Goodbye Windows Phone

What's Next for Microsoft in Mobile?

At the beginning of 2017, we wondered if there would ever be a third mobile operating system to challenge Apple's iOS and Google-controlled Android. The question bordered on being rhetorical (see The iOS and Android Duopoly: Will There Ever Be a Third Mobile Platform?).

During the first quarter of 2017, we estimate that less than a quarter of a million Windows-based smartphones were sold globally. Most of the sales were an effort to clean out inventory. Microsoft's mobile platform has less than 0.1 percent of smartphone sales, so it's not difficult to predict its future. With a sliver of sales and shrinking number of devices using Windows Phone, developers are ignoring the platform. It's a matter of pragmatism. Microsoft's mobile defeat wasn't owing to a lack of effort. Start-ups such as Jolla faced incredible challenges, but the Microsoft saga highlights the tough odds when it comes to altering the smartphone market.

News that Microsoft is pulling support for Windows Phone 8.1 is a public sign of abandonment. The company's top-level strategy has changed and it's been backing away from the market for smartphone operating systems for some time.

It's important to acknowledge that Microsoft's strategy wasn't necessarily the problem. Its so-called "Metro" design language and "live tiles" arguably offered a superior user experience in some areas compared with Android, but the momentum was difficult to counter. Microsoft acquired a solid brand in Nokia and pulled together some operator partnerships, for example, with AT&T, but this wasn't enough. Furthermore, the vision for Windows 10 providing a single user experience across multiple devices — rather than two distinct mobile and desktop platforms — is still valid even though Windows Phone failed.

Now the question is about Microsoft's vision in the very long term. The smartphone form factor has been established; there's no breaking the mould of the ubiquitous black flat screen. But patterns are meant to be broken and the company is betting on numerous areas. The steps it's taking to support ARM-based devices and its moves to integrate cellular (LTE) capability suggest there's more to come. Its efforts in the area of head-worn computing with HoloLens should also be noted.

We believe it won't be long before a mini or smaller version of the Microsoft Surface arrives, offering a new dimension to the company's mobile devices continuum. It could be a stepping stone to a bold reinvention of what a smartphone is and, importantly, a premium strategy to align to the Surface brand — something Microsoft failed to deliver with Nokia. What that becomes and whether it forms part of the rumoured "Surface Phone" remains to be seen and it could be many years before it comes to fruition. However, in our view, there's no question that Windows 10, Surface, Cortana and artificial intelligence will be at the centre of this redesign.

This entry was posted on July 24th, 2017 and is filed under Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted By Raghu Gopal On July 24th, 2017

Simon Rockman
- 2017-07-28 at 11:16
It's such a shame. Every now and again I get a new Android phone, intending to wean myself off my Windows phone and find myself going back. This morning I left my shiny new Android phone at home and took the HP Elite.
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