Microsoft replays Zune design for phone comeback

February 16, 2010 at 12:00a.m.

BARCELONA, Spain (AP) — Apple Inc. rocked the wireless business by combining the functions of a phone and an iPod. Now, more than two years later, Microsoft Corp. has its comeback: phone software that works a lot like its own Zune media player.

The software, which was unveiled Monday at the Mobile World Congress, is a dramatic change from previous generations of the software that used to be called Windows Mobile. But Microsoft is, for now, sticking to its model of making the software and selling it to phone manufacturers, rather than making its own phones.

Microsoft’s mobile system powered 13.1 percent of smart phones sold in the U.S. last year, according to research firm In-Stat. That made it No. 3 after Research In Motion Ltd.’s BlackBerry and the iPhone. But Microsoft has been losing market share, while Apple and Google Inc.’s Android gained.

All the while, the market is becoming increasingly important. People are spending more and more time on their phones, and the devices steer people to potentially lucrative Web services and ads.

Phones with the new software will be on the market by the holidays, Microsoft said. All four major U.S. carriers will offer phones, just as they sell current Windows phones.

The new ones won’t be called “Zune phones,” as had been speculated. The software will be called “Windows Phone 7 series.”

Forrester Research analyst Charles Golvin said the new software looked promising, but that it was also Microsoft’s “final chance to get it right.” He notes that those who have current Windows phones don’t seem excited about the brand — many of them believe their phones are made by Apple or Nokia Corp., according to his firm’s research.

Andy Lees, senior vice president of Microsoft’s mobile communications business, said Windows Mobile suffered from the company’s chaotic approach to the market. The software maker gave phone hardware makers and wireless carriers so much freedom to alter the system and install it on so many different devices that none worked the same way.

As a result, while other phone vendors such as Apple linked their hardware and software tightly to ensure a better experience, Windows Mobile might not have looked like it quite fit on a certain handset.

With the new software, “We really wanted to lead and take much more complete accountability than we had in earlier versions of the Windows phone for the end user experience,” CEO Steve Ballmer said at the Barcelona launch event.

Microsoft is imposing a set of required features for Windows phones. Manufacturers must include permanent buttons on the phone for “home,” “search” and “back”; a high-resolution screen with the same touch-sensing technology as the iPhone.

; and a camera with at least 5 megapixels of resolution and a flash. Hardware QWERTY keyboards will be optional.

A test device from Asus, which Microsoft used to demonstrate the new phone software for The Associated Press in Redmond, Wash., also had a front camera and a speaker.

The iPhone’s success has spurred lots of look-alike phones with screenfuls of tiny square icons representing each program. Just as it did with the Zune, Microsoft has tried to avoid an icon-intensive copy of that setup. Instead, it relies more on clickable words and images pulled from the content itself. For example, if you put a weather program on the device’s home page, it shows a constantly updated snapshot of conditions where you are, rather than a static icon that you have to click in order to see the weather.