a high-end windows mobile phone. Also constructs like saving data on cloud can be applicable and useful for high end phones as well. I see this as a great step to tap a potential market who might end up becoming familiar with 'live' and 'windows' before they move to high end devices. If these people continue to use microsoft services, microsoft has won its battle.

Jay

August 26, 2009 9:04 PM

The SDK is the key to OneApp's success. Microsoft needs to make it as easy-to-use to use as possible so that people who do not program on a regular basis can easily applications that are relevant to them.

Pradeep

August 27, 2009 1:46 AM

Good effort for taking off the telecom market but still a long way to go because at the same time none of the other companies are going to sleep.

Vik

August 27, 2009 4:08 AM

I dont see how OneApp is going to target the rural india, because rural india still have low end phones without even the basic GPRS!

If one can come out with something to target such phones it will be a breakthrough!!

Blue Swan

August 27, 2009 1:33 PM

MS is a dead horse. Linux is already doing these things and can be tailored by the hardware manufacturers. There's no more place for one size fits all OSes.

WEKetchum

December 19, 2009 10:51 PM

I'm just glad there's a company that's addressing the people who don't need devices like iPhones, Blackberrys, and more that charge an extra $50 per month to do everything outside of just talking on the phone. People don't really need the crazy data plans like that...they just wanna be able to make a call and have a lil fun, instead of carrying an office in their pocket.

I made a list of dumb phones for anyone that wants to check it out (http://www.urbaneapts.com/urbanereflections-blog/?p=3066), but I like the direction that Microsoft is going with this.

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