Bloomberg News

Microsoft Promotes ‘Phablets’ After Smartphone, Tablet Misfires

October 14, 2013

Windows Phone Software

Windows Phone’s 3.7 percent share of the smartphone operating system market in the second quarter compares with 79 percent for Android and 13 percent for iOS, according to IDC. Photographer: Tomi Setala/Bloomberg

Microsoft Corp. (MSFT:US) unveiled Windows Phone software for smartphone-tablet hybrids as well as more powerful chips as the company plays catchup to Google Inc. (GOOG:US) and Apple Inc. (AAPL:US) in mobile devices.

A bigger start menu with higher-resolution displays will enable the software to run on phones with five- and six-inch screens for the first time, Microsoft said today in a blog post. The update to Windows Phone 8 will roll out to developers tomorrow and customers in the coming months.

After losing out in smartphones and tablets to Google’s Android operating system and Apple’s iOS software, Microsoft is trying to appeal to consumers in the middle. Global shipments of so-called phablets will more than double to 60.4 million this year, research firm IHS predicted in January. That’s a fraction of the more than 1 billion smartphones researcher IDC expects to be shipped.

Nokia Oyj (NOK1V), which is selling its handset unit to Microsoft for $7.2 billion, released a promotion for its Oct. 22 Nokia World event, featuring an image of a phablet. Microsoft, based in Redmond, Washington, is acquiring the business in a bid to jumpstart its phone efforts while also trying to lure other manufacturers to its mobile operating system.

Windows Phone’s 3.7 percent share of the smartphone operating system market in the second quarter compares with 79 percent for Android and 13 percent for iOS, according to IDC. Windows Phone is faring better in Europe and Latin America than in the U.S., Greg Sullivan, a director in the division, said in an interview.

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Terry Myerson, head of Microsoft’s operating systems unit, tried to reignite HTC Corp. (2498)’s interest in Windows Phone last month, said people familiar with the discussions. He offered to cut or eliminate the license fee to make the software attractive as a second option on handsets with Android, said the people.

Chief Executive Officer Steve Ballmer and other executives met with handset makers during a trip to Beijing to try to line up new partners and shore up current agreements, said a person with knowledge of their trip.

As part of today’s announced update, Microsoft said Windows Phone will support Qualcomm Inc.’s (QCOM:US) Snapdragon 800 chip with four cores, a processor being used in some upcoming Android gadgets. Microsoft also added a feature called driving mode, which keeps users from texting or dialing while behind the wheel.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net;

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net;


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