Remarks by Andrew Lees, President, Windows Phone Division
Los Angeles, Calif.
July 12, 2011
ANNOUNCER: Ladies and gentlemen, please welcome, President, Windows Phone Division, Andy Lees.
ANDY LEES: Well, good morning. You know, it’s a fantastic opportunity to speak to you this morning about the world of devices. In fact, I guess many of you can just look around and see the way in which people are using technology in completely different ways. I mean, how many people have been to dinner and people are texting rather than talking? You see people going through, and they’re trying to do everything on their smartphone. They’re going through and tweeting all of the time. In fact, I find myself, sometimes I do things the long way just to make sure it can’t be captured in 140 characters.
And then, of course, even at the partner conference, you go out in the evening, you relax, you’ve finished the day, you go out, you have a few drinks, perhaps, and then somebody brings out their smartphone, starts taking pictures, they think it’s the beginning of a laugh out loud, and for you it’s a moment of regret. (Laughter.)
Of course, why is this happening? What is it that’s going on? Why is there such a proliferation of different types of devices, different ways in which people are using technology? Well, there are some key trends that are fundamentally changing the world of devices. Now, they’re going to have a huge impact in the technology that we provide, and the solutions that you build. And it starts right at the core of the devices themselves, the core technologies.
One of the demonstrations we did at CES, it was perhaps the most boring thing to do in front of a whole set of end users, but it was perhaps the most profound, where we showed the motherboard of the next generation of PCs that are going to run on “Windows 8,” and the motherboard was smaller than a phone, smaller than a phone, because we’re at an inflection point in Moore’s Law, where you can put all of the key things required to run a computer into a single chip, a system-on-a-chip. That means that you can have full PC compute power available in whichever form factor that you like. And that’s part of the reason why we’re seeing all of these different form factors.
And, in fact, you can combine that power with different sensors to have different types of user experiences, and different types of input, location, camera, are all being added to the way in which you can use that core technology. Another advantage of moving everything onto a single chip is that the price comes down dramatically. And, in fact, if you look even at the price of smartphones, a year ago all smartphones cost over $400 when they left their hardware manufacturer. Today, they’re down to about $200, and next year, a smartphone that can run something like Windows Phone 7 will actually be down to $100 to $150. So, you’re seeing a dramatic price reduction.
The second thing that we’re seeing is this thing whereby the cloud is enabling new types of scenarios. I mean, just take that example I talked about a moment ago. Pictures, which is the number three usage of a mobile phone used to be about capturing digital memories. Now, it’s the beginning of a laugh out loud. You want to take the picture, you want to tag somebody. You want to share it, perhaps on multiple social networks, and have people come back and communicate to you. It is the cloud that is defining the scenario. And, in fact, the devices are not becoming thin clients; you want to celebrate the capability of the device, and have it participate with the cloud, and with other types of devices.
The third thing we’re seeing is consumerization of IT. A lot of the examples that I’ve given you so far have all been consumer technologies, and consumer scenarios. But that same technology is business technology. We’re seeing consumers bring their technology into work, and we’re seeing people who want to do the same things that they do in their personal lives in their business lives. And, in fact, this quote here from Gartner shows that any company that tries to resist this will do so at their peril. This is an unstoppable force. It’s the fastest set of adoption of technology that has ever happened, and it’s starting with the consumer, and finding its way into business with this proliferation of different types of devices.
One of the key important things here, though, is the change that’s yet to happen, but it’s about to happen, and that is the bringing together of these devices into a unified ecosystem, because at the core of the device itself it’s possible to be common across phones, PCs, and TVs, and even other things, because the price drops dramatically. Then it will be a single ecosystem. We won’t have an ecosystem for PCs, and an ecosystem for phones, one for tablets. They’ll all come together. And just look at the opportunity here.
In 2010, if you count all of these things, there’s just under 700 million units sold in that year. And yet if you look at the predictions from IDC and add them up, that will increase to over a billion units that are sold in 2012. And notice how it’s additive; it’s not that this is about replacing the PC. And that’s why our strategy is that these new form factors are within a single ecosystem and not new ecosystems themselves. Windows has always spanned different PC form factors. And with Windows 8 we’re going to take this to a whole new level including tablets.
