Windows Phone Gets an HTC Flagship. More Needed.
Yesterday, HTC unveiled the rumoured HTC One (M8) for Windows. It’s a Windows Phone version of the HTC One (M8), HTC’s flagship Android smartphone. The device will initially be sold in the US through Verizon, and with AT&T later in the year. Verizon is already offering the phone for $100 on a two-year contract, the same price as its Android counterpart.
HTC has a long history of working with Microsoft mobile operating systems, having cultivated a portfolio of popular Windows Mobile devices including the TyTN series introduced in 2006. It’s also manufactured several Windows Phone devices in the past few years, most recently the HTC 8XT. However, operator support and sales of those phones have been muted.
The HTC One (M8) for Windows is an example of OEM hardware reuse, a trend predicted by CCS Insight in 2012 (see CCS Insight Hotline Predictions for 2013 and Beyond) whereby “device manufacturers will use the same hardware for different operating systems. The same smartphone will be offered with Android, Windows Phone or another operating system”. We believe that other smartphone makers are evaluating the use of Windows Phone on their existing hardware, and we expect to see more key Windows Phone devices in 2014 and 2015. An increase in the number of existing flagship names running Windows Phone will depend on Microsoft’s backing of original equipment manufacturers (OEMs).
It’s a critical time for Microsoft’s mobile platform, especially in the US where previous marketing pushes have been met with limited sales. CCS Insight estimates that Windows Phone had a global share of 2.7% during 2Q14, and Microsoft’s declining market share comes as smartphone sales are flattening and Asian OEMs are further commoditizing the market with popular, low-cost Android phones. We believe that Microsoft is providing direct financial incentives to HTC for the port to Windows Phone; it’s a refreshing acknowledgement from Microsoft, and an encouraging strategy that should be taken further. Microsoft must look to get Windows Phone into other high-profile devices from brands like Samsung, Xiaomi, LG and Sony, with a particular focus on flagships such as the Galaxy S6 or Mi 4 if Windows Phone is to gain any real traction in a market dominated by Google and Apple.
It’s tempting to contemplate the future role of Nokia-branded devices when Microsoft’s own hardware is diluted by other OEMs — it’s not a perfect analogy, but we’re reminded of Google’s purchase and subsequent sale of Motorola Mobility. We expect to see more changes in Microsoft’s organisational structure that will affect its Nokia division.
Microsoft is likely to have made this decision risk-free for HTC. Microsoft’s original business model was to charge for the platform, but the company now allows its free use and we believe that Microsoft is providing other incentives to device makers. HTC’s new phone is an interesting experiment for other brands. Microsoft must put its chips on the table at this late stage, in need of more high-profile test subjects.
Subscribe to our blogMake sure you don't miss out on our fresh insights on topical news in the connected world
"*" indicates required fields