Microsoft on mobile: Phoning it in
If this long-term strategy is to succeed, Microsoft must improve its presence in the mobile phone market, via Windows Phone 8 and its attendant devices.
Microsoft's hurdles in mobile go beyond competition from Google (and its hardware partners), Apple, and even BlackBerry. They also include the stigma of having failed to capture any major mind share with any previous attempt at mobile. Most of Microsoft's success in the mobile realm has come from providing the back ends -- Exchange Server, for instance -- accessed by devices that have run anything but a Microsoft OS. Few and far between are the corporations that view Microsoft as a major force in mobile, Forrester's Rymer and Hammond contend.
Some of that is certainly the bad taste left by Microsoft's previous forays into mobile. Windows Phone 7 debuted to poor reviews and minimal sales in 2010, and those who committed to it were given short shrift by Microsoft's delaying upgrades for the platform until 2013. Worse, Microsoft has more to lose now than ever, with other mobile players capitalizing on the rising BYOD trend. (When IDC surveyed information workers for a 2011 Unisys-sponsored survey about the mobile devices they brought into the workplace as part of their company's BYOD practices, Windows Phone wasn't even on the list.)
The company's hardware strategy for Windows Phone 8 has fallen somewhere between the exclusivity of Apple and the broad inclusivity of Android: Microsoft picked an exclusive list of vendors willing to follow exacting specifications for Windows 8, then worked closely with them.
The result? A rocky road for everyone involved. Nokia is seen as a troubled company that still plans to cut 10,000 jobs by the end of 2013, and HTC, though ranked as the fourth-largest smartphone vendor globally, has yet to achieve major name recognition. Samsung only just now released its Windows Phone 8-powered Ativ S and is far more aggressive in promoting its existing and future Android phones with memorable (if not always practical) form factors, such as the Galaxy Note.
Worse, sometimes Microsoft's hardware specs work against the partnership. According to a report by Bloomberg.com, HTC had to dump plans for a large-screen Windows Phone 8 device due to the OS's current technical limitations on displays larger than 5 inches diagonally.
What's more, Windows Phone 8 can implement only a very small subset of the WinRT API. Not a major shock to seasoned application developers, but it's a sign of the gap between Microsoft's intentions for "one platform to rule them all" and the actual practice. Complaints about the complexity of the development kit, which requires a SLAT-capable processor to run the phone emulator, complicate the issue further.
These obstacles are at least as rocky as the ones Android surmounted to become a major smartphone player. But the motives are different. Google pushed Android to market to drive traffic and customers toward its ad business; if it failed, it wouldn't have hurt the company's core competence. Windows Phone 8 and Windows 8 are strongