A Microsoft-Branded Mobile Phone? Huge Mistake

According to Northeast Securities analyst Ashok Kumar, Microsoft (MSFT) plans to release its own branded handset, made by Asustek, by early next year. That leaves me with one question: How freaking stupid can Microsoft's management be?

Apple (AAPL) is a company that controls every aspect of its products. That's fine, and everyone expects it. Google released Android for any handset manufacturer to use for nothing, and then eventually decided to come out with a phone of its own. That's less fine, but still within the realm of acceptability in business -- particularly when the company chose T-Mobile as its partner and managed to sell barely more in a month than all of the other handset makers using Android ship in a day.

But Microsoft? First it announces Windows Phone 7 and shows that it can produce impressive product design -- maybe even a viable contender in mobile just when the rest of the company looked increasingly irrelevant. As usual, it will sell the new version to its hardware partners, giving them a reason to keep ordering. And then what does it do? Microsoft plans to compete against them.

None of its partners cared about the Zune, because all of them had largely written off the mobile media player market to Apple. But mobile phones are different. If it offers its own handset, Microsoft will challenge every company that builds handsets based on any version of Windows. It's one thing to use Android for free and then compete with Google, which is notoriously poor at marketing its product. But to pay money to Microsoft for the right to use its OS, only to have the company come out with a competing product, particularly when Microsoft has such deep experience in dealing with retail channels? That's enough to turn all of them into Android- and Symbian-only shops.

What is it about Microsoft that, every time it seems to do something right, it finds a way to take a sledge hammer to its big toe? I've talked before about how Microsoft has a dysfunctional corporate culture when it comes to nurturing innovation and new products. However, the handset buzz goes way beyond dysfunctional and right into the realm of self-destruction. It's as close to a corporate death wish as anything I've seen. The people responsible for the decision should just write their resignation letters, stand up, and walk out of the offices. That's the only way Microsoft will recover its business direction, and the executives will (hopefully) recover their sanity.