The Future of Windows Phone Is Not Looking So Good
Times are looking a little tough for America’s least-favorite smartphone. Microsoft’s chief executive Satya Nadella announced what Nick Wingfield at the New Yew York Times characterized as a “broad rethinking” of the company’s mobile phone strategy. The change includes cutting up to 7,800 jobs, primarily from Microsoft’s phone business, and writing off nearly the entire value of its Nokia acquisition, and is widely regarded as an acknowledgment that the acquisition was a multibillion dollar mistake by former chief executive Steve Ballmer, who thought it would make Microsoft more competitive against rivals like Apple, Google, and Samsung.
Instead, Windows Phone has languished at the bottom of the pile when it comes to consumers’ choices of smartphones and mobile operating systems. Statistically speaking, most people have never used a Windows Phone, prompting Re/Code’s Lauren Goode to write an article on “what it’s really like to use a Windows Phone,” an excellent read for the curious. For the time-strapped, Goode’s argument can be summed up in the quote, “The experience isn’t as terrible as the reports from mobile analysts might lead you to think. It’s really not bad at all.”
Adrian Kingsley-Hughes at ZDNet posits that Microsoft’s $7.6 billion write-down of its Nokia acquisition and its aggressive layouts mark the end of the line for Windows Phone. Ina Fried at Re/Code reports that it’s difficult to imagine that Microsoft’s massive phone layoffs will lead to anything “other than an eventual exit from the phone business.” Tom Warren at The Verge reported that the future of Microsoft’s mobile strategy will be less about phones, and March Hachman at PC World thinks that the only way out of the big Windows Phone mess is for Microsoft to follow Apple’s lead.
To be clear, Microsoft isn’t going to stop making smartphones — at least not anytime soon. But Nadella said that the company will no longer focus on the growth of its phones business, and will instead place a new emphasis on expanding the “ecosystem” of products, including phones, that run its Windows software. Since becoming chief executive, Nadella has increased the development of apps and services for Google’s Android devices and Apple’s iOS products.
Wingfield notes that Ballmer acquired Nokia primarily because the partnership between the two companies was in jeopardy, and Microsoft feared that without Nokia, its mobile phone business would collapse entirely if Nokia switched its allegiance to Google’s far more popular Android. Both now and at the time that the deal was announced in 2013, Nokia was the most important manufacturer of Windows Phones.
Microsoft has continued to lose market share in smartphones since acquiring Nokia’s handset business, and has failed to turn the Windows Phone operating system into a robust alternative to iOS and Android. According to Nadella’s memo, rather than looking to appeal to all smartphone shoppers, Microsoft will narrow its focus to three types of customers: business users who want strong management options, excellent security, and productivity apps; buyers shopping for inexpensive smartphones; and Windows fans. Fried notes that it’s difficult to imagine Microsoft gaining ground by devoting fewer resources to the mobile phone business at a time when many other companies are struggling. Counting more on partners is also a risky strategy, given that most have devoted only modest resources to Windows Phones devices, and some deciding after a device or two that the platform simply wasn’t worth the trouble.
Microsoft’s last hope for Windows Phone is Windows 10, the next version of the Windows operating system. For the first time, the same software will run on a wide variety of devices, including smartphones, tablets, PCs, and even the Xbox. The move to unify all of these devices with a single operating system seems aimed at attracting interest from developers, who can build universal apps or port apps from iOS and Android. That, in turn, will appeal to customers, especially given that the dearth of apps for Windows Phones has long been a major drawback of the platform.
Microsoft has promised that it will add a much-needed flagship phone to the Windows Phone lineup — something it hasn’t had for several years, since the Nokia Lumia 1020. That may be crucial to convincing shoppers to choose a Windows Phone over an iPhone or one of the many phones running Google’s Android. But as Fried notes, Microsoft will need products that are demonstrably better than the competition to do so — something that its recent announcements bring it no closer to achieving.