Microsoft Corporation (MSFT): Xbox Is The New Honey Mustard

Microsoft Corporation (NASDAQ:MSFT)’s move last week to beef up Xbox Music by making it available on iOS and Android devices is smart. Microsoft’s own mobile operating system for tablets and smartphones is commanding just 4% of the global market. If the software giant wants to get noticed, it’s going to have to get in front of the consumers who have already chosen Google Inc (NASDAQ:GOOG)‘s market-leading open source platform or Apple Inc. (NASDAQ:AAPL) products. That’s nearly everybody at this point.

Don’t be surprised if the Xbox-less Xbox Music isn’t the last thing Microsoft Corporation (NASDAQ:MSFT)Microsoft slaps with the Xbox label.

It’s been two years since Microsoft Corporation (NASDAQ:MSFT) stopped updating its Zune line of portable media players. Zune was a bold attempt to make a dent in Apple Inc. (NASDAQ:AAPL)’s iPod market, but it fell woefully short. The Zune name lingers, but only because the brand isn’t on the same level of failure as Microsoft’s Kin smartphone or Vista flavor of Windows.

Xbox, on the other hand, is a rare hot brand in Microsoft Corporation (NASDAQ:MSFT)’s arsenal. It remains the best-selling console in this country, and that will probably remain the case when the Xbox One hits gamers in two months.

The Xbox isn’t just about video games anymore. Halo fans may argue otherwise, but Microsoft Corporation (NASDAQ:MSFT)’s console has evolved into a multimedia hub. A substantial chunk of the Xbox One presentation during June’s E3 unveiling was dedicated to the new system’s video-viewing features. Sure, the enhanced specs will make gameplay even better, but if its aim is spot-on, we’re going to be seeing the Xbox One as the cornerstone of a family’s home entertainment system.

In that sense, it’s perfectly natural to see Zune branding give way to Xbox products. However, why should it stop there?

Microsoft Corporation (NASDAQ:MSFT) is paying $7.2 billion to Nokia Corporation (ADR) (NYSE:NOK) for its handset and services business. The move will corner the market on Windows Phone devices, since the handful of other manufacturers still weighing the decision to put out Windows Phone handsets will move on after the purchase is complete. Windows Phone will become more like Apple Inc. (NASDAQ:AAPL)’s iOS than the open-ended realm of Google Inc (NASDAQ:GOOG)’s Android. Keeping all that in mind, would anyone be shocked if Microsoft puts out an Xbox Phone next year as a distinct product line from its Nokia’s somewhat successful Lumia line of devices?