Matthew Miller
Yes, huge growth ahead
Short term, probably not
Lawrence Dignan
The moderator has delivered a final verdict.
Matthew Miller: It has now been just over a year since Windows Phone 7 was launched and we still see Microsoft's smartphone market share down in the 2% range. Nokia took a major risk earlier this year when they announced that their future smartphones would run Windows Phone. Given the overwhelmingly positive reviews from nearly all those covering the mobile space and the reported success of Nokia Lumia 800 sales outside the U.S., I think Windows Phone 7 will see huge growth in 2012 and Nokia is going to help them get into the 3rd place position behind Android and iOS.
WP 7 is a refreshing, fast, and stable smartphone operating system and whenever I show it to people they are impressed. Unfortunately, Microsoft doesn't seem to be able to generate much excitement after a year in the market. Back in the day, it seemed everyone had a Nokia phone and the company is going to have to make major efforts to get back to that level of recognition and with Windows Phone Microsoft is going to help them do that.
Lawrence Dignan: The question at hand is probably one of the largest ones in technology for 2012. Can Nokia and its band of Windows Phone devices become legit players in the U.S? Long term answer is perhaps. Short-term answer is probably not. When it comes to Windows Phone and Nokia, I hear a common refrain: "The devices look cool, the OS is nice, but..." That "but" typically means someone is buying an Android or iPhone.
Nokia's biggest problem is that it abandoned the U.S. years ago. It used to be a player. Then focused on the rest of the world. Maybe Nokia got cocky. Maybe Nokia just misfired. In either case, today it's going to be really tough for Nokia to get shelf space. The T-Mobile deal is a start, but little more.
The equation for Windows Phone may be different. I could see Windows Phone doing OK without Nokia. HTC, Samsung and others will roll with Microsoft. Nokia needs to break into the U.S. and differentiate.
Matt and Larry will post their closing arguments tomorrow and I will declare a winner on Thursday. Between now and then, don't forget to cast your vote and jump into the discussion below to post your thoughts on this topic.
Microsoft generally still has a respectable reputation in the enterprise. However, both the iPhone and Android arguably play better with enterprise than WP7 (with the exception of the obvious SharePoint and Microsoft Office integration). Has Microsoft made a critical mistake by making WP7 so consumer oriented or is the company wisely betting on the consumerization of IT?
I disagree that Android plays better with the enterprise than WP7, based on my experiences. The Exchange experience on Android is all over the place, while it is solid on Windows Phone 7. Everyone in my company brings their own phone to the office so I think targeting the consumer, while still giving strong options and support for the enterprise was the right move.
I am for Yes, huge growth ahead
CIOs I talk to are gravitating to iOS because it's easier to manage. Android has a bunch of flavors. Windows Phone would seem like an obvious bet for the enterprise, but Microsoft went consumer first. Consumerization is real and I think I'd probably follow the same strategy. Where Microsoft might be screwing up is that it isn't giving the enterprise enough goodies to work with on the Windows Phone platform. In the end, Microsoft probably realized that companies aren't really handing out smartphones anymore---ask RIM---so the consumerization bet makes sense. The problem here is that Microsoft has to win over consumers. Microsoft's success rate on that front is mixed. Xbox is a hit. The Zune was a punchline. And just for the record. I have no idea how Matthew has 78 percent of the vote when he more often than not agrees with me. Where's the growth optimism people? Crickets? Are those crickets I hear?
I am for Short term, probably not
We've all talked about how the Windows brand is probably one of the big things that has hurt Windows Phone 7 with buyers, since the product is fairly solid. If Microsoft had named the product "Xphone" (echoing the Xbox), for example, how different would the situation be right now?
Hmm, I honestly think that something like the Xphone may have actually gotten more people to look at it than labeling it Windows Phone Series 7 (the original name). I understand that extensive research was conducted by Microsoft and that the Microsoft name and Windows brand resonates with people, but I think their research was likely not looking enough at the phone market. Something hip, cool, and different would have been a better choice.
