Windows on Phones started to smell funny today

by Volker Weber

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Microsoft never gives up. You knock them down and they get up. Each time you knock them down, they come back stronger. And with the third version, everything is going to be great.

But things have changed. Microsoft is no longer the juggernaut, when it comes to mobile. A low single digit market share, only made possible with cheap handsets that don't generate much profit. Steve Ballmer wanted to turn Microsoft into a company that learns from Apple's greatest strength: vertical integration of hardware, software and services. For Ballmer it all rested on Windows. That's why Microsoft created Surface. A device that would make Windows 8 shine. And he bought the phone business from Nokia, the greatest phone company in the world.

But Ballmer is no more. And neither is Nokia, at least not as we know it. The market is still confused about Microsoft Mobile and Nokia. Who is selling these $20 simple handsets pictured above? (Answer: Microsoft)

Satya Nadella does not need Windows on phones to deliver his vision. He is perfectly fine with Android and iOS. I am pretty sure that the same is true for developers and all those startups that need an app. The ship is turning, as fast as it can. Office 365 works great with iOS and now also with Android.

Microsoft has to win back users for the Windows 10 platform. Windows 8 was a failure, much like Vista was. Unlike in years past however, now there are other options. IBM is in bed with Apple. Not only have they opened up the enterprise channel for Apple and created business software for iOS. They are also deploying Apple notebooks, big time.

That's the war that Microsoft needs to win. They must not lose the enterprise. And for that, they have to cut their losses.

Yes, Microsoft has new devices in the delivery pipe. They were supposed to come out with Windows 10. But then Microsoft fumbled the ball once more. Windows 10 isn't nearly ready for delivery on phones. As Apple is about to rev their iPhone 6/6+ Microsoft is still on a platform that was announced by Nokia in 2013. Who expects them to deliver better and faster with thousands of people let go in the phone business?

This starts to smell like HP buying Palm.

Comments

Sigh...

Ingo Seifert, 2015-07-09

And then I read that Apple seems to be ordering between 85 and 90 MILLION piece of the soon to come iPhone as a starting order. 10 Mio more thatn iPhone 6/6+...
Obviously, the time frame for the delivery is not mentioned, but nevertheless an impressive number. A lot of workers in South China will be sweating this summer finishing all these new toys.

Chris Frei, 2015-07-09

I do not get why on earth Nadella does not need Windows on Mobile. To keep Windows relevant, Mobile is key. Remember, Volker, be on the screen they love. Also, with Windows 10, there are so many synergies and it is all about to *finally* come together.

Yeah, this is like coitus interruptus ;)

Hubert Stettner, 2015-07-09

So, how would Nokia have been any worse off if it had joined the Android crowd back in 2011, versus committing to Windows Phone?

Whilst Ballmer has rightly received a ton of criticism for his part in the ill-fated acquisition, it all stems back to that decision that Stephen Elop made to tie their colours to the Windows Phone mast. Very very sad.

Stuart McIntyre, 2015-07-09

Hubert, the old strategy used to be to sell Windows and then software and services on top of Windows. The new strategy is to sell software and services. And go where the customer is already. On mobile, 97 percent are not on Windows.

Volker Weber, 2015-07-09

You don't have to own the OS of the device in order to "be on the screen they love". You just have to deliver apps/services "that they can't live without".
For consumers i don't see any mobile apps or services from MS that are relevant and exclusive (except for Skype maybe).
However for enterprise customers their productivity and collaboration portfolio (MS Office/Office365 including Exchange, SharePoint and Skype for Business) is clearly the differentiator. So in order to be successful they "only" have to make sure, that enterprise customers stick to Windows on the desktop and continue to get value from Office365 on all popular / preferred devices. Windows on phones is irrelevant in that context.

Erik Schwalb, 2015-07-09

As with all 'corporate memos', you can read almost anything you want into Satya's yesterdays email to the troops. And so the reactions vary from "Microsoft's restructuring of their phone business was necessary, obvious, and good for Lumina" to "Did Microsoft just give up on Windows Phone?". I think that's the real problem here. Nobody knows what's exactly going to happen with Windows Phone - I'm not sure even Microsoft does. Personally I think Windows Phones are going to get much more expensive. Right now Lumias (at least in Germany) are selling way under MSRP. With fewer models and fewer units produced, I think this is going to change.

Max Nierbauer, 2015-07-09

According to http://recode.net/2015/07/09/what-its-really-like-to-use-a-windows-phone/ they just missed to throw money at - let's say - 200 VisualStudio warriors to get decent clients for Snapchat, Slack, YouTube et al.

Martin Kautz, 2015-07-09

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