Now, a lot of people have asked me, are we going to produce a phone that is a tablet? You know, are we going to use Windows Phone 7 to produce tablets? Well, that is in conflict with this strategy. We view a tablet as a sort of PC. We want people to be able to do the sorts of things that they expect on a PC on a tablet, things like networking to be able to connect to networks, and utilize networking tools, to get USB drives and plot them into the tablet. To be able to do things like printing, all of the things using Office, using all of the things you would expect from a PC and provide a hybrid about how you can do that with the tablet, as well.
And so at the Build Conference in September we will talk about how we can provide the bet of the PC and the tablet. And our strategy is not just limited to that. We are aiming to provide coherence and consistency across the PC, the phone, and the TV, particularly with Xbox. That’s through providing new types of scenarios, things like the way in which we make the user experience more common, as you saw yesterday in the demonstration of the user experience that you have on Windows 8, Windows Phone, and also on Xbox. But, also sharing key pieces of technology.
You see if you looked at the update that we’re providing to Windows Phone this year, we include a new browser. It’s Internet Explorer 9. It’s the same technology that we have on the PC. It’s not similar. It’s the same. So, we can take the advantages that we provide on the PC and immediately leapfrog and provide those across different types of devices.
This is very important to you, because it protects the investments that you have made with us together, and your customers have made in key elements of the technology, not only the device, but the infrastructure, the productivity, and the solutions that are used to feed those devices to enable those business and consumer scenarios.
So, for a phone the strategy here is not to provide a business phone, or a consumer phone, but to have them all be the same thing. There’s only one thing. And so there’s a few key things that we’re delivering with our phone strategy. The first one is that we need to provide what end users desire and what they require. These personal scenarios like music and games, and communications, personal communications, social networking, build them into the phone, but also enabling a line of business solutions, business productivity, getting access to information inside of your company. And we may need to make sure that it works with the existing infrastructure and we provide the same tools for you to provide solutions to customers.
When we started out on this strategy of V1 was last November when we shipped Windows Phone 7. And we took a very, very different approach. You see, with smartphones today they’re all about application launchers and the user is provided with a grid of icons, and a sea of applications. And it’s up to you to be able to go through to navigate all that to try and make it all make sense. Well, our proposition is very simple. All we want to do is to make it so that you can do more with a smartphone, make the smartphone smarter and easier. And this year we’ll have Windows Phone “Mango,” which is the code name to the next release. In less than a year we will ship more than 500 new capabilities in a free update that will be available this fall.
We’re already provided the development tools out for “Mango.” So, what is “Mango” all about? Well, it’s about three main things. The first thing is communication, the second thing is about applications, and the third thing is the Internet. You see, the phone has always been a communications device, but people today are communicating in lots of different ways. Communications, email, instant messaging, sharing pictures and laugh-out-louds, and social networking; even checking in is a type of communication.
Rather than doing all of that in individual applications we build those core capabilities into the phone. It is the easiest and simplest way to communicate across a variety of different services, and to go from phone to phone, phone to PC, or phone to Xbox. The second area is applications. The problem with applications is they all run in silos. So, with “Mango” we let applications break out of their box. It means that information from the application is available throughout the phone, and also, the application participates in the total experience.
Then finally with the Internet, the challenge here has always been to provide a desktop-type experience on the phone. And we deliver that by including things like Internet Explorer 9, in with “Mango.” But, we go one step further, and we say imagine if you could take the power of the Internet and deliver that beyond the browser, in a way that enables you scrape the Web so that you can quickly find answers and get things done, find information to be more productive.
And this is what “Mango” is all about. Do you want to see a demo? (Cheers and applause.)
Oh come on, do you want to see a demo? (Cheers and applause.)
OK, so please welcome Derek Snyder, who is going to take us through Windows Phone “Mango.”
DEREK SNYDER: Thanks, Andy.
Good morning. Good morning? (Audience response.) That’s better.
As Andy talked about, we want to take you through a quick peak at what we’re doing in Windows Phone “Mango,” specifically in those there areas that we discussed, communication, apps, and Internet. And let’s go ahead and get that up on the big screen. Just like Windows Phone 7, you’ll notice that my phone — are we up on the screen yet — just like in Windows Phone 7 you’ll notice that my phone actually has a bunch of these Live Tiles, and so the Live Tiles light up with all sorts of information that is brought forward to me, so that I don’t have to go hunting for that.