I am for Yes, huge growth ahead
I think Microsoft overlooked the branding scenarios with the mobile OS rewrite. The default position from Microsoft is to slap Windows in front of everything. But guess what? I don't want Windows on my game machine. Microsoft figured that out and used Xbox. I think the smartphone play is similar. Microsoft has services and interesting features, but the Windows brand is a handicap. All the cool kids have something else and I don't think Windows screams cool anymore. Granted we should overlook mere names, but I think it matters here. If Google launched Windows Phone as Android a lot of folks would be gushing. There's a hip factor that's overlooked.
I am for Short term, probably not
Can Microsoft help Nokia overcome its hurdle with U.S. carriers? Both of them are in a weak position with Verizon. How badly will that hamstring the potential of Windows Phone 7 in the U.S.?
I think carriers are a bit hesitant to fully embrace Microsoft because Windows Mobile was frustrating in many respects and could not compete well with the iPhone or Android devices. I am not sure the Microsoft name carries that much influence with carriers and as Larry pointed out Nokia seemed to have shunned the US the last several years. Nokia now has more international leadership and may be willing to work harder in the U.S, but that remains to be seen. T-Mobile has always carried Nokia products and rumors indicate it is again going to be the first one to actively support Nokia's smartphones. Verizon was the last to launch a Windows Phone device. They have yet to reveal any WP 7.5 Mango device and there isn't even so much as a rumor out there for one to come soon. They may be requiring that Microsoft release one with LTE and that likely won't happen until later in 2012. I think this hesitance to carry WP 7 by Verizon will greatly impact the sales potential.
I am for Yes, huge growth ahead
Microsoft can pay carriers ridiculous dollars to drive Nokia and Windows Phone adoption. Money talks and carriers want a No. 3 platform. Microsoft and Nokia need Verizon and they need LTE support. In fact, if they had LTE support today I'd be interested. But they lag. Microsoft has an opportunity to get to LTE before Apple does. If it doesn't get there it's game over.
I am for Short term, probably not
Nokia has been weak with U.S. carriers in the smartphone business. Why is that when it has been so strong with international carriers in Europe and Asia?
I asked this question of Nokia in the past, but was never given a clear answer. I think that U.S. carriers want to install their services and income generating utilities while Nokia has preferred to use their own services and sell devices that are in original condition, much like Apple and the iPhone. Nokia has now gotten out of the services business, except for Nokia Maps and is likely more open to working with carriers on Windows Phone. Also, outside the U.S. GSM is the standard and Nokia doesn't have to make special CDMA versions of their devices that have to also go through specific carrier testing and approval processes.
I am for Yes, huge growth ahead
My working theory is that Nokia got cocky in the glory days and figured it didn't need the U.S. Back then, Asia and Europe led the mobile market. Then the iPhone landed. Then Android landed. Suddenly the U.S. rocked and Nokia was a no-show. As noted in a few of the talkbacks there is still goodwill for Nokia, but the device maker is really starting from scratch.
I am for Short term, probably not
Nokia's first WP7 devices have hit the market -- with the Lumia 800 being the new flagship device -- what do they tell us about what the two companies can do together?
The Lumia 800 is probably one of the best made Nokia devices I have ever used with a unique design not seen in other Windows Phone devices. I also think it is pretty incredible that they were able to roll out hardware into consumers' hands in just over 8 months from the announcement. Yes, the Lumia 800 is missing a front facing camera, but once you hold it in your hand you forget about that and who makes video calls anyway?
I am for Yes, huge growth ahead
These devices were rushed. I mean no front facing camera! Really?!? The biggest thing Nokia and Microsoft showed is that they can move relatively fast. Overall, I didn't learn much from this launch except for that Nokia can get it in gear a bit. I want to see a slew of more devices and those innovative features on the fly. Today, Nokia's hardware is so-so at best and seem generic to me.
