Originally Posted by john galt
MSFT is going to need more than $500M to "catch up" to this market. How much doesn't matter. What they need can't be bought.
Well, I wouldn't be too sure about that. They need two things in mobile, marketshare, which they have next to none of now, and, more importantly, mindshare, of which they have none with currently shipping products and consumers, but still some with developers.
$500M can certainly buy them some marketshare, essentially paying handset manufacturers to build WP7 handsets; and carriers will likely be happy to throw another mobile OS into the mix, since it is to their advantage to insure that no one mobile OS becomes totally dominant.
Harder, but not impossible, to buy is mindshare. They used to be pretty good at this, but have certainly slipped in their ability to do so in recent years. But, if they can pay developers for some compelling apps, take a significant chunk of marketshare, and rouse the faithful, they have at least a shot at being successful in this.
The enemy is obviously Android, which has pretty decent marketshare right now, but not all that much mindshare outside of certain geek circles. Android's faux openness is not really a big selling point beyond the geeks, so I don't think a business model contrary to that is a problem for them. So, the big question is can their marketing be compelling enough to actually make people want these phones in preference to Android phones. It's a hurdle, but not an insurmountable one.
The biggest losers will continue to be Nokia and RIM, with HP/webOS an entirely unpredictable wild card at this point. (If not bought by HP, webOS would die a not so lingering death. It's not clear, to me at least, whether HP can reverse that, and it certainly doesn't help them being rudderless at this point in time.)
EDIT: Assuming they're going all in with WP7, they also need a (non-Windows) tablet in the game. Without that, WP7 may well just end up as the latest failure from Redmond.