With Windows Phone 8, Microsoft Just Osborned Itself

Two years after scrapping its old mobile OS, Microsoft is doing it a second time?and it may be the company's only remaining option.

On Wednesday, Microsoft officially unveiled Windows Phone 8, a major upgrade to its struggling mobile OS?and shot its entire existing user base to hell in the process.

I don't own a Windows Phone. But I review a lot of them, and praise Windows Phone OS pretty much every chance I get. It has its flaws, but it shows flashes of brilliance both in UI design and overall refinement. The thing is, it's not selling?and remember, it was supposed to save the company's prospects on phones, after years of neglect with the horribly designed and bloated Windows Mobile.

Enter Windows Phone 8, which is pretty interesting. It looks a lot like Windows Phone 7.5 on the surface, aside from a neatly redesigned home screen. But underneath lies a sea change, as Windows Phone 8 will share the same kernel as the desktop version of Windows 8?something that, amazingly, Microsoft has never tried before, in the roughly 15 years it has spent trying to crack the PDA and mobile market.

With Windows Phone 8, Microsoft is also adding support for everything the OS needed, including multi-core processors, multiple (read: higher) screen resolutions, swappable memory cards, IPv6, and NFC. Developers previously restricted to working in Microsoft Silverlight can now write native code, as well as code in HTML5, XNA, .NET, and C#. The new OS will even use the NTFS file system and support enterprise-level security hooks similar to those for desktop and laptop PCs.

This is all great stuff. But Microsoft said that no existing Windows Phone devices will be able to upgrade to Windows Phone 8. To appease those users, it's offering up another version, referred to as 7.8, that will contain the home screen customizations and other superficial enhancements, but that's it.

The Osborne Effect
In doing this, Microsoft just eliminated any reason to buy a Windows Phone device today?echoing a distant-but-famous phenomenon known as the Osborne effect.

In the early 1980s, Osborne Computer Corporation was the first computer hardware company to go bankrupt essentially by unveiling a product it couldn't sell yet. The company announced the Osborne Executive, a new computer that wouldn't be available for several months. Meanwhile, the Osborne 1, which legendary computer engineer Lee Felsenstein designed, was still on sale. So what happened is that from the moment the company announced the Osborne Executive, sales of the Osborne 1 fell to approximately zero. Not only that, but various dealers all began canceling their Osborne 1 orders. Ultimately, this contributed to the destruction of the company.

I'm far from the first to bring up the Osborne effect. It's a useful parable in the tech industry to which you can refer back. Obviously Microsoft failing in mobile devices will not bring about its imminent collapse; it's much larger and stronger than that. But not only does Microsoft's decision torpedo the goodwill it had with existing Windows Phone partners?particularly Nokia?but it also affects every phone on sale right now. From now until the release of Windows Phone 8, every single Windows Phone buyer is someone who can never upgrade to Windows Phone 8.

Sean Carroll, our managing editor for software, Internet services, and networking, posed that as a result of all this, if all the various carriers sell 10,000 Windows Phone 8 users on day one, that OS will then have a user base of 10,000. In other words, Microsoft is basically wiping out every single existing user of Windows Phone and starting over.

What Purpose Could This Possibly Serve?
So with all this in mind, why would Microsoft even do this to begin with? Microsoft says that it couldn't get its new code base to work on existing single-core phones. That's sort of believable, but it doesn't do anything for Microsoft's long-standing reputation for bloated OS code.

More likely, it's a tacit acknowledgement that the company's current path on mobile isn't the right answer. To be sure, Windows Mobile needed to go, but Windows Phone isn't working, either. The thinking is that the existing user base, while important and unfortunate to screw over, is still really small. Better to do this now while Microsoft still can, in other words.

Existing Windows Phone 7.5 devices will continue to work with the 100,000 apps already available in Windows Marketplace. And developers writing new Silverlight apps will have Windows Phone 7.5 and Windows Phone 8 customers, as the new version of the OS will continue to run Silverlight apps. But apps developed for Windows Phone 8 specifically won't work on existing phones, which means it won't be long before 7.5 users can no longer update their favorite apps.

A Twitter user who goes by the name of Natasha wrote that Windows Phone fans defending Microsoft's decision to orphan 7.5 reminded her of Stockholm Syndrome. I find that hilarious, and there's probably some truth to that statement. But whether you agree or not, it's clear Microsoft is at a perilous point, and needed to do something, fast.

But I can't help but think Microsoft could have found some compromise?at least to get it working on the absolute latest Windows Phone devices, such as the Nokia Lumia 900, the HTC Titan II, and the Samsung Focus 2. All of these phones now have an orphaned OS. Only the Lumia 900 is selling in appreciable quantities, but even so, Microsoft just basically eliminated any reason to buy one of these phones for the next several months.

Would you buy a Windows Phone today?any of them?knowing all this? And knowing you'd be stuck in a two-year contract with it? Let me know in the comments.

For more, check out PCMag's Eyes On With Microsoft's Windows Phone 8 and the slideshow above.

For more from Jamie, follow him on Twitter @jlendino.

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