Is it too late for Windows Phone?

Is it too late for Windows Phone?

Summary: Microsoft Mobile, the new name for the former Nokia Devices division, is banking on lower prices and a broader selection of devices to increase share for its Lumia devices. But price alone might not be enough to hit double-digit market share worldwide.

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Microsoft's marketing for its new Lumia phones emphasizes price

“Is it too late for Windows Phone?”

The reporter sitting to my right at a private press event at the IFA tradeshow in Berlin yesterday asked that question of Chris Weber, Microsoft’s Corporate Vice President of Sales for mobile devices. That’s probably not the opening question that a self-professed “sales guy” wants to hear at the first Lumia launch event since the Microsoft-Nokia deal closed, but there it was.

It’s a question I hear often lately, usually from tech journalists who’ve decided that the smartphone space has turned into a two-horse race, with Apple and Samsung a furlong or more in front of a pack of also-rans that includes Microsoft/Nokia.

“It’s not too late at all,” was Weber’s reply. Which is also what you’d expect a sales guy to say.

“We're just starting a refresh of the portfolio,” he continued, “bringing prices lower than we've ever done before.” That refresh, Weber argued, will drive momentum, with the new lower price points giving Microsoft “volume and scale,” which in turn drives the ecosystem. “And we are going to continue to push price points even lower.”

During our 25-minute interview, I heard the phrase “new price points” over and over again.

If you’re skeptical that lower prices alone can drive volume, you’ve got lots of company.

But Microsoft Mobile, the new name for the former Nokia Devices and Services division, isn’t just betting on lower prices to help it make up ground on its much larger rivals. Instead, the company is hoping that it can win converts by offering flagship features on devices that don’t carry the high price tags of new, high-end offerings from Apple and Samsung.

That’s the logic behind the new Lumia 830, Microsoft’s “affordable flagship” device, which includes features not normally found in a new, elegant-looking, extremely thin and light device that sells for 330 Euros (U.S. price isn’t announced yet). That feature set includes integrated wireless charging and a 10MP PureView image sensor with Zeiss optics and hardware image stabilization.

The 830 won’t replace Microsoft’s real flagship devices, including the Lumia 1520, Icon, and 930, all of which have faster processors and better displays to justify their higher price tags. But they’re a step up from the lower-cost devices also announced today, and collectively they give Microsoft Mobile a full global portfolio of Lumia devices at a wide range of prices.

That’s a different philosophy from either Apple or Samsung, which typically introduce one or two new devices and then turn older devices into the lower-priced midrange models. Can’t afford the latest iPhone or Galaxy? Try last year’s model or, if your budget is really tight, the one from two years back.

Microsoft’s hoping its focus on photography will divert attention from the dreaded app gap. There are some genuinely innovative features in the Lumia Denim firmware update available today in the new phones and coming later this year for its current flagship devices. But will selfie-obsessed consumers be drawn to Microsoft’s new Lumias?

I asked Weber if there’s a market-share target that Windows Phone needs to hit before it can be considered a success. “Generally speaking,” he replied, “getting to double-digit share in key markets is something we look at.” Weber pointed to the fact that Windows Phone has already hit that target in 14 countries, including the U.K., but other key markets, notably the U.S., still lag far behind.

The real missed opportunity for Microsoft so far is in its traditional core business, selling to enterprise customers. New Windows Phone devices have manageability features that should appeal to traditional IT buyers. The trouble for Microsoft is that those once powerful customers aren’t making the buying decisions for most mobile devices, which are purchased by consumers and then brought into the business.

Historically, success or failure in a tech market is determined not just by a company's own strategy but by luck. Apple is unlikely to stumble. But a misstep or two from Samsung could turn out to be a lucky break for Redmond.

The end of this year is a make-or-break opportunity for Microsoft Mobile. The disruptive aspects of the Nokia acquisition are in the past. The division needs to be able to post some solid gains in market share to prove that its bigger rivals aren’t going to run away with this race. If it can’t do that, then maybe it really is too late.

Topics: Mobility, Windows Phone

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251 comments
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  • MS's Own Fault

    In 2007 MS had 42% (currently about 3.4%) of the US Market in smart phones and due to their utter failure when faced with competition they lost that market. A lost market is very difficult to re-conquer once you have lost it and will take billions of dollars and little or no profit for some time to come trying just to recapture market share.

    Is it too late ?

    Probably and MS investors will get a better return for their money if MS turn their attention to other products and services.
    Alan Smithie
    • Lost Market, ROI

      Windows Phone isn't about return on investment as an independent business. Windows Phone is purely a defensive play. If another OS becomes dominant in the tablet and phone space, the owner of that OS is in an ideal position to crush Windows in the home laptop/desktop space. If another OS becomes dominant in the tablet, phone, and home laptop/desktop space, the owner of that OS is in an ideal position to crush Windows in the Enterprise.

      Defending from that threat is easily worth a couple billions per year. Same reason why Intel is happy to sell ultra low power chips at a loss.
      Sacr
      • It Isn't About The OS

        People stopped caring about that a long time ago, it's all down to what services you offer and at what price. The OS is just an invisible (or should be) means to an end. Take Skype which runs on just about everything is the correct way MS should be moving and is finally waking up to Office being OS agnostic. MS really has to be careful here in picking it's markets otherwise it will spread itself too thinly across too many areas suffering excess horizontal and vertical integration.
        Alan Smithie
        • Same as it was decades ago

          Services and Apps are not really different from Software and Applications. Native applications still dominate the game.
          Until "write once run anywhere" becomes reality, the rules of the game won't change.
          Sacr
          • Write Once Run Anywhere...

            We were making progress until Apple and iOS.
            robradina@...
          • Progress?

