With the dawn of the superphone, where is Microsoft?

The term superphone, coined in the media, speaks to this high-end device class characterized by its "wow factor," a real or perceived buying frenzy, or an otherwise stylish, functional and pretty-to-look-at device. And while selling 1 million devices in the first few days of availability is not a necessary criterion, it is certainly becoming the expectation from the trade press and Wall Street.

Apple's iPhone certainly set the standard with its launch two years ago and continues to reach new heights with its most recent launch of iPhone 3GS, claiming 1 million devices sold in its first weekend in the market. Verizon Wireless in launching RIM's BlackBerry Storm last November sold 1 million in less than three months. Nokia also sold 1 million of its flagship E71 devices last summer in three months. The Palm Pre, debuted this month, certainly fits the bill with its multi-touch capabilities and beautiful interface from a company that has put its stamp on the smartphone. Palm has been trying to keep up with demand as the Pre has been selling out and is on a nice pace, working towards being a million seller.

And even Android is arguably not a hit, yet the G1 (manufactured by HTC) did sell a million units for T-Mobile USA and provided significant improvement in data usage. With Android, the best is yet to come, with tremendous buzz and anticipation from developers as the likes of Samsung, Motorola and LG either launch or are expected to launch devices with this operating system. And the leading Windows Mobile device provider, HTC, currently offers four Android-based devices.

So the question is, where is Microsoft in all of this? With over 50 suppliers (and all of the major suppliers except Nokia), Microsoft has yet to produce the iconic, shiny device that users have coveted. In the past there have been a few devices that have shown some promise. The Motorola Q, Moto's first smartphone with Windows Mobile, had promise, but was known more for its large return rate with Verizon Wireless than anything else. Samsung's BlackJack, BlackJack II and most recently the Jack were all strong devices and flagship WinMo devices for AT&T, but never quite reached rock star status.

There are a number of reasons IDC believes Microsoft has not yet had that iconic device:

1. What the key players listed above have in common is control: control of the device and the operating system. RIM, Apple and Palm all own both the OS and device and deliver an integrated experience. Nokia has spun off Symbian as a non-profit entity, yet the integration of Nokia and Symbian is akin to any of the three device makers and its OS. Microsoft, however, must work with all of its device manufacturers and although the company certainly has influence, each device vendor has its own sets of priorities and a growing number of devices and operating systems it is working on. Unlike the PC, the mobile device is a much more personal device, where the hardware design, look and even color play a role in customer's buying decisions

2. Technology may also play a role here. Apple, Palm and RIM have delivered capacitive touch devices, while Microsoft's key touchscreen devices from HTC are the older resistive touch technology. The experience makes a difference in the end-users' hand.

3. Cost may be a factor. With RIM, Apple and Palm, the device manufacturers own the operating system. Symbian is now a free license as is Android and other Linux operating systems. And while Palm may still license its webOS to other device manufacturers, today, Windows Mobile remains as a mobile operating system where an ODM must pay for the license. In challenging economic times this may be a differentiator. In addition, ODMs must make decisions around how many and what operating systems they will support and cost may be a factor in how many devices they launch with a particular OS. Android, for example, as a fee free OS seems to be garnering a growing number of device makers for multiple devices.

Despite not yet having a superphone, Microsoft is still in a strong market position. Windows Mobile is currently third in the world with 13% share in IDC's Converged Mobile Device market (behind Symbian and RIM's BlackBerry OS) and has about 95% share of the Ruggedized Device market.

Microsoft is also fully aware of not having a flashy device that can stand up to the icons in the market today. Expect to see something from Microsoft in the near future. Likely manufacturers are Samsung or LG. Samsung has had feature phones that have pre-sold more than a million devices, including the Samsung Ultra Touch (1.8 million devices pre-sold) and the soon to ship Samsung Jet (that incidentally is the first feature phone to support Microsoft Exchange ActiveSync and pre-sold 2 million devices). LG, also a key Microsoft ODM, is known for delivery of devices with strong user experiences and attractive UIs and form factors. The challenge in working with vendors such as LG and Samsung will be the need for Microsoft to preserve the distinctive user interface that both companies use to differentiate.