Check out this a quote from Steve Ballmer as he discusses touchscreens and the lack of multi-touch in Windows Mobile:
Windows Mobile 6.5 has touch on it. The way Apple does touch drives cost. [The] way they do it on the iPhone is not an inexpensive component. We’ll do it in a way that you can afford to do it on most phones.
Coming from Microsoft, this quote makes a lot of sense. I mean, if you’re focused on things like making phones affordable, you often do so at the expense of making them attractive and compelling. That isn’t a knock against Microsoft, though, as that’s a viable business strategy a number of companies implement to great success. It does, however, help illustrate Microsoft’s business model: Volume over superior quality. That’s not to say that Microsoft’s products are crappy, because that’s hardly the case. It simply means that when volume is your number one metric, you necessarily have to make qualitative product compromises in the interest of increasing sales volume. When it comes to smartphones however, that decision can be costly.
Typically, purchasesr of consumer electronics can’t tell a huge difference between high quality and average quality products. Take HD TV’s, for example. Westinghouse can make some decent money selling average quality TV sets because to many consumers, the differences between a Westinghouse and Sony HDTV aren’t great enough to warrant doling out the extra cash. The problem that Microsoft has is that the difference between Windows Mobile and a device like the iPhone is so apparent and tangible, that the iPhone almost jumps out as something from a completely different product category.
Microsoft has played the volume game masterfully for the better part of two decades. When it comes to smartphones, however, quality seems to be the name of the game.