I have the weather app, for instance. Here that’s showing, instead of 73 degrees in Cupertino, the actual weather here in Los Angeles. I’ve got the Foursquare app that gives me my latest merits and points, which becomes a very compulsive thing for me. And I even have this application that shows me the latest soccer scores, although it’s kind of weird that it actually is called My Football. I don’t really understand that as of yet.
One of the things you’ll notice here is that we’ve take a very people-centric approach to the Windows Phone software, and so first and foremost we go into the People Hub to see everything that’s going on with the people that you’re connected to. The interesting thing is we connect with all of the places that you know people across your work Exchange Server, Hotmail, Gmail, even Facebook, Twitter, and LinkedIn, all together in one place. And we allow you to mirror your real-life relationships on the phone. So, for the purpose of this event I actually have here are my family, my New York City friends, and I’ve even created a new group here for WPC.
Now, groups allows me to bring all the people that I want to connect with together in one place. So, these are all the people that I’ve been hanging out with here at WPC and working with, and you’ll notice that the tiles light up with the latest information. When I get calls and emails, and messages, all that comes forward. We actually bring forward social networking information across all those services I just named for all these people. So, I can see indeed when Augusta, for instance, checks in here at the Staples Center; it’s really easy to keep tabs on people. I can see photos they’re posting, et cetera.
Speaking of photos, we actually bring all the pictures forward. So, you don’t have to go hunting in separate applications for them. This is a really cool way for me to have photo albums of all the people and places that I’ve been hanging out with and everything we’ve been doing.
And last, but not least, we actually bring forward group communication. So, it’s really easy for you to send group email, or also do text and chat, both across SMS, and the two largest social networks in the world, Windows Live and Facebook, both with over half a billion users.
Unlike other phones, like iMessage, or BBM, we don’t have a proprietary solution. We actually connect to where your friends already are. And this is actually done through a feature called threads. You’ll notice here my friend Adrienne was trying to connect with me and she said, we could meet up this weekend, she’s not on Facebook all that much.
So, notice this actually came in and it appeared to be a text message, but it actually is a Facebook message. And so what’s really cool is the phone is intelligent, and gives me the option to actually switch on the fly. It’s saying, indeed, Adrienne DiFabio is offline, try text instead. And with one tap I can go ahead and switch to text message, and I can continue this conversation as if it never stopped. (Applause.)
But, we didn’t stop there. We actually wanted to invest in the email experience and make us truly the best phone for email. Our competitors have an all-or-nothing approach when it comes to email/inbox combination: either all of your inboxes are together, or they’re all separate. Here I actually have two tiles representing my inbox. I have a linked inbox on the left for my personal mail, which I’ve combined Hotmail and Gmail; and on the right I have my work inbox, which connects up to Exchange. Let’s take a look at that.
You’ll notice right off the bat, some people are reading my extremely authentic email; we bring together all of the mail accounts right into one spot. And so I have my Exchange mail here. But we actually enable a lot of the features people have come to expect on desktop Outlook, because after all this is Outlook Mobile. For instance, with Akim, I have Conversation View built right in. People are excited about Conversation View. But, unlike other phones, we actually keep track of what I’ve said. So, it’s very easy for me to see my responses, and forward off the original start of a thread. Maybe I had some attachments that I want to forward along. That’s extremely easy.
We also support information rights management. So then, you open up that critical email, you actually can read it, and you have the ability, of course, to reply to that, and I don’t have to do any extra work on my behalf. It happens automatically.
And the last thing we actually do is connect things that should be connected, like email and calendar. So, when I open up a meeting request from Andy for In and Out Burger later today, it actually scans my calendar, tells me I have a scheduling conflict. When I tap on that, it takes me right to that part of the calendar. And the coolest thing is, I’m able to see conflicts that exist across work and life, because we actually bring together Hotmail calendars, Gmail calendars, I’ve got my Facebook calendar, it’s all here. (Applause.)
