OneApp - No threat now... but indicates continued change in strategy

Microsoft's announced launch of their OneApp platform Monday will hardly make any competitors nervous in the short term but the long term implications may be more threatening. The OneApp platform is essentially a widget platform designed for feature phones that Microsoft will be marketing in developing countries.

At the core of Microsoft's OneApp strategy is the platforms ability to offload much of the computing power to the cloud. This will require some coordination with carriers to optimize the data transfer to provide a compelling experience. Microsoft does not have a history of working with carriers who are striving to maintain control of the UI and their branding. These competing forces and lack of experience will likely cause problems for Microsoft. Perhaps the Microsoft brand is stronger than carriers' in developing countries and can provide Microsoft some leverage at second tier carriers. Needless to say, announcing that you did a deal with a company that you own a 12% stake in is less than impressive.

Microsoft will also see stiff competition from vendors like Nokia, Opera, Myriad (the combined Esmertech, PurpleLabs, and Openwave device business) and Qualcomm who have much more experience in the mobile widget and mobile internet market. The fact that Microsoft has built a Java ME based platform is also puzzling after many Java based widget platforms have failed, including Widsets which Nokia essentially killed this spring. Vendors that have the experience, are moving toward web based execution environments to avoid fragmentation issues, leverage emerging web standards, and allow users to access widgets from the home screen.

While Microsoft will not be a force in the mobile widget market anytime soon, the OneApp announcement and the recent alliance with Nokia signals that the Microsoft ship is turning. This is another example of Microsoft shifting strategy by de-emphasizing the OS and focus on areas to add value higher in the stack. The focus on developing countries is also very interested given that Microsoft my be the only company with the resources and global brand to reach the economies of scale to make money in emerging markets....of course the other company able to do this would be Nokia.