This is not your dad's Microsoft. In the last few months Microsoft has been refocusing on Web services and devices instead of its mobile operating systems, Windows RT and Windows Phone 8 (WP8). Neither OS have been cutting the mustard in the market. Moving forward, I see Microsoft addressing its mobile OS issues in two ways.
First, in the long run, 2014 and beyond, I see Microsoft replacing RT and WP8 with Windows 8.1. As Ed Bott said, with Windows 8.1, Microsoft is aiming squarely at mobile devices. How can Microsoft do this with ARM dominating tablets and smartphones? By eventually replacing its ARM-powered RT devices with Intel Silvermont/Bay Trail tablets running Windows 8.1.
It makes sense. This new Atom-based, long-battery life processor family can give Microsoft a low-end tablet that can run "real" Windows instead of crippleware RT or the unpopular WP8. This would also save developers time. They can just focus on Windows 8.1 without worrying about the underlying chip architecture. They would be working once more with the familiar x86 architecture.
Indeed, I think Microsoft may go even farther and replace WP8 with Windows 8.1 on smartphones. The Intel Silvermont/Merrifield chip family is designed for smartphones. Just as with Bay Trail, Microsoft could give its developers the familiar environment they already know. The tens of thousands of Microsoft developers who now focus on the desktop could far more easily write or port software to smartphones and tablets.
Can a new WinTel pairing win over ARM fans? Intel thinks so. Intel's Silvermont tablet and smartphone chips are expressively designed to support Android and Windows 8.1.
Some analysts also believe that Intel has a shot at disrupting ARM's hold on the mobile space. As Wells Fargo analyst David Wong recently said, "Intel’s strong technology position could give Intel’s tablet and smartphone products a competitive edge over ARM-based chips in 2014 and 2015, and beyond."
In the short run, it's a different story. The mobile world is an ARM world. Since Microsoft's own ARM-based mobile operating systems aren't doing well, Microsoft has shown that it isn't afraid to support its applications and services on Android and Apple's iOS.
Although Windows 8 has had its issues, it's a rip-roaring success compared to Microsoft's mobile OS adoption rates. Microsoft has also made it crystal clear that it's advancing the Windows 8 family with Windows 8.1. It's not giving RT and WP8 the same vote of confidence. There's lots of Windows 8.1 news coming out of Microsoft's Build 2013 developer conference, but little said about RT or WP8.
How unpopular is RT? By IDC's numbers in 2013's first quarter, Windows RT tablets stumbled out of the opening gate to 0.2 percent of the market. Windows 8 tablets, at 3.3 percent market share, were nothing to write home about either, but it was far better than RT.
True, WP8 has clawed its way up to the third place spot among smartphone operating systems with 3.2 percent of the market. But third place isn’t much to brag about when Android owns the smartphone market (with 75 percent) and Apple's iOS hangs on to 17.3 percent.
You might think WP8's growth is good news, but its rise seems to have far more to do with Windows and Symbian's fall than with its own organic growth.
Let's also not forget that Windows Phone 8 and RT are both feature incomplete for business use compared to their competition. WP8 still doesn't support virtual private networks (VPN) and RT will only get Microsoft's core e-mail program, Outlook, late this year... if it even gets Outlook then. It may now show up until October 2014. It also doesn't help that RT, which is all about Metro-apps, won't get the full Metro-Style Office until 2014.
What's more telling is that Windows developers seem to be abandoning the WP8 platform.
Sameer Singh, the head analyst of BitChemy Ventures, a technology incubator group, recently observed, "Since mid-2012, app addition on the Windows Phone platform seems to have flat-lined. This is in stark contrast with app addition on Android & iOS over the same timeframe, even though the developer population at the time was smaller." Singh continued, "The unmistakable conclusion … is that developers are losing interest in the Windows Phone platform."
But, you know what really told me that WP8 is in trouble? Microsoft's own developers aren't backing WP8. Microsoft just updated its Skype Voice-over-Internet Protocol (VoIP) program to support video mail with Skype video messaging. This feature is fully supported on Windows desktop, Windows 8, MacOS, iPhone, iPad, Android, and BlackBerry... but not on WP8.
Yes, you read that right. Even BlackBerry gets the full Skype video messaging, but Microsoft's own WP8 doesn't. Skype's “how to use video messaging” FAQ doesn't even mention WP8 or RT.
That’s just one example of Microsoft’s willingness to support other mobile platforms at the expense of its own. Microsoft is also finally offering the crown jewel of its applications, Microsoft Office, to iPhone users. The mobile version of Word, Excel, and PowerPoint are now available for iPhone users via its Office 365 Web services. It's only a matter of time before a full tablet-sized version is available for iPads.
Where would they draw the line? A paying market is a paying market, and if they don’t get customers from their own mobile customers, they’ll take the money from mobile platforms that do have a significant market share. I'm sure Microsoft will port its mobile Office apps to Android smartphones and tablets as well.
After all, Microsoft probably profits more from Android than it does from RT and WP8. Why not add on to their profits, and attempt to wean users away from the Google application ecosystem? It should prove a win-win for Microsoft.
Maybe WP8 will survive. At least it's getting some traction. But, frankly I doubt Windows RT will even be around in late 2014. Microsoft started dumping Surface RT tablets in early June and in mid-June they started an educational market fire-sale for the unpopular tablet.
Add up the numbers. The biggest mobile operating system markets are Android and iOS. Windows 8/8.1 at least has a presence on tablets, but RT? Why keep it on life-support if Microsoft can replace it with Windows 8.1 on Intel chips?
Mobile users are interested in Android and iOS. Microsoft's most loyal users and programmers are interested in Windows. Why not make them all happy by giving the first group the Microsoft applications they want and the second group not just one interface, Metro, across all platforms, but one operating system?
When I put it all together, I think Microsoft will return to its old ally, Intel, for its next generation of mobile devices while continuing to support its Web-based applications and services on any platform—not just its own.
In time, Microsoft's mobile operating systems, WP8 and RT, will be left to wither and die. They'll be replaced by Windows 8.1/Windows 9 as the next-generation x86 chip family becomes more tablet- and smartphone-friendly. Then, no matter who "wins" the mobile platform wars--Android, iOS or Windows; ARM or Intel--Microsoft will still find profits.