With No Flagship Phones Until Windows 10, Microsoft Again Hits at the Middle of the Market

Posted on March 2, 2015 by Paul Thurrott in Mobile with 0 Comments

While electronics giants like Samsung and HTC attacked this week’s Mobile World Congress with exciting new flagship designs that push at the boundaries of what’s possible with a modern smart phone, Microsoft took a different tack. The firm announced two more mid-market smart phones and has reaffirmed that we won’t see another Lumia flagship until Windows 10 ships.

This could be a problem.

There is precious little evidence that Microsoft’s mobile strategy of the past year—push volume by removing the cost of Windows Phone licenses to device maker partners and spanning the market with an ever-growing family of low-end and midmarket handsets—has helped the platform. Yes, Microsoft sold more Lumias in the fourth quarter of 2014 than it (or Nokia) ever had before, but only by a sliver. And Windows Phone sales overall were up just a tiny percent in 2014 at 34.9 million units, compared to 33.5 million units the previous year.

Worse, Windows Phone market share actually fell in 2014, from 4.2 percent in 2013 to just 2.7 percent. So much for volume over quality.

And this comes with Windows Phone’s biggest fans wringing their hands for months over the absence of a true Lumia flagship. Indeed, the last Lumia flagship—the Lumia 930—was announced on April 2, 2014, exactly 11 months ago. And if Microsoft stays true to its schedule, we won’t see another Lumia flagship until well after a year when that device first shipped to customers.

A year in the mobile industry is like dog years in real time. It’s the difference between the iPhone 5S (eh) and the iPhone 6 and 6 Plus (ooh!), or the difference between the lackluster Samsung Galaxy S5 and the impressive Samsung Galaxy S 6 Edge. But for Microsoft, this past year has been marked only by retreat in the mobile market, and by that growing family of sometimes embarrassingly low-end phones.

Sponsored

The Lumia 640 and Lumia 640 XL—nearly identical mid-market handsets with the latter sporting a larger, phablet-sized screen—that Microsoft just announced will do nothing to assuage the complaints of Windows Phone enthusiasts pining for a true flagship. They’re capable-enough devices with middle of the road processors, RAM and cameras. And they will be sold in the US, at least, and on multiple carriers, something that Microsoft had previously had trouble accomplishing. But they don’t include any truly earth-shattering features (unless you consider yet another free year of Office 365 Personal to be earth-shattering, that is).

For now, Microsoft’s message boils down to, wait for Windows 10. But this is problematic as well, as Windows 10 is still months away, and as the calendar ticks by, Windows Phone only loses more and more market share.

At Mobile World Congress, Microsoft is billing Windows 10’s universal app platform—which will help developers target embedded (IoT) devices, phones/phablets, tablets, 2-in-1s/PCs of all kinds, Xbox One and even esoteric devices like the Surface Hub and HoloLens—as the answer, a way for new apps to achieve distribution scale very quickly. When you consider the billion-ish users of mobile platforms like Android and iOS, this kind of scale is important.

Sure, there are about 1.5 billion people using PC versions of Windows, but there’s no app growth there at all. By creating a single platform that works across so many hardware types, Microsoft has its best chance of creating what we might call a third mobile ecosystem. (With apologies to Nokia, which previously tried this tack unsuccessfully with Windows Phone.)

Sponsored

Of course, Microsoft’s universal app platform isn’t a pure mobile platform like Android or iOS. It’s what Microsoft calls a “mobile experiences platform,” one that lets “customers take full advantage of all of the screens in their life.” It is thus an evolution of Microsoft’s “three screens and the cloud” vision from a few years ago.

The universal apps platform may also be a last ditch effort to get developers interested in Windows again. Whether this strategy works remains to be seen, and we will learn more at Microsoft’s developer-focused Build conference in late April. But as with Windows Phone, the passage of time isn’t helping. And with other mobile platforms surging ahead, the notion of a third platform becomes more fanciful, no matter how well executed it is.

Sponsored

Tagged with , , ,