Windows: Back in the mobile race?
Just how much is riding on Windows Phone 7? It is after all just the latest mobile operating system from a company which is currently an also-ran in the smartphone business.
So why is Microsoft making such a big deal of it, with glitzy launches in London and New York? Last week the chief executive Steve Ballmer was in London to give a lecture about cloud computing to students at the London School of Economics.
But the only two Microsoft products that really seemed to get the ebullient Mr B bouncing were Windows Phone 7 and Xbox Kinect, the new motion-capture gaming platform.
These two, it seemed, provided a picture of where the company was heading in a bright new always-on connected future, with products that would excite and delight consumers.
When you look at Microsoft's latest set of accounts it's hard to see why so much is being made of mobile and gaming. After all the Entertainment and Devices division which includes these and a ragbag of other products still looks like an afterthought compared to the behemoth that is Windows. It had its best-ever year making $679m in profits, but that compares with over $12bn from the Windows division.
And, though Microsoft doesn't provide a detailed breakdown, it looks like most of those profits came from Xbox, with mobile revenue falling and the Microsoft-branded Kin phone proving a costly failure.
What's more Windows Phone 7 arrives in a ferociously competitive smartphone market where its rivals are already galloping away into the distance.
According to Gartner, Symbian is still in the lead with 41% of the market, followed by RIM, the Blackberry maker, on 18%, Google's Android on 17% and Apple on 14%. Windows, meanwhile is on just 5%.
So, I ask again: why is Microsoft trumpeting the latest variant of a mobile operating system as its biggest launch since the desktop Windows 7?
First, because executives are genuinely excited about the new system, and, having had a brief play with one of the launch phones, I can understand why. After years of horribly complex mobile menus that tried to mimic the desktop, Microsoft now appears to have created something that is actually both simpler and more attractive than what is out there at the moment.
You don't pick up the phone and struggle to work out where you go next - big bold rectangles lead the way. Developers are already making use of this canvas to build apps that combine the simplicity of mobile with the functionality of the desktop - the Tesco app, for instance, allows you to roam the store with greater ease than on other smartphones.
The other reason this is so important is that Microsoft has realised that all the action, all the innovation, in the world of communications technology has now moved to the mobile. It's where the next billion consumers are most likely to get their first taste of the internet; it's where new ideas like app stores or location-based services or augmented reality are being tried out.
So, while Windows and Office and the server business will no doubt continue to churn out billions of dollars for years to come, Microsoft will look increasingly irrelevant if it is not at least a player in the mobile market.
And that is why Steve Ballmer is bouncing around telling us how Windows Phone 7 is going to blow our collective socks off. Microsoft's rivals in the smartphone business are way ahead, but Mr Ballmer believes there is plenty of time to catch up.
He will have a quite a battle to win over the millions who've already bought into the Android or iPhone or Blackberry versions of the mobile world.
But there are millions more who are just beginning to think about using a phone for more than to make calls, and there is now another option for them to choose.
Windows is never going to achieve the dominance on mobile phones that it still has on the desktop - and thank goodness for that, will be the cry from those whose believe that monopolies stifle innovation. But Microsoft is now back in the game, and that has got to be good for mobile consumers.
Update 1631: What a coup de theatre! At the end of a rather lacklustre launch event in London, Microsoft introduced a surprise guest to extol the virtues of Windows Phone 7. Onto the stage walked the actor, writer and polymath Stephen Fry, notable to date for his adoration of Apple's products and his disdain for just about everything that has a Windows logo on it.
The Fry Thunderbolt
He proceeded to explain how his mind had been changed when he was sent some of the new handsets: "My first feeling was that it was fun to play with". Mr Fry explained, contrasting it with earlier phones that had been drab and grey and all about function rather than form. "When I heard Mr Ballmer use the word 'delight', I thought what joy there is in heaven when a sinner repenteth."
And what joy there will be in Seattle to hear those words. Stephen Fry, who is a genuine fanatic about smartphones, was keen to stress that he had not been paid for his appearance. But for Microsoft his endorsement will be of huge value - after all a few unkind words from him have done untold damage to other new phones in the past.