While both Microsoft and Google excel in their own spheres, the one thing they should steer clear from are screws and screens.

Sales of Apple?s iPad and iPhone 4 have been robust as expected, but Google?s Nexus One failed to meet expectations and Microsoft is raising the white flag on its teen-targeted Kin less than two months after its heavily marketed launch. Perhaps the lesson is stick to your knitting, and in the case of Google and Microsoft, it may behoove them to promote their respective operating systems?and continue to grow their mobile search and mobile advertising revenues?rather than try to be handset manufacturers.

?Certainly one issue Apple doesn?t face that Google and Microsoft do face is that Apple is not looking to license its operating system, so there is no conflict between its needs and licensees? needs, while both Google and Microsoft do have that conflict,? said Ross Rubin, director of industry analysis at the NPD Group, Port Washington, NY.

?Both decided to stay out of the way to a certain extent?Google decided to pursue direct distribution and avoided carrier deals, and the Nexus One sales suffered due to not having access to those strong sales channels,? he said. ?The Kin had a specific target user, teens and twenty-somethings, as opposed to Windows Phone 7 devices, which should have a broader target and access to an app store.

?Microsoft and Google had some mixed motivation in terms of not wanting to compete directly with licensees of the operating systems that they promote.?

The iPhone outshines Nexus One, Kin
While its Android operating system is an undisputed success, direct sales of Google?s Nexus One have not met expectations?a sign that round one of the handset distribution battle has gone to the carriers.

With both Sprint and Verizon Wireless refusing to offer the Nexus One at a subsidized price, Google has had to rely on its direct-to-consumer ecommerce portal?selling the smartphone at $529 a pop?and on distribution through T-Mobile USA, the No. 4 carrier nationwide. That strategy has not enabled the Nexus One to live up to the hype (see story).

Nexus One sales are said to be poor.

Reports indicate that Google sold roughly 135,000 Nexus One phones in their first 74 days on the market. In comparison, Motorola sold 1.05 million Droids in the same timeframe.

Kin sales have not met expectations either.

The Yankee Group estimated that Kin sales were above 1,000 units but did not surpass 10,000 units over the two-month period since its launch. Other sources speculate that sales could have been as low as 500.

In comparison, Apple sold 1.7 million iPhone 4 units within three days of the device's launch. Since this number included pre-orders, sales have slowed down since then.

On the other hand, sales of the iPad are accelerating and have now hit the 2-million mark. It took Apple more than 28 days to sell its first million, but only 22 days to go from 2-3 million.

Different core competencies
One of the truisms of marketing is that you get your best business from existing customers, that is, from repeat business. The 80-20 rule states that 80 percent of your business comes from 20 percent of your customers.

Apple?s ability to create buzz around product launches and the magnetic hold that it has over its customer base are currently unrivaled.

?Apple has been successful thanks to an intuitive user interface, smart marketing and to some extent a strong brand halo effect,? said Dmitriy Molchanov, analyst at Yankee Group, Boston. ?Apple's specialty is in building reliable, stable and intuitive user-interfaces.

?Google specializes in cloud-based services,? he said. ?It wants to get consumers more familiar with interacting with the cloud.

?With the Kin, and now Windows Mobile 7, Microsoft seems to be building a mobile offering that focuses on social networks and quick, easy interactions with friends.?

With Google?s acquisition of AdMob and Apple?s acquisition of Quattro Wireless and the launch of the iAd network, all three companies are going head to head in the mobile advertising space.

While Google is still the leader in search, Microsoft is showing progress with its Bing search engine, both online and mobile, including a deal with Verizon Wireless. Mobile search is one area where Apple does not have a presence.

Each company has its own core competencies, and there is a fine line between branching out and spreading one?s self too thin.

Google and Microsoft have plenty going for them. In the face of Apple dominating smartphone manufacturing, and now tablet manufacturing, maybe Google and Microsoft should say, ?So what?? and continue with their bread-and-butter businesses.