I am for Short term, probably not
I've written that Microsoft's biggest opportunity in mobile is PC-mobile convergence (like Motorola has done with its Webtop software) because it is about consolidating devices and saving money and businesses love that. Do you see Microsoft having the courage to take a leadership role in that space, even if it means cannibalizing some of its Windows sales in the short term?
The Windows business is huge for Microsoft so I don't think focusing on the PC-mobile convergence would cannibalize too badly. Then again, I don't see a vision or direction from Microsoft that the smartphone is intended to serve in this capacity. It looks like Windows 8 tablets will fit in nicely between a Windows Phone and Windows computer so I don't see a real need for anything more from the phones.
I am for Yes, huge growth ahead
I agree with you, but you'd need Windows Phone and Windows 8 to merge. I think the idea works out and I don't think Microsoft necessarily cares what gets cannibalized as long as you have Windows in your pocket or laptop bag. Given Microsoft's slow tablet march---molasses running uphill in the winter---that mobile/PC merger may be the only move it has. The larger question is whether there's a single platform play anymore. I'd argue that the stack is more scattered now.
I am for Short term, probably not
I think carriers and hardware manufacturers would get a lot more excited about Windows Phone 7 if they thought it would sell. Is the problem that Microsoft hasn't sold the ecosystem on the idea of WP7? Could this force Microsoft to have to do its own hardware eventually, like Xbox and Zune?
Good points Larry. It wasn't until my 15-year old daughter tried a Samsung Focus that she "saw the light" and embraced Windows Phone. Microsoft showed it can succeed with other products with the Xbox and rebranding WP to something else may have been just the ticket. Then again, the Zune HD was a fantastic product and look where that ended up. It seems to me that the closed ecosystem would please carriers since it should reduce customer service problems with devices. Manufacturers like HTC may not be fully embracing WP since they can't differentiate as much as they do with Android. It seems to me that Microsoft's requirements are holding manufacturers back, thinking about LTE, NFC, etc. I don't think Microsoft will do the hardware themselves, but then again if they are in it for the long haul they may be forced to.
I am for Yes, huge growth ahead
Microsoft really needs a swath of buyers to go into Windows Phone. Then the word-of-mouth can feed on itself. Right now Windows Phone is like an 8th grade dance. Microsoft is on one side and smartphone buyers are on the other and no one is hooking up. What's odd about this is that all the carriers want a No. 3 platform, but obviously they don't think WP is the one. Microsoft could do its own hardware, but the issue is carrier certification. It's a painful process and I doubt Microsoft would want to go that make-your-own-hardware route. The best option for now is to see if Samsung, HTC and Nokia can popularize the OS.
I am for Short term, probably not
You guys have both mentioned that there are a lot of things to like about the OS. If Microsoft got it (mostly) right from a product perspective, then why isn't Windows Phone 7 selling?
I think a lot of why WP isn't selling has to do with carrier and manufacturer support. HTC essentially launched their previous model devices with a new OS and only came to two carriers at launch. Samsung also brought their same Galaxy form to Windows Phone so there was nothing amazing about the hardware. Verizon also was very late to the party and as the largest carrier in the U.S. I believe this had an impact on adoption. There is still only a single WP device on Sprint and Verizon, while T-Mobile has a small selection too. AT&T is the only carrier with new rather exciting devices, but even those have specs lagging 6 months behind what we see with Android. It seems like carriers and manufacturers are taking a ho-hum approach to WP7 and not fully getting behind the efforts.
I am for Yes, huge growth ahead
Buying a mobile phone in the U.S. usually means it's a two year commitment. With iOS and Android you expect the platform to grow and apps to be widely available. Windows Phone has to clear that hurdle. The other big issue to me is brand. I think Microsoft and I think PCs. Microsoft would have been better off launching a new brand like Xbox and using that for the mobile phone. Play up the mobile brand and play down the Microsoft Windows connection. I'm not sure folks want Windows on the phone. If you called Windows Phone something like say Android it may sell. There's a lot loaded into that name. Microsoft Windows doesn't scream mobility to me. For the younger consumers, I'm not sure Microsoft has the brand clout that Google and Apple have.
