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MS Should Deliver a Handheld Entertainment Device

April 14, 2006 at 12:40 am · Tagged , , , , and ·   Comments (2)

           
The impending availability of .NET Compact Framework on the Xbox got me thinking: Microsoft really ought to deliver a handheld entertainment device that supports games, music, and video. Between Apple’s iPod and Sony’s PSP, Microsoft is clearly missing the party. Why not join in with a device of their own?

Now, while this was a moment’s idle fantasy on my part, it turns out The Mercury News has a fairly lengthy March 20, 2006 article suggesting that just such a move is actually in the works. Read it here: “Microsoft’s Plans For Handheld Game Player And iPod Killer”. Unnamed sources only, but I recognize the names mentioned and to me it rings true.

So why would Microsoft do this, seeing as how they’ve purposely stayed on the sidelines until now?

(1) MS has nothing in its stable to compete with Sony and Nintendo’s gaming devices. Yet the growth in gaming devices is currently in handhelds. Chris Nuttall of the Financial Times writes, “Handheld game sales grew by a massive 42 per cent in the US in 2005 - compared with a 12 per cent fall in console software sales - as players took to Sony’s PSP and Nintendo’s dual-screen DS portable gaming devices.”

(2) There are no Windows Media-powered devices that truly compete with the Apple iPod, and that’s starting to hurt. This is a market where MS left it up to the OEMs to come up with something cool. It hasn’t happened. Perhaps the cost competition is simply too brutal; as in the PC space, the low prices on media players are nice for customers but so far go hand in hand with second-rate industrial design. Meanwhile, analysts are predicting 8.8m iPod units sold in the March quarter 2006. That’s something like 4x the run rate for the entire PDA market in 2005. And it all connects back to iTunes and IMusic. Ouch.

(3) While MS does have a presence and growing momentum in PDAs and phones, neither the Pocket PC nor the Smartphone are optimized for games, music, or video. Customers with entertainment foremost in mind won’t naturally gravitate to these devices.

(4) Because they can. Microsoft now has all the ingredients required: two OS variants to choose from (the Xbox OS and Windows CE, either of which would need some transmogrification), the .NET Compact Framework running on both OSes and the most popular mobile device CPUs, and many hard-won lessons from designing and shipping the Xbox hardware. That’s not to say it would be easy to design a low-cost, high-performance, handheld entertainment device that’s - gulp - more attractive to customers than iPod, PSP and Nintendo/DS, but at least it’s feasible. Microsoft would be wise to slant the design more towards the gamer community, as the Mercury article suggests, so as to work from the existing Xbox strength.

Of course, if Microsoft doesn’t want to go to all the trouble and expense of designing and build their own device, there is a much faster and cheaper approach: partner with Apple and port .NET Compact Framework and Windows Media codecs to the iPod.

Now that would be cool. Unlikely, to say the least, but cool.

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P.S. My standard disclaimer for Microsoft-related posts applies here: I have no insider knowledge on this topic. My speculations are based purely on publicly available information and my own feverish imagination.