Microsoft bets on making "dumb" phones smarter

Microsoft today announced a new phone app service—not for smartphones, but instead for the world’s cheapest and low-tech handsets. Called OneApp, the software was developed by Microsoft’s Unlimited Potential Group, which researches technology that can be used by poor people living in emerging-market nations. OneApp allows consumers with existing, non-smartphone devices to access Web sites such as Twitter, Facebook, in an efficient way.

OneApp’s been engineered to not require much in terms of data usage and memory; it runs only one individual application at a time. The graphics are lower resolution than those in iPhone apps. The phones running OneApp don’t need to eat up as much energy running the mini-software programs, either, according to Amit Mital, who heads the Unlimited Potential Group at Microsoft.

Why is Microsoft investing in making “dumb” phones smarter?

For one, the market for these phones is huge. Think about India alone: according to market researcher Gartner, mobile-phone market penetration in India is predicted to jump from 38.7% in 2009 to 63.5% by 2013. Gartner analysts say that this is mainly due to a focus on the rural market, more local Indian companies entering the sector, and the increased availability of cheaper phones. “The basic, or ‘feature’ [mobile] phone market as it’s known, is one with billions of customers,” says Mital. “Today, 'feature phones' are more common than smartphones. But there is a demand for apps, which are hard to find for these 'feature phones.'”

Two, Microsoft wants to introduce users of relatively low-tech mobile phones to Micrsoft’s “cloud” computing services via their handsets, which in essence the OneApp program does. This would increase its market share in this area.

Three, much of Unlimited Potential’s developing-world research eventually “trickles up” to mainstream products for the developed world. Consider the launch earlier this year of a simpler version of Windows, based on Microsoft’s Starter Edition for Windows, once available only in emerging markets, but now available worldwide on netbooks. Mital can't talk about how OneApp might affect Windows Mobile software in the developed world. But imagine how some design and engineering elements, such as sleeker, simpler on-screen graphics or the ability to deliver apps without eating up data usage, could come in handy when designing software for developed-world audiences, too.

Four, Microsoft also wants to be influential in the promotion and use of so-called “mobile wallets,” or turning the phone into a purchasing or banking tool. So OneApp will first be available in the next couple of weeks in South Africa, via Blue Label Telecoms, known for its mobile-wallet offerings. “BLT is already doing a lot in phone payments,” says Mital. “We saw this as a good fit for a partnership.”

Finally, Microsoft will open up the software developer’s kit for OneApp, making it possible for anyone in the world to create apps for these basic phones. The launch of OneApp will feature about a dozen free apps, but soon programmers and entreprenurs in both emerging and mature markets can potentially find new revenue streams if they charge for their apps.

Sure, smartphones like the iPhone and the BlackBerry might be the fastest-growing segment in the mobile-phone space—up 27% worldwide from last year, according to Gartner. But for those who can’t afford smartphones, and for those who are enterprising enough to capitalize on a surprising new market, yesterday’s “dumb” phones might just look like a clever new way to ride the app wave.

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