Microsoft: The new hip gadget company

Thanks to Xbox 360, buzzworthy new phones and more innovation than rival Apple, Microsoft’s set for a big 2012.

CEO Steve Ballmer (right) and Microsoft were the unlikely cool kids at this year’s Consumer Electronics Show. (Photo: David Becker/WireImage/Getty)

It sounds as implausible as a Facebook-Google merger, or RIM buying Apple: Microsoft becoming the world’s coolest consumer tech company. And yet, somehow, Microsoft has quietly transitioned from the tech world’s favourite joke to a company full of innovative promise.

If that sounds preposterous, look at the facts. Critics at this month’s Consumer Electronics Show raved about the newest Windows phones, many pundits naming them best in show. The Xbox 360 displaced both Nintendo and Sony to lead the video game industry in 2011, in large part because of its novel Kinect motion-sensing controller, which overtook the iPad to become the fastest-selling electronic device ever and has shipped 18 million units to date. Meanwhile, tech publications are almost universally impressed by what they’ve seen of the upcoming new version of Windows, a product usually known for its ubiquity and inelegance and little else.

Individually, each of these represents a small evolutionary step. Taken as a whole, they represent the beginnings of a huge, daunting pivot for the company: a move from being an entity known for clunky operating systems and boring enterprise software to becoming a desired, buzzworthy consumer brand. Astonishingly, they so far appear to be succeeding.

What makes it especially unexpected is that for years, many of Microsoft’s consumer-focused efforts have been lacklustre at best. There are numerous high-profile examples—the failed Zune MP3 player and the disastrous Kin “social phone,” among others—in which Microsoft rather conspicuously and spectacularly failed. What’s more, one might argue that talk of a “turnaround” at Microsoft is itself misleading: though the corporation’s stock price has remained static for some time now, the company has consistently raked in billions in profit. Talk of a new Microsoft, one might say, is purely about perception.

But perception isn’t simply about the whims of a fickle press and public. There’s a certain inevitability to the idea that the age of desktop operating systems and thousand-dollar boxes of enterprise software, the stalwarts of Microsoft’s product stable, is slowly drawing to a close. During a banner 2011 fiscal year that saw $27 billion in operating income, Windows revenue dipped 1%; meanwhile, revenue from the Xbox-led Entertainment and Devices division jumped by nearly a third. Since that still accounted for less than 13% of overall revenue, Microsoft has little choice but to expand further into the growing overlap between hardware, digital media and mobile, of which Apple is the current paragon. And here, brand identity and the capacity to generate excitement are central to success. Microsoft’s new attention to how they are perceived outside the CIO’s suite refl ects the very real economic consequences of hype.

Few things are as symbolic of this shift as Microsoft’s new emphasis on user experience, at the core of which is Metro. The name given to the interface that first appeared on Windows Phone devices, Metro was recently brought to the Xbox 360, and will also form the basis of Windows 8. Rather than showing small icons for each application, like the iPhone, Metro presents you with animated squares that off er constantly updated information about your friends, the weather—whatever. With a clean, readable font and a decidedly “design-y” aesthetic, Metro is just—there’s really no other word for it—cool.

Metro is crucial for two reasons. First, it represents the fi rst time in memory that a Microsoft interface one-ups Apple’s; Metro is both more aesthetically impressive and better lets you perform basic tasks. Second, Metro’s the best example of an emphasis on uniformity of design across Microsoft’s entire portfolio of products. For a company known for behaving as if it were 20 companies rather than one, that is an enormous step forward, perhaps most importantly because it gives Microsoft’s marketing department something that it’s never had before: a clear brand identity. And unlike, say, Samsung—which frequently apes Apple’s designs—with the Metro interface, Microsoft is carving out an approach that is uniquely its own.

The results so far have been promising, as is the growing buzz around the Windows Phone partnership with Nokia. The question now becomes long-term execution. Though Windows 8’s Metro-based design will be found on desktops, laptops and tablets, it requires a singular clarity of vision to create a great operating system suited to such different devices. Similarly, though Windows Phone has become a tech press darling, developers and consumers will need to adopt it in numbers for it to gain traction against iPhone, Android, and even BlackBerry.

What seems certain, however, is that Microsoft has turned a corner. Most significantly, it’s in how their products feel—not just as consumer goods, but as cultural artifacts. After all, Apple’s incredible success hasn’t been simply because of design or marketing. Their iDevices became markers of the contemporary, objects that seemed to bring high-concept visions of the future to the present.

Now, though, it’s waving a hand in the air to select a movie on Xbox or flicking through the interface of a Windows 8 tablet that elicits the feeling of living in a sci-fi film. It’s a remarkable turn of events, one few saw coming. What remains to be seen is whether consumers can accept an idea that seems fantastical in its own right: when it comes to leading-edge design and innovation, it’s now Microsoft that’s leading the pack.

Navneet Alang is a freelance technology critic and blogger.