Microsoft, Unicom Alliance Set For Failure 微软、中国联通成立产业联盟注定失败

Microsoft (Nasdaq: MSFT) continued its long-standing China strategy of launching poorly conceived campaigns last week with its announcement of a new tie-up with carrier China Unicom (HKEx: 762; NYSE: CHU) to promote its struggling Windows mobile operating system (OS) in the world’s largest mobile market. While the software giant clearly needs to take aggressive steps to challenge Apple and Google in this critical market, this kind of new tie-up looks doomed to failure due to its poor choice of partners and lack of exclusivity.

Microsoft has had a tough time in China with nearly all of its products, especially in the mobile and Internet spaces where it is always playing catch-up to more forward-thinking rivals. It took a step to address that shortcoming last week with its launch of a broad-based alliance in the mobile space centered on a tie-up with China Unicom, China’s second largest wireless carrier. (English article)

The alliance also included several handset and chip makers, with a broader mission of promoting smartphones and other mobile devices powered by Microsoft’s Windows Phone 8 mobile operating system, which is struggling to gain an audience worldwide.

This new alliance is just the latest for Microsoft in a bid to become a relevant player in China’s fast-evolving Internet market, which is rapidly moving into the mobile space. Government data show that some 540 million Chinese now use the Internet, and a hefty 72 percent of those access the web over mobile devices.

Yet despite those numbers, Microsoft has made little or no progress with its several initiatives in the Chinese Internet space, largely because it often enters new product areas too late and fails to give them the resources they need to succeed. A Chinese version of its Bing search engine is a non-player in the market more than 3 years after its launch, and the company’s various MSN services in areas like instant messaging and e-commerce are also relative laggards.

The company’s global push into mobile operating systems continues Microsoft’s global trend of entering important new areas too late, in this case trailing Apple’s smartphone OS and Google’s Android by several years. This latest Unicom alliance also follows earlier trends of being poorly conceived, boosting the likelihood of failure.

It’s unclear what will make this tie-up special, since there are no exclusive elements in the deal that would exclude Unicom from promoting phones that use other mobile operating systems. Unicom already has tie-ups with most major smartphone makers that use other systems, including a much longer-standing partnership with Apple to sell that company’s iPhones in China. It’s hardly likely to abandon that tie-up to focus on Windows 8.

Microsoft is clearly behind the curve as usual in China’s massive mobile and Internet markets and is trying hard to catch up to become a relevant player. But this kind of poorly conceived tie-up with Unicom simply continues its tradition of doing “too little too late,” and is bound to fail like many of the company’s earlier efforts.

Bottom line: Microsoft’s new tie-up with Unicom is likely to yield little or no results in promoting its mobile operating system.