Throughout the histories of Windows Mobile and Android, many handset developers have talked the talk of supporting these mobile operating systems, dribbling out a couple of handsets per year as they focused on other priorities. But not HTC. The company has created more Windows Mobile and Android handsets than companies many times its size, and in fact developed the very first Android handset. Microsoft cited HTC at Mobile World Congress 2009 for being an exceptional partner, while Google's Nexus One is an HTC-built handset sold exclusively by the search giant.
HTC has done more than simply create a lot of phones for these operating systems. It has attracted attention for its designs that include some of the largest displays and best QWERTY keyboards, as well as clever touches like the Touch Pro2's speakerphone, which activates simply by placing the handset face down on a table during a call. But most distinctively, HTC has invested heavily in developing engaging user interfaces on top of both mobile OS foundations, with development teams focused on delivering skins like TouchFLO and Sense to both Windows Mobile and Android. But now that Microsoft is radically changing Windows Phone 7 Series, HTC will have to change course, and in the process lose the distinction of having its custom user experiences live across both Windows Mobile and Android.
HTC's parallel user experience strategy of making over its phones' user interface always drew its share of puzzlement. For example, if the company was working so hard to create so similar an experience across Windows Mobile and Android, did it really need to support both? But that's a moot question now. With Windows Phone 7 Series, Microsoft has swung the pendulum away from open customization and instituted iPhone-associated conventions like limited multitasking, an app store where submissions are hand-screened, and a ban on putting other top-level user interfaces above its own, often known as "skinning." That last prohibition casts aside user interface layers such as Sony Ericsson's Panels, LG's S-Class and Samsung's TouchWiz on Windows Phone 7 Series devices.
Perhaps the upgrade for that "orphaned" HD2 is to Android.
For the sake of consistency of the depth and breadth of the platform, this is the right decision for Microsoft. It never said much for previous versions of Windows Mobile that vendors had to take key elements of the user interface -- or nearly all elements of the user interface as HTC did -- into their own hands to create something closer to a competitive experience. However, while Microsoft's skinning prohibition raises general questions of how licensees will differentiate themselves, it has a particular impact on HTC. HTC could probably continue to license Windows Mobile 6.5 (or Windows Phone Starter Edition, or whatever it's called in the future) although that isn't a viable long-term strategy, and one that runs counter to HTC's focus on innovation.
HTC can certainly decide to ship Windows Phone 7 Series devices, relying on its enthusiast-friendly hardware designs to set it apart in a market where competitors like LG and Samsung have better economies of scale and better-known brands. Or it could drop Microsoft's mobile operating system altogether and focus on a single OS, as Palm and Motorola have done, leveraging the knowledge built up in evolving Sense on Windows Mobile. Of course, that would place HTC in direct competition with Motorola as the premier Android shop, but Motorola is not the global force that Samsung and LG are today, and Sense can more than hold its own against MOTOBLUR. Perhaps the upgrade for that "orphaned" HD2 is to Android.
In the broader context, a better Microsoft operating system for handsets helps all of its licensees. Differentiation doesn't count for much if nobody wants any of the products. Regardless of whether it stays with Windows Phone 7 Series, though, HTC is left in a weaker competitive position than it was in before skinning went away on Windows Phone 7 Series. It looks like Microsoft's Windows Mobile "reboot" booted at least one of its key partners in the behind.
Ross Rubin is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.