I am for Short term, probably not
Gartner has predicted that Nokia will push Windows Phone 7 to 20% marketshare of the smartphone market by 2015. Is that overly optimistic in light of the fact that WP7 has struggled to win customers in 2011?
I laughed when I saw that Larry predicted greater growth in 2012 than I did since I am arguing for huge growth. Given the track record from 2011 I think it will take time to grow, but both companies seem to be in it for the long haul. We saw iOS go form 0 to 15% in a couple years, so it is possible. I think that 20% is a fair prediction for 2015. Nokia is a very popular brand outside the US and looking at the success of the Lumia 800 so far I think Nokia will help consumers experience WP on a larger scale. So far, we have seen launch devices that were generally hardware from the Android platform with a new OS and thus were not very exciting for the consumer. We also did not see much push from carriers in the U.S., other than AT&T.
I am for Yes, huge growth ahead
Gartner is smoking crack. So is IDC. First I have no idea how you can predict the mobile industry three years from now. The only thing I can guarantee is that Microsoft will be in the mobile market. Microsoft doesn't quit and will push a boulder up a hill forever. It remains to be seen if Windows Phone is another quagmire like search. I'm just not seeing a lot of Windows Phone in the field. That's a shame since I like the OS. The line between overly optimistic and delusion is thin.
I am for Short term, probably not
The smartphone market is increasingly looking like it has already consolidated around two platforms -- Android and iOS -- what's a reasonable expectation for WP7 marketshare by the end of 2012?
I am surprised that we are still at just about 2% for Windows Phone after a year and have a tough time figuring out why it isn't doing better. I honestly think people need to try devices to appreciate them and just about every review states that Windows Phone is fantastic so this feedback doesn't match very well with sales numbers. I'm not sure if the hesitancy to try Windows Phone is due to past phone experiences, the Microsoft Windows name and branding, or the advertising and promotion of iOS and Android products by carriers. I think a reasonable expectation by the end of 2012 is 5% to 8%.
I am for Yes, huge growth ahead
10 percent and I think that's a global reach goal to be honest. More likely is something like 7 percent to 5 percent. In the U.S. Nokia will be a bit player at best. Nokia lacks LTE in the U.S., lacks presence and there's no cool factor with the hardware maker or Microsoft. To Nokia, the U.S. is an emerging market that holds the market share gains or losses. To argue for larger share gains would require a lot more of that Redmond Kool-Aid.
I am for Short term, probably not
What advantages does the Microsoft-Nokia partnership have over Samsung and HTC, which both make Android and WP7 devices?
Nokia and Microsoft have a larger partnership with Bing and Nokia Maps (outside of the mobile space) so they are able to leverage this onto Windows Phone with an exclusive offline GPS navigation experience. As good as that is, I don't think it will really stand out that much for the consumer. Nokia always led the others with quality cameras, but HTC and Samsung are definitely stepping up their camera game to take on Nokia
I am for Yes, huge growth ahead
The theory is that Microsoft and Nokia can come up with unique features and one-of-a-kind integration. Nokia can create a stronger product with integration and unique features. I haven't seen either yet relative to an HTC Windows Phone. That's a big problem. It's early, but this partnership needs exclusives in a hurry. Matthew said that Windows Phone gives Nokia influence. I'm also not seeing Bing and Maps as a reason for me to buy a phone.
I am for Short term, probably not
Nokia could have committed to doing both Windows Phone 7 and Android devices, would that have been the smarter move than going all in on WP7, or will the focus enable them to create a stronger product?
Nokia has been spread out on a number of different operating systems and editions of operating systems, such as Symbian^3, S60, Series 40, and Maemo/MeeGo so it is possible they could have made devices for two major smartphone operating systems. Then again, we see success coming to those who focus today. Windows Phone gives Nokia more control of the experience and in the past they kept fairly tight control of Symbian devices so the "open" nature of Android didn't really seem like a great fit for Nokia. Android is very successful today, but I think if Nokia would have went with them they would just end up being another manufacturer with no real Nokia influence.