Now, as you saw earlier, Steve actually wanted some financial data. So, I’d better take care of that before I get off stage. And for that I’m actually going to go into one of our key, core hub experiences. These are really pivoting now to talk about our applications. This is the Office Hub, and you’ll notice that it synchronizes all my notes. And they come down automatically from the cloud. They’re stored up in the SkyDrive. And I also have all my documents. And this is pulled together from a bunch of different sources. It syncs out of the box with Office 365, with SharePoint, or with Windows Live SkyDrive. So, it’s really easy if I’m a business professional, if I’m a consumer, to get documents, and go beyond just editing, and actually start collaborating.
I’m going to go ahead and open up this financial data. You’ll see that the fidelity is just fantastic, because after all this is Office on the phone. And I can do things for the Excel nerds that you would expect, like select a bunch of cells and get things like auto sums. So, I can verify that data before I go ahead and send that off to Steve.
Now, that’s an example of what we’ve done with our application experiences, and there’s actually plenty more; we don’t have time to talk about Xbox, or what we’ve done with Lync, but you’ll see those a little later in our side keynote. What we really want to do is show you what third parties are doing on top of the platform.
And for that I want to show an application coming from British Airways. You’ll notice that British has exploited some of the new capabilities in “Mango,” and I’ll point those out in a minute. We have the ability to see my next slide; you’ll notice the app is designed just like a great Windows Phone app, where you have the pivot and panorama. I can see all my flight details. I can see my frequent flyer information. And I also have the ability to do things that you’d expect, like check in for flights. So, I’m going from New York to London tonight. I have not yet chosen my seat. So, I’m going to do that right now.
What we’ve heard from developers oh, yes, the anticipation what we’ve heard from developers is that they don’t want to make compromises between choosing an application that they’re going to create in Silverlight, which supports great things like buttons, and forms, and things like that that you’d expect, and also what you would do with 3-D graphics in, for instance, a game, and using XNA. And so, you’ll see here that British has actually created this immersive 3-D experience for seat check-ins so that you can, indeed, see that a window seat is better than the aisle, or better than the middle seat.
So, I’m going to go ahead and confirm that now. I’m going to go ahead and officially check in for the flight, and I’ll get my boarding pass. Now, the really cool thing is, I actually get all sorts of flight info. I can see information about movies, and we connect directly to Bing to get more information about these movies. I can see the dish that I’m going to have. I can get information on the plane, who is the captain so I can greet him personally when I get onboard. They love it when you do that. And I also can go ahead and pin this to the Start screen. So, we take applications out of their silos, and allow you to take portions of applications and pin those to the home screen. Whereas, on the bottom here, you actually see my boarding pass is pinned. And so, unlike the guys with the iPhones at the front of the queue, you can just tap on your pin, and go straight into the part of the app you care about, which in this case is the boarding pass. Very easy. (Applause.)
Now, let’s shift gears a little bit and talk about the Internet. So, as Andy talked about, we have Internet Explorer 9, the same rendering engine on Windows Phone “Mango.” And so while we actually have our experience, I thought it would be interesting to actually show some competitor experiences. And for this I think we’ve all seen this demo before at probably previous WPCs. This is called Fish. And so the cool thing about Fish is that it animates in 3-D on top of an HTML5 canvas. This isn’t Flash. Basically these animated fish, and we get a little frame rate on top. So, here we have the latest and greatest BlackBerry. It’s actually running at about 9 frames a second. Let’s add to that the 4G LTE Samsung Charge, which is an Android phone. The fish are short of moving along there. And let’s actually bring in an iPhone 4. And it’s running about 14 frames a second.
OK, set up complete. Let’s now bring in the Windows Phone running “Mango.” And you’ll actually see the fish are running 50 frames a second, because they’re taking advantage of graphics acceleration. (Cheers and applause.)
Now, you may say to me, Derek, that’s great, but this is your fall release. And these are the competitors’ current release. Aha, well, iPhone actually released iOS 5 beta 3 yesterday, and it flashed on this phone. So, this is their fall release against our current fall release as well. So, it’s an apples-to-oranges comparison, Apples to apples, I guess you could say. Anyway, you get the picture.
OK. Let’s go ahead and finish off the demo with one more thing, and this is really about how we tailor the Web for you. And so, this is Bing integration into “Mango,” and we actually bring this to the next level by taking advantage of sensors so you can complete searches on the phone in a really new, and unique way.
