Microsoft hopes mobile update will help shed its all-business image by Michal Lev-Ram @FortuneMagazine April 2, 2008, 3:03 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons By Michal Lev-Ram LAS VEGAS — While Apple’s iPhone wants to attract business users, Microsoft is desperately trying to move away from its “all work and no play” image. On Tuesday the Redmond-based company unveiled an updated version of its mobile operating system that it hopes will make it more attractive to everyday consumers. Among the new “consumer-friendly” features on Windows Mobile 6.1 is easier navigation capabilities, an enhanced Internet Explorer mobile browser that lets users zoom in and out of pages and “threaded” text messages (which means users can keep track of texts to and from a particular contact like a chat conversation, a feature operating systems like the Palm OS have had for years). Microsoft (MSFT) says it is determined to become the operating system of choice for both work and play. Its new Windows Mobile takes a few steps in the right direction, but it will take a lot more than a handful of minor upgrades for the company to change its all-business image. Unlike Apple’s (AAPL) iPhone, which is known as a consumer and entertainment-driven device, Windows Mobile phones have traditionally been geared for the corporate world. Speaking at the CTIA wireless trade show in Las Vegas on Tuesday, Robert Bach, president of Microsoft’s entertainment and devices division, said he thinks that the company’s reputation as a “mobile solution for people at work” is changing. The software giant’s Windows Mobile platform already powers a variety of smartphones like the Motorola (MOT) Q and Samsung’s Blackjack, and is on track to sell 20 million devices running on its operating system this year, according to the company. But using most of these phones feels more like using a mini version of Windows on a PC than playing around with an iPhone, the new poster child for consumer-centric cell phones. Microsoft is making some headway into the non-business market, though it’s unclear whether this is a direct result of changes to its own software. For the first time, music-phone maker Sony Ericsson is coming out with a Windows Mobile device. The new Sony phone has a much slicker look and feel than most Microsoft devices, but that’s because its Xperia X1 has a software “layer” that runs on top of Windows Mobile and allows for nine customizable panels to appear on the home screen, similar to the small icons on the iPhone interface. The upcoming smartphone, which won’t be in stores until the second half of 2008, is also a touchscreen device — a category that has been a big hit among consumers since Apple’s iPhone came out last year. Microsoft is making other advances on the consumer front. The company recently bought Palo Alto, Calif.-based Danger, maker of the consumer-friendly Sidekick, which is sold by T-Mobile. But it’s not yet clear how the acquisition will play into Microsoft’s overall mobile strategy. Of course, Apple has its own challenges convincing IT managers that its device is secure and practical enough for the corporate world. Which raises the question: Can one phone be all things to all people? Microsoft seems to think so. Unlike Apple, its operating system runs on a variety of phones made by a variety of manufacturers, though currently most of these phones fit into the same business category. If the company wants to become all things to all users — if that’s even possible — than it will likely take more than new zooming features on its mobile Internet browser.