Microsoft is behind the times with its smartphone operating system. Windows Mobile fell behind BlackBerry and Symbian, and all were taken by storm when the iPhone and Android hit the market. BlackBerry is still holding on and may come back with a resurgence, Symbian finally looks like it is going away, and Microsoft sent a strong signal that it wants to remain relevant with Windows Phone 7. While this OS is reportedly a fine smartphone platform, it is late out of the gate.

What do you do when you are late to the game? You buy someone to get in, and make some noise. This is where Skype comes in.

Skype is the best known service for making phone calls through your computer, and is probably the best known service for making VOIP calls from your smartphone. You can associate a phone number with your Skype account (Skype-In), and can use Skype to call regular phone numbers (Skype-Out). You can talk to someone from your smartphone to their smartphone for free if you are both Skype users, and can even video chat if you have a capable device. What’s more, it is cross platform – you can video chat from an iPhone to an Android phone. This makes switching phones and platforms easy as you are not tied into any one particular system on one particular phone.

By integrating Skype directly into a future release of Windows Phone (8?), Microsoft will provide customers with a very compelling value proposition. Windows Phone to Windows Phone calls can be free. All calls can go over VOIP/data and not require standard voice minutes. All your calls can be made over wifi, reducing your data needs. Your computer can become your phone.

Windows Phone 8 – $30/month with 6 GB data and unlimited calling in Canada/US?

Going waaaay back to April of 2009, rumours were abound about a project Pink within Microsoft, which was code for “Zune phone”. It was to be a mobile device, similar to the Zune, which ran Windows Mobile 7. There was talk about cameras, 720p, and a host of services. None of it materialized as it seems Pink was shelved.

Recently, Jeffries & Company Analyst Katherine Egbert had the following to say:

“Our recent industry checks indicate Microsoft will be debuting its own phone sometime in the next two months. We expect the new phone to debut soon, at either the Feb 15-18 Mobile World Congress conference in Barcelona Spain, or possibly at CTIA in Las Vegas one month later.”

Included in the linked article is a quote from Microsoft CEO Steve Ballmer, outlining intentions to develop a mobile platform. Most interesting is the following bit:

“With Windows Mobile, we want to permit a range of hardware innovation… the ability to scale up and down, to work with multiple hardware vendors, to get a range of competition and innovation and price competition amongst the hardware guys is a big asset. It is certainly what our strategy is.”

This means we should expect a more Google-like approach to the Zune phone as opposed to the one Apple has taken with the iPhone. Namely, look for 3rd party OEMs to build the devices, and look for Microsoft to provide the OS platform being run. I’m sure we’ll see some kind of Windows Mobile Marketplace for apps, and with the huge number of Windows developers, expect the number of apps on this store to grow very quickly.

This of course presents Microsoft with a strategic problem. Probably Windows’ largest issue is that it runs on literally millions of different hardware and driver combinations. Remember the upgrade to Vista? Remember not having device drivers for 6 months? This is also a problem which Google seems to be butting up against with Android. What’s the latest version of Android again? Oh right, it depends what device you’re talking about.

Different hardware running different versions of an OS presents challenges for developers and users. Will my 1.5 gen Zune phone be able to run winmo 7.4? Does the newest version of my favourite app require v7.4? Does that mean I have to upgrade my phone? What about my contract?

Apple of course solved this problem by controlling both the hardware and OS themselves. It works well, although many feel they have too much control with regard to the app approval process. There has to be some middle ground where a phone’s app store is open (Android), yet is still high quality (BlackBerry), and is guided by hardware (Apple).