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Quick activation is guaranteed for at least 89,000 of the Windows Phone 7 smartphones from Samsung and HTC that debut next week. Microsoft is giving free Phone 7 devices to its employees, adopting a tactic also used by Google and Apple. An analyst called Phone 7 “highly advanced,” but Gartner thinks Microsoft’s market share may actually decline.

No one can predict how the new devices powered by Microsoft Windows Phone 7 will sell when they hit the market next week. But the software giant can be sure that at least 89,000 of the smartphones made by HTC and Samsung will be quickly activated. The company is giving them away to all its employees.

‘Smart Idea’

While that number of users is too small to have much of an impact on the analytics of major web sites and industry trackers who keep tabs on smartphone traffic, it will quickly get the phones on the street and in the eyes of consumers in time for the holiday shopping season.

“The first step toward getting the word out is naturally to give it out internally,” said analyst Gerry Purdy of MobilTrax. “When you think about it, each person could show the phone to at least 10 people. Before you know it, almost a million people have seen it as a result.”

Google and Apple have also given out their smartphones to employees, and Purdy said Research In Motion often gives free BlackBerry devices to analysts.

Microsoft’s emphasis on brand loyalty was clear last week when Melinda Gates, wife of cofounder and Microsoft Chairman Bill Gates, told The New York Times there are no products from rival Apple in their home, and her kids have been denied iPods. “You may have a Zune,” she said she told them.

A Microsoft spokesperson declined comment about which smartphones are being offered to employees and whether service will also be comped. News of the freebies came after CEO Steve Ballmer told the company’s Professional Developers Conference on Thursday that he believes the company can rebound from its stumbling efforts to enter the smartphone market, where its devices lag behind those powered by Google’s Android, Apple’s iOS, RIM’s BlackBerry OS, and Nokia’s Symbian.

“There’s no question we’re early” in the effort to keep up, Ballmer said. Microsoft suffered a setback last summer when it discontinued a line of social-network-oriented KIN phones aimed at younger users after only six weeks on the market. Those phones ran on software acquired by Microsoft when it took over Danger, maker of the then-popular T-Mobile Sidekick devices.

Dire Prediction

Purdy, who has seen demonstrations of Windows Phone 7, called it “highly advanced” and a “whole new ballgame” compared to previous Windows mobile systems.

But Gartner Research sees Microsoft essentially running in place, with a slight bump expected from the Phone 7 debut on Nov. 8. It predicts only a 3.9 percent share of the smartphone market by 2014, down from Microsoft’s present 4.7 percent share.

At that time, Symbian and Android devices will be about tied for domination, with 30.2 percent and 29.6 percent of the market, respectively, Gartner predicts.


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