Linked by Thom Holwerda on Fri 15th Aug 2014 11:33 UTC

Speaking of Windows Phone - it seems like it's not happening.

Telecom executives for years have trumpeted the need for a new cellphone platform to provide a counterweight to the dominance of Google's Android and Apple's iOS. Maybe it could be BlackBerry. Or maybe Windows.

Or maybe not. According to the data from IDC, the two top players are only getting stronger, grabbing 96.4% of global smartphone shipments in the second quarter, up from 92.6% a year ago.

Windows Phone’s share of shipments fell to 2.5% of the total from 3.4% a year ago, as shipments dropped by more than 9%. BlackBerry’s share fell to 0.5% from 2.8% - below the market share of the "other" category - amid a total collapse in shipments.

This is a two-horse race, and the rest is fighting over the scraps. Those scraps are enough for newcomers such as Jolla, who don't really need the massive numbers to keep a small company alive, but it's the death knell for platforms from larger, established companies with demanding shareholders.

So far, the whole Windows Phone experiment has been a disaster for Microsoft (and Nokia). They've had to pour so much money into Windows Phone just to keep it alive that it will take them 5-10 years before they will ever make any profit on the platform - and that's assuming it actually takes off. If it continues to muddle as it does now, it will remain a huge money pit - and at some point, shareholders and the new CEO will question its existence.

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Comment by Nelson
by Nelson on Sat 16th Aug 2014 14:31 UTC
Member since:

I don't think there is much to excuse this, its a terrible showing by Microsoft. I was naive to think that this transition would go off without having a sales impact.

Then again, I'm not sure I anticipated the regulatory approval dragging on for as long as it did. It is what it is though.

So sales are flat to negative YoY and QoQ. Definitely bad. Also shows that Nokia was growing its volume despite Microsoft, not because of it. Its understated just how much effort they put into the platform. It showed.

Microsoft with many times over the resources hasn't done anything nearly as impressive. Nokia for al its management faults, did execute really well on their strategy.

Now, looking forward. Where does WIndows Phone stand? Will it be killed? Are the vultures circling the dead carcass? Is this mythical angry shareholder strawman going to take your live tiles away?

No. Microsoft wont kill Windows Phone because the platform brings numerous intangible benefits. In my opinion, Satya can understand and appreciate that.

We have some positive catalysts for 2014 like the 15+ OEMs which signed up after Microsoft eliminated licensing fees and opened up hardware specs.

There's also Nokia's product pipeline that will be ramping up towards Q3/Q4 to watch out for. Including the Lumia 530 which seems to be pushing prices even further downwards than the 520. I've seen the devices from the regional OEMs and their low end devices seemed price in that range as well.

Will it lead to a sales rebound? Well, it can't really get worse without turning into a complete disaster -- so in my opinion yes. Will it be dramatic enough to silence the critics/cynics here? Probably not.

I do think its cute when people try to distill complicated product strategy down to a simple P/L statement. Microsoft has retarded amounts of cash, the suggestion that Microsoft might drop the platform is more OSNews red meat than anything.

Reply Score: 3

RE: Comment by Nelson
by dsmogor on Mon 18th Aug 2014 12:06 in reply to "Comment by Nelson"
dsmogor Member since:

WP might be firmly entrenched around low end category.
It surely delivers best in that niche (if 60% of sold devices can be considered a niche).
Why does it have to be a bad thing?
MS surely will not be able to profit the OS licenses this way but the times has changed and new revenue models provide enough recap.

Reply Parent Score: 2

RE[2]: Comment by Nelson
by Vanders on Mon 18th Aug 2014 22:37 in reply to "RE: Comment by Nelson"
Vanders Member since:

WP might be firmly entrenched around low end category.

That would be embarrassing; to spend all that money to replace an OS that you already had (Symbian) on the low end...

Reply Parent Score: 2

RE: Comment by Nelson
by zima on Mon 18th Aug 2014 21:18 in reply to "Comment by Nelson"
zima Member since:

Or maybe this is Microsoft's "OS/2 moment"? Maybe there's enough place only for 2 big/biggish players...

Reply Parent Score: 2

RE[2]: Comment by Nelson
by Nelson on Tue 19th Aug 2014 00:16 in reply to "RE: Comment by Nelson"
Nelson Member since:

I don't really put much stock in unwritten rules like that, I also don't think that Android is a single "thing" but rather a loose coalition of many competing vendors.

So there isn't just one, or two big "fish". There are many little fishes, each bringing a unique perspective. For example, I actually tried an LG G3 the other day. The buttons on the back were actually pretty cool in my opinion.

It's that experimentation that Android enables that has advanced the state of the art. iPhones on the other hand are more locked down. That's also fine and has also done a lot for how people think of a smartphone today.

There is a role for both, and even a middle ground option like Windows Phone which tries to be empowering to OEMs while balancing the need for a consistent user experience.

The key takeaway though is that the various business models allow for different approaches. Each with pros and cons.

Google profits immensely from a ubiquitous stage on which to present their services. Chrome for example has profited immensely from the prevalence of Android.

But Google's advertising centric business model is complimented by this strategy well.

Apple makes ridiculous bank off of their hardware sales, they also tightly control the software and provide for an extremely consistent and refined experience.

Where does Microsoft fit? Why do they do Windows Phone? Let's put Satya aside for a moment, and try to think about what rationale Ballmer might've presented for keeping WP around.

I think Windows Phone gives them experience in doing large scale application stores, optimizing their OS for smaller and smaller form factors and power envelopes, scaling their development platform to make it easy to write for many different screens, etc.

Windows Phone informs a lot of their approach in general towards mobile computing. So that yeah, maybe they didn't catch the cell phone wave in time to be a market leader. Maybe they'll never get there.

They will be ready for the next wave, whatever it is because of their refining and learning from their experience with Windows Phone.

You can plug in Surface there too if you're looking for justification.

I mean, look, Microsoft has a ton of money. Really, it'd be more wasteful for them not to sink money into refining the process. They'd pay more in the long run by lacking the competencies required to even keep up in today's market.

An example I often cite is Bing (a notorious money hole) being the incubator for Windows Azure, has an ARR of $4B.

Edited 2014-08-19 00:25 UTC

Reply Parent Score: 2