Now, Andy doesn’t know this, but I took this book out of his bag. He was reading it on the way. (Laughter.) What Andy doesn’t know is that I also am a huge Bieber fan. And using a new feature called Bing Vision I’m going to get some more information about this book. I hover over the book, and within a few moments I get the instant result. I can open up this quick card that gives me information about this book. I can read the reviews, which I think right now are mostly seven-year-old girls. Andy should submit his. I can see price comparisons. So, what you’ll see here is, we’re actually scraping the Web and bringing together all this information into one place. But, most significantly, unlike any other phone, we actually connect to applications. It turns out that there’s a bunch of applications that are really good at doing things with books, either purchasing them, or getting information about them. And so, using a feature called App Connect, we scan the phone’s apps, and we connect them automatically, so that the consumer doesn’t have to type in the book name, find a separate app. This is connecting straight to Kindle, and within a few seconds I’ll go from literally taking a photo of this book to downloading it wirelessly to my phone and reading it.
So, that’s just a peek at what we’ve done in “Mango.” I hope that you come to our session at 12:00 at the J.W. Marriott in the Diamond Ballroom. You get about 25 minutes of demo, and we’ll go much, much deeper. Thanks very much.
ANDY LEES: Great. Thank you.
(Cheers and applause.)
I obviously need to watch Derek in my bag next time.
Of course, having the software and the technology are key building blocks, but to accelerate this ecosystem, we need to work with partners, that’s yourselves, whether you’re providing infrastructure, productivity solutions, or line-of-business solutions, operators and handset makers.
And if you look at the progress that we’ve made together, it really has been truly amazing. Just looking at applications in the marketplace, we have gone in eight months from zero to over 22,000 applications in the marketplace. And to put that in perspective, that’s the fastest ramp-up of any new mobile operating system ever, and in eight months we’ve overtaken more applications than RIM has had in their marketplace, which has been available for over two and a half years. So, I want to say a very big thank you to you, and congratulations on this milestone.
Of course, it’s not just about applications. But the phone becomes an end point for the solutions that you’re providing to your customers. And IDC recently did a study; first of all, they’re predicting that Windows Phone will be the number two smartphone in 2014. More about that in just a second. But what they’ve also done is looked at the revenue attach opportunities that there are for partners when they go through to provide infrastructure that feeds the phone, through things like management, security, and enabling these types of scenarios. The second thing is productivity through delivering things like Office 365, Office itself, et cetera, to make employees more productive, SharePoint, and then solutions, line-of-business solutions, that you develop. And the opportunity here is just mind-blowing. You’ll see that in 2011, there’s nearly $700 million worth of attach revenue opportunities just on the phone, and that will grow dramatically to 2014 here, where they predict it will be nearly $2.5 billion.
So, the message here is make sure that the phone is a key element of your strategy for how you’re providing productivity, infrastructure, and solutions for your customers.
The second area is with operators. And here what we want to do is provide the largest geo-footprint that we can. We’re going to more than double the size of the market that we have in “Mango.” We significantly increased the number of countries, and we will lower the price of the phones by half, increasing the total addressable market very, very dramatically.
And, of course, we’re doing that in partnership with the handset makers. There will be a whole new range of phones that are available this fall around “Mango” at different price points, with different features, particularly from the partners that we have already been working with, Samsung, HTC, and LG. But I’m also very excited about the partnership that we announced in February with Nokia, and this is where they’re going to move to exclusively rely on Windows Phone as their platform.
Just to put this context, they sold 100 million smartphones over the last 12 months. And they’re going to transition that from Symbian over to Windows Phone. They’ve announced that the first phones are going to be available this year, and they’re going to move into huge volume into 2012. So, having them 100 percent dedicated to Windows Phone for their smartphones is an important milestone.
And yet, also, OEMs are continuing to line up behind Windows Phone. We recently announced that Acer, Fujitsu, and ZTE are providing Windows Phones this fall. They will, again, fill out different countries, different form factors, and different price points. So, to take a look at some of those devices in a sneak peek, but also to take a look at the vast array of different devices, I would like to introduce Steve Guggenheimer, who is going to take us through the world of Windows that you’ll be seeing this year.