            To this day my favourite way to test my laptop fans are to run a java or a Flash application. I don't consider this progress. And I would add that those application don't care about a OS philosophy (menu, keyboard shortcuts, ...) that native application automatically inherit when built in a more "native" way.

            Just my $0.02. As long as a user is happy I don't care much about his choice of technology or apps.
            mtifo@...
          • Native vs. Cross-Platform

            The reason a cross-platform app doesn't behave like a native app has far more to do with the developer than building it in a "native" way (not entirely sure what that means but I think you mean building with, for instance, Java vs. using Microsoft's Visual Studio products).
            robradina@...
          • while not without some truth

            The platform plays a big part in it.

            The best Java and .NET guys I know desperately avoid allocating new objects and using new memory, because those platforms' garbage collectors just leave old objects hanging around, due to the fact that some of them are still theoretically referenced (basically every time a resource doesn't hear its finalizer.)

            Memory management was supposed to be easier on these platforms, and it is. But that often means, if you're not careful, the app turns into a big pig, one that stirs up computer fans...
            Mac_PC_FenceSitter
          • No we weren't?

            before iOS, Applications weren't getting written at all.... the trend at the time was Google's desire, in that things were moving to the web.

            iOS restored the popularity of locally installed apps.
            Mac_PC_FenceSitter
          • Locally Installed Apps

            Where you see popularity, I see quagmire. The only reason we have locally installed apps is because it creates vendor lock-in. Apple could have created an alternative but they chose poorly.

            What we need is for iOS and Windows Phone to support Android apps before Google morphs it so that it's no longer possible to replace their services. That'll never happen. Apple has little to gain and Microsoft has little to lose. Regardless, both exhibit NIH arrogance.
            robradina@...
          • They didn't "choose poorly"

            if you remember, Steve Jobs lobbied the developer community to do HTML5, and wanted to avoid the whole "xcode for iOS" thing.

            Apple basically gave in, rather than enthusiastically embraced it (ironic, as they ended up making a fortune on the app store.)

            Developers wanted to do binary local apps. Users want to use binary local apps.... problem is what, then?
            Mac_PC_FenceSitter
          • As to IOS running Android apps

            never happen, not in a million years, and why would it? iOS' ability to run true native binary apps, written in C, is light years ahead of Java based Dalvik. Given that there's Apportable to take Obj C over to Android, if anything, things have gone the other way (in that Apportable has figured out how to get iOS apps running on Android.)
            Mac_PC_FenceSitter
          • Why Did Steve Want HTML5?

            Answer: He feared those platforms with larger market share would get the apps and his platform would suffer. That's every minority platform's challenge. They need standards. They need cross-platform because it lets their platform play the game. Once they have market share then the tune changes to protecting it. There's nothing wrong with any of this but Steve wasn't altruistic.

            Neither is Google but they love to play the seemingly altruistic role of the disrupting status quo whether it's FTTH, operating systems, laptops or phones -- as long as it doesn't affect their advertising revenue which so far has remained mostly unchallenged.
            robradina@...
          • No, Web is *not* WORA

            Java is the real write once, run anywhere solution. The Web is more like "write once, get called anywhere while processing is done on the server". It works as long as you have a fast, unmetered data connection which isn't really true for most mobile users. And JavaScript, the only thing that does run "local" is worse than java and Flash combined; a couple of sites will both make my phone run hot and drain my battery!

            Nope, native binary app development is a GOOD thing. You can have access to any server as a backend, but do most stuff locally without overheating the smartphone with stupid, inefficient JavaScript garbage.
            danixdefcon5
          • Java isn't true WORA, the web is a lot closer to that

            Java is only WORA once you install the enormous runtime that essentially installs a Java OS on your OS.

            In the meantime, the web, with equalizing frameworks like jQuery and Angular, has become a true WORA platform... where any of the main JS hosts can execute code as it is anticipated to work.

            With HTML5, most of what you might want to do locally can be done... the new localStorage object can buffer large amounts of data (up to 5 MB) and application caching. This is how Google was able to do the Chromebook.

            Now, don't get me wrong, most websites run the client server paradigm, but that's because what customers and vendors want, not because of limitations, and is largely the way Java itself is principally used (with a couple of big exceptions like Eclipse.)

            This is why the web will win over Java, as the WORA platform of choice.... indeed, has already begun to win with solutions like PhoneGap. Because the web can do it without installing a new OS on your OS.
            Mac_PC_FenceSitter
          • @Mac_PC_FenceSitter

            you are totally right. The first apps were HTML5 instead of Objective-C/X-Code.
            Ram U
          • OMG. You lose.

            You just made the classical mistake of putting your own personal interests and tastes before reality.

            I can assure you, countless millions still want EVERYTHING locally installed. An unbelievable number.

            And here is why its so horribly sad that that clear point has apparently passed you by.

            People have been posting non stop for probably more than two years now why there are so many unacceptable problems with the cloud its REDICULOUS.

            Plainly, obviously, well publicized REDICULOUS.

            Just go ask a couple celebs how they feel about the cloud after all those recent photos were hacked.

            Wake up robradina.

            Its like you cant see an inch past what you like.
            Cayble
          • Wow...

            That really convinced me to change my mind. Bravo.
            robradina@...
          • apps

            iOS did apps because Apple needed money, and Jobs saw the apps as a cash cow. The iPod Touch and later the original iPhone were (and could still be considered to be) a platform for email, browsing and music, plus a lot of marketing. Apps are great billboards.
            joe73072
          • Write Once Run Anywhere

            This concept was the design goal of Java. Sun was making progress until Microsoft polluted the Java standard. Now "write once run anywhere" really means "write once and run on any Microsoft operating system", which I should not have to point is not really "anywhere".
            YaBaby