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Windows Phone death ‘a storm in a teacup’ – it has long been at rest


By John McCarthy, Opinion editor

July 12, 2017 | 8 min read

The Drum's John McCarthy offers his assessment on the recent headlines heralding the demise Microsoft's ill-fated attempt to penetrate the mobile phone market. And also probes expert opinion on the potential of other parties to rival Apple and Google's dominance of the mobile operating system market.

Windows Phones

'The mobile platform is going to be replaced by more immersive platforms like augmented reality and voice interfaces'

The Windows Phone is dead – again – or it is according to the media in response to Microsoft quietly ending support for its Windows Mobile 8.1 OS. The headlines, almost cyclical in nature, have appeared at every cough and splutter in Microsoft’s doomed-to-fail smartphone efforts over the last few years. Here's three of The Drum's over the last year and a half (1), (2), (3). But the sheer truth is that Windows Phone never lived up to the legacy of the Nokia devices factory in Finland that were producing Windows Phones since Microsoft's costly takeover in 2014.

Heralding a reduction in fortunes, Window’s Phones dipped to less than 1% in the US at the turn of 2017, according to Kantar. In the UK, eMarketer said Windows Phone use is expected to dip to 5.5% of the smartphone-owning population by 2019, down from a high of 7.2% in 2015, a phenomenon that could by fast-tracked by the lack of upcoming technical support and the wave of 'Windows Phone is dead' headlines.

Emarketer Windows Phone market share UK

Rafe Blandford, mobile strategist at Digitas LBi, once-upon-a-time a muted advocate for Windows Phones, like myself, told me that the recent furore was "a storm in a teacup".

He added: "The Windows Phone was already dead after Microsoft decided to crawl away from the consumer market. That ship has sailed, it has less than 1% market share in the US.

“It hasn’t been updated for two years, so it came as no great surprise, but it is a symbolic moment. It has no major impact on consumers, the only impact may be on enterprise.”

Microsoft long held the belief that it was the company to break the mobile operating system duopoly of Google’s Android and Apple’s iOS but Blandford maintained that it is not simply a two-horse race.

For instance, in China and other Asian markets non-Google produced Android devices are making inroads to the market, with the backing of the continent's internet giants, manufacturers and their workshop of apps.

However, it is also too complicated an ecosystem to look simply at OS users, Blandford said. He further explained to me: “Within the iOS and Android ecosystem, a lot of the apps have effectively become platforms, Facebook says it has a platform strategy while its apps go past one billion users (2 billion when looking at Facebook).

"Snapchat is trying to do the same thing and so is Amazon. The most valuable thing now is actually the apps themselves – rather than the devices, or even the operating systems they are running.”

While not preferable for a company that has been generating operating systems for well over two decades, Microsoft has a beachhead on Android and iOS. While people may not be using Windows OS on mobile, it’s likely they are using Outlook or Word or the Cloud or Skype or any of the other services bundled with Office 365, albeit via apps on alternative platforms.

But technology is disrupting the definition of what an operating system even is. With the now defunct 8.1 operating system, Microsoft has integrated its voice assistant Cortana with its mobile devices. Where the likes of Microsoft and Apple have pushed their respective voice assistants onto mobile devices, Amazon, is arguably the most successful party at implementing the technology into the centre of people’s homes, and has made it part of the consumer path-to-purchase.

On the evolution of OS, Blandford told me: “The mobile platform is going to be replaced with other immersive platforms like augmented reality and voice interfaces in the next few years. By looking at what Amazon has done with voice assistant Alexa, we can see what the next generation of platforms will look like. Furthermore, there was a shift from desktop to mobile, the next will be mobile to AI [artifical intelligence] which will create an opportunity for new entrants.”

And while Microsoft slinks away from mobile, its five-year-old Surface tablet business builds respect within enterprise and consumer communities, with it breaching $1bn in quarterly revenue several times since 2015.

Blandford reflected that it is not all bad news for Microsoft: “The Surface devices have become a helpful and powerful brand that is actually really well thought of. You wouldn’t really be laughed out of the room if you suggested that Microsoft is the most innovative PC hardware maker over the last couple of years.”

Of course, Microsoft has retreated and is looking to return with a device suitable for the next generation of mobile. Microsoft chief executive Satya Nadella has hinted at as much recently.

He recently proclaimed: "We're making sure that all of our software is available on iOS and Android and it's first class, and we're looking for what's the next change in form and function. What we've done with Surface is a good example.

"No one before us thought of two-in-ones, and we created that category and made it a successful category to the point where there are more two-in-ones coming. And that's what we want to do. So when you say we'll make more phones, I'm sure we'll make more phones, but they will not look like phones that are there today."

eMarketer analyst Bill Fisher, argued that when companies like BlackBerry and Microsoft retract from the market, "it will be barely noticed," so small is their share, and so competitive is the space that there is rarely a last hurrah. Maybe something resembling the many "deaths" Windows Phone has had.

Fisher said that Windows Phone "has been trying to compete in a vast 'sea of smartphone sameness' where market share has been dominated by Android and iOS. Differentiation has become a harder and harder exercise. Microsoft’s Lumia phones attempted, successfully to begin with, to compete on camera quality. However, Apple and various Android-based smartphone manufacturers quickly caught up and essentially overtook Microsoft.

"Importantly, while iOS took the top end of the market, very-competitively-priced Android devices took charge of the mid-end of the market. Microsoft was a little betwixt and inbetween."

On whether there is a space for a third player in the mobile OS market, Fisher first simply said 'No', then expanded his answer: "There have been numerous attempts, and the same number of failures. iOS has a very loyal audience at the top end, while Android is able to hoover up everyone else at various (and very competitive) price points. Any other OS is going to have to offer something above and beyond, and it’s very difficult to see what that could be."

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