Trading Strategies & Tech
Is Microsoft Delusional About the Windows Phone?
05 Jan 2016
Microsoft has struggled to gain traction in the mobile world. Its smartphone, then Windows Phone, has a paltry 1.7% market share (as of Q3 2015), compared with Apple’s 13.1% and Android’s 84.7%. What’s worse is that market share is 35% lower than what it was in Q2 2015.
Remember that one time an analyst tried to convince us all that the Windows Phone would surpass Android in market share in 2013? Yeah, I’m guessing she no longer works for that research firm.
So you’d think we’d be hearing an announcement soon that Microsoft is planning on calling it quits on the phone. But oddly enough, that’s not the case. Despite calling the company’s smartphone market share unsustainable in a recent interview, CEO Satya Nadella is somehow trying to convince investors that the device’s market share doesn’t matter at all.
“I think we do ourselves a disservice if we measure our success by just looking at: What’s the market share of HoloLens? What’s the market share of Xbox? What’s the market share of PCs? What’s the market share of our phones? Go back to what I said about the mobility of experience. If you think of this more like a graph, these [devices] are all nodes. Sometimes the user will use all of these devices … sometimes they’ll use only one or two of our devices and some other platforms — so be it. But we want to make sure that we are completing the experience across all of these devices.”
So again, Nadella is trying to turn Microsoft’s focus away from devices and toward services. The problem with that is that developers aren’t creating apps for the Windows Phone like they are for iOS and Android devices. Why would they?
Nadella argues that with new developments with Windows 10 and moving toward making the Microsoft experience fluid across all devices, the company should be able to get some of those “elite developers” back.
That’s a pretty strong assertion coming from the underdog of underdogs in the mobile market. But it’s one the company is standing by. And honestly, Nadella may have a point. He’s been quite successful in steering Microsoft away from the brink of disaster toward which former CEO Steve Ballmer was leading it.
HoloLens has gotten some amazing reviews so far, and the company has been able to revive Xbox and its PC business, despite predictions that both gaming consoles and the PC are dead.
So can Nadella also pull the Windows Phone out of obscurity and get it back to being a profitable business? It’s unlikely. Microsoft already had strong positions with the Xbox and in PCs before analysts began predicting their dooms. The Windows Phone, on the other hand, has never had a strong showing in the market. The company will have to do a lot more than make the Windows experience fluid across all devices to get people interested in their smartphone. Android and iOS are worlds ahead in terms of the services they offer and the user experience, so Nadella’s going to have to do a lot more to convince us that Microsoft can compete.
