Windows Phone Update Issue Causes Stumble for Third Mobile Spot

The first Windows Phone update from Microsoft (s msft) began to trickle out two days ago, but is causing issues with at least one particular phone model, the Samsung Omnia 7. Owners experiencing the problem, who are reportedly just a small percentage, are left with a useless handset due to the glitch. In order to address the issue and to limit the number of affected customers, Microsoft has temporarily disabled the update process for Samsung devices according to the WinRumors blog. That’s the right approach, but what does this problem say about the Windows Phone 7 ecosystem? Considering Nokia recently chose Microsoft with the expectation of WP7 as the third ecosystem, it’s concerning at the very least.

To be sure, remotely updating phones is challenge for carriers and equipment makers alike. However, this update isn’t bringing any end-user functionality to Microsoft handsets. Essentially, it’s a staging update meant to prepare devices for the first true functionality update, which is expected to bring a copy/paste feature when it arrives by mid-March. Even as such a minor update, the software upgrade is causing issues. If I owned a Samsung Omnia 7 handset with this problem, I’d have one word to describe the situation: inexcusable. Handsets are now considered by many to be a consumer electronics device that must work without fail, so the free passes on snafus are quickly fading.

Getting back to the challenge of these updates: It’s a problem for nearly everyone in the industry at some point. Apple (s aapl) had issues with the iOS 3.1 update in 2009, which caused some iPhone 3G phones to crash or run slowly. Earlier this month, Samsung released and then pulled the Android 2.2 update for its Captivate handset. So the issue is clearly not one that only Microsoft is susceptible to. But as iOS and Android (s goog) run away from the mobile platform pack, Microsoft is relegated to fighting for the third spot along with Research In Motion (s rimm), Hewlett-Packard (s hpq) with its webOS, and others such as Samsung’s Bada platform. That means Microsoft has little margin for error in a tight race. The first update causing issues out of the gate, even to a limited subset of devices, doesn’t send a positive message about Microsoft’s mobile ecosystem.

And that appears to be the very reason that Nokia (s nok) picked Microsoft over Google, RIM and perhaps other players in order to try to revive its status among smartphone buyers. In the official press statement, jointly attributed to Nokia’s Stephen Elop and Microsoft’s Steve Ballmer, this point is made clear:

Today, the battle is moving from one of mobile devices to one of mobile ecosystems, and our strengths here are complementary. Ecosystems thrive when they reach scale, when they are fueled by energy and innovation and when they provide benefits and value to each person or company who participates. This is what we are creating; this is our vision; this is the work we are driving from this day forward.

There are other mobile ecosystems. We will disrupt them.

We’ll see how the first part of the statement plays out, but the final sentence has already come true as some Samsung Omnia 7 owners are surely disrupted today.

Ironically, the timing of this issue has me concerned personally. Over the weekend, I was giving some thought as to who will be the third horse in the smartphone ecosystem race. RIM and HP still have no new products that interest me, although both are outing devices with updated operating systems soon. So I turned to Microsoft. The HTC HD7 I reviewed in November has the large display that I like, so I found a new one on eBay and won the auction at a reasonable $390 for the handset. I’m not having buyer’s remorse yet, especially since the device just shipped today, but given the update slip-up by Microsoft, I’m wondering if my wager would be better off on another pony.

Related content from GigaOM Pro (subscription req’d):