?Apple?s strengths are the vertical integration of hardware software and services, clearly very strong design capabilities, its franchise in digital music and it has perhaps the strongest brand of the three companies,? Mr. Rubin said. ?It also has a direct retail channel, so customers can get hands-on and look at how the phone fits into the rest of the Apple ecosystem.

?Microsoft has strong ties with third-party developers?it is sort of in the middle between Apple and Google in terms of the openness of its platform and the extent to which it will allow customization,? he said. ?It also has the strongest ties of the three to game developer community.?

In addition, Microsoft has a strong suite of Web services?Windows Live, the Zune music service, Bing and Xbox Live?as does Google.

?Google is the most open of the three, and it has a huge advantage in that it gives away the OS for free,? Mr. Rubin said. ?It also has an aggressive release schedule, with two to three major releases per year.

?Its suite of Web services has a somewhat different focus than Microsoft,? he said. ?Google is also allowing carriers and OEMs a good degree of leeway in terms of customization, creating a good amount differentiation in the marketplace.?

Not-so-secret strategy
While sales of the Nexus One have been nothing to write home about, there is evidence that it has furthered Google?s agenda anyway.

?Google may have been more successful than critics think,? Mr. Molchanov said. ?The majority of Google's revenues come from Google ads, and Google benefits whenever it can get more consumers online.

?It designs products like Android and Chrome OS to get consumers online and to give them the fastest browsing speeds possible while they're there,? he said. ?Google's goal with the Nexus One was less about selling devices, and more about getting consumers familiar with mobile browsing and with the Android OS.?

To some extent, Google has been successful executing that strategy.

Android now has 5 percent worldwide market share, which means sales of roughly 14 million units, according to Yankee Group.

To put that number in perspective, iPhone has roughly 15 percent worldwide market share.

?Android's success is far more important to Google than the success of the Nexus One,? Mr. Molchanov said. ?A few months ago, Google told Verizon shoppers to buy the HTC Incredible, an Android phone, instead of a Nexus One.

?In Microsoft's case, the Kin's failure should have been foreseen,? he said. ?The Kin phone was a by-product of their purchase of Danger, which manufactured T-Mobile's successful Sidekick phones.

?Forcing the Sidekick phone to run a version of Windows CE, pricing the phone like a smartphone and giving it a data plan despite its lack of apps and games was 'akin' to shooting it in the foot.?

Handset or hand-wriging?
So will Google and Microsoft give it another go as an original equipment manufacturer? Will there be a Nexus Two? Will Microsoft to rebound with handsets based on its soon-to-launch Windows Phone 7 OS?

?Google is a software company, not a hardware company,? Mr. Molchanov said. ?For that reason, I think Google's future in mobile rests largely on the success of Android.

?Microsoft has invested a substantial sum in Windows Mobile 7 and early looks at Mobile World Congress do look impressive,? he said. ?However, at this point, Microsoft is playing catch-up and the advanced OS is several development cycles behind its competitors.

?The launch later this year does look to be a make-or-break moment for Microsoft in the mobile phone space.?

There has been some speculation that Microsoft might come out with a slate tablet based on its new OS.

That might be a better play, because in the smartphone market, it must contend with not just the iPhone and Android devices, but also Research In Motion?s BlackBerry.

?Microsoft now has to compete with two companies that have perfectly wonderful products and operating systems that seem to meet everyone?s needs and even seem to be sufficiently able to address the corporate market,? said Oren Michaels, cofounder/CEO of Mashery, San Francisco. ?And there?s a third competitor?RIM.

?Microsoft has typically provided its PC OS to corporate customers and Apple has not, and RIM has typically provided its mobile OS to corporate customers and Apple has not, but Apple is making inroads [into the enterprise market],? he said. ?I don?t see Microsoft having an easy time beating Apple or Andorid with the cool factor, so really the company that Microsoft will have to be competing with is RIM.

?At this point RIM owns mobile exchange, so can Microsoft take back control of their own email product? It got supplanted on mobile by RIM.?

Final Take
Dan Butcher, staff reporter of Mobile Marketer, New York.