I am for Yes, huge growth ahead
At the time, Nokia couldn't have developed both phone platforms. The company was a mess and needed to focus. The all-in on Windows Phone is going to be a great business case study. It will either work or fail miserably. There's little in between. I agree that Nokia would see margins hammered with Android devices, but at least it wouldn't have to evangelize use of Windows Phone. Just because you have a strong product doesn't mean people will buy it.
I am for Short term, probably not
Microsoft and Nokia have both bet their mobile strategy on this partnership. Since both have a ton of resources and so much at stake, does that all but guarantee that Windows Phone 7 will take a significant chunk of the smartphone market?
Back in the days when Palm was king of the PDA market, Microsoft poured money and resources into the Pocket PC and eventually knocked Palm out of that business. The mobile phone market is much different today with many more players who are committed to growing their market share and also spending lots of money to stay competitive. I don't think Microsoft has as much as stake as Nokia does since the Windows Phone business is just a small part of Microsoft and they could probably kill it off with little impact on the bottom line (they currently make more from Android license deals than from Windows Phone sales). Nokia put all their eggs in the Windows Phone basket and needs it to succeed. They needed to do something to stay relevant and in my opinion this was likely the best alternative.
I am for Yes, huge growth ahead
Globally, Microsoft and Nokia may have a shot. In the U.S. I'm highly skeptical. First, carriers are pushing Android and Apple devices. Given those two categories are selling well it's very hard to get shelf space. Even RIM---once a go-to smartphone maker---is being pushed aside. In the U.S. Microsoft and Nokia are underdogs and I don't care how much marketing coin they bring to the party. One big issue for Nokia and Windows Phone is that there are few in the field. Some people want to be different, but no one wants to be on a stranded platform. There are hurdles---distribution and customers---to be cleared before there are market share gains.
I am for Short term, probably not
This is our mic check.
All good on my end.
I am for Yes, huge growth ahead
testing
I am for Short term, probably not
Matthew Miller
I was pretty surprised at the significant voting support for huge growth in the platform. I agree with Larry that growth likely won't happen immediately because people need to get these devices in their hands and some carriers (Verizon and Sprint) are not helping get them out there. I expected to see Microsoft pass 5% in 2011 and am a baffled by the slow adoption rate of such a good operating system. Then again, the hardware has lagged behind iOS and Android.
Nokia's Lumia 800 is one of the best pieces of mobile phone hardware ever made, with just the right screen size for pocketability, curves that make you want to always hold the device, and a display that has you staring for hours. The form factor is drop dead gorgeous and unique in the Windows Phone world. It's amazing that Nokia was able to get this out in just eight months and I look forward to seeing what they can do with more time and an advancing operating system.
Lawrence Dignan
Unlike Matthew, I'm decidedly less optimistic about Nokia's Windows Phone prospects in the U.S. First, carrier support at the moment is lacking. Carriers want a No. 3 platform, but don't seem to be convinced that Microsoft and Nokia can step up. In addition, Nokia is unproven in the U.S. market. And finally, Nokia and Microsoft lack a device that can work on a 4G Long-Term Evolution networks. Nokia and Microsoft need to get a LTE device to market before a 4G iPhone launches.
I'll give Nokia some props for getting a device out quickly, but the reality is that the device maker and Microsoft need to cook up a leapfrog innovation to compete. That’s a tall order considering most folks in the U.S. remain skeptical about this smartphone tandem.
Jason Hiner
This was a tough one to call. In one sense, Windows Phone 7 market share has nowhere to go but up and Nokia still has great sales distribution so that alone will naturally give the platform a nice shot in the arm in 2012. Although WP7 is a solid product, it's still saddled with the same problems that have caused it to do a belly flop in the market for the past year. People like smartphones and tablets because they aren't as complicated and cumbersome as PCs -- especially Windows PCs. People just don't seem to want to "go back to Windows" on a phone.
Posted by Jason Hiner