Smart, or just stung?

Microsoft’s Smartphone 2002 operating system, formerly code-named Stinger, is finally ready for action after years in development. For nearly a decade, Microsoft has been looking for recipes to give it a bigger chunk of influence in the telecom industry. While Smartphone devices will appear in Europe within months, it could be a year or more before the system lands in the U.S. market, and it remains to be seen whether Smartphone will make a big impact.

Though some people may think success is a given for anything new released by the world’s largest software company, there are a few hurdles in Microsoft’s way this time. For starters, Microsoft has failed to eliminate it primary competitor, Symbian Technologies, in the next-gen phone operating system race. In fact, while many wireless device manufacturers plan to make phones using both the Microsoft and Symbian operating systems, the world’s two largest phone vendors, Nokia and Motorola, have so far balked at implementing Microsoft's Smartphone.

Also, the path of acceptance for many of the applications encouraged by Smartphone is less obvious than the wireless industry would have hoped by now. Digital photography, for instance, is in its market infancy, and while intriguing, it hasn’t carried off quite like a Barry Bonds homerun. Potential acceptance of such applications will likely factor heavily into how quickly U.S. carriers will begin selling Smartphone devices.

In addition, the industry Microsoft is looking to invade simply no longer looks like the surest segment of the telecom industry. Wireless vendors have seen revenues dive, and carriers are experiencing some of their worst subscriber weaknesses in the wireless market’s history. While the wireless market is exponentially larger than it may have been ten--or even five--years ago, there are fewer competitors, and they tend to be miserly in how they expand availability of new services and devices. The market pie could be smaller and more over-baked than Microsoft had hoped.