Windows Phone 7
Windows Phone 7 - 
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Kai Ryssdal: So here's a question: Whatever happened to Microsoft? I mean, yes, it's got the computer operating system pretty much cornered, and office productivity tools like Word and Excel. But really, what's it done for you lately? That very question lead to today's news. This morning the company embarked on what analysts are calling its last chance to catch up in the world of smartphones. Their new mobile operating system is called Windows Phone 7. It's going to be on a number of different phones next month serviced by AT&T and T-Mobile, at least to start.

Marketplace's Jeremy Hobson reports on exactly how successful the phone needs to be to be considered a success.

Jeremy Hobson: Windows Phone 7 looks kind of like an iPhone or a Droid, but it comes with Microsoft Office and it's heavily integrated with Facebook, which Microsoft owns a piece of. It'll be available on Dell, Samsung, HTC and LG phones here in the U.S. And it will be compatible with 60 carriers around the world.

Ramon Llamas: The name of the game here is distribution, and the way to get that done is number one, have a lot of handset partners out there, and number two, have a lot of carrier partners out there as well.

That's Ramon Llamas, a senior mobile analyst with IDC. He expects by the end of this year, Microsoft will bump up to 7 percent of the global market for smart phones, from 5 percent today.

That's well behind rivals Symbian, Apple, Google and Research in Motion. But Jonathan Goldberg says it might be just enough. He's a wireless analyst with Deutsche Bank Securities.

Jonathan Goldberg: They don't have to beat the iPhone this Christmas, they don't really have to beat Android. They don't have to outrun those very popular phones. All they have to do is outrun the Zune. They have to outrun their own history.

He's talking about Microsoft's portable media player, which lost popularity quickly after it was launched in 2006. Goldberg calls the new Windows Phone 7 a good product. But he says:

Goldberg: Consumers won't approach this in a vacuum. They'll approach it knowing that it's a Windows device and it's a Microsoft device. And I think for a lot of consumers, that's sort of a red flag, and they're going to have to get past that initial hesitation, "Uh oh, is this phone going to crash? Are we going to get the blue screen of death?"

Goldberg says Microsoft is spending hundreds of millions of dollars on marketing to try and get consumers to look beyond those concerns.

In New York, I'm Jeremy Hobson for Marketplace.

Follow Jeremy Hobson at @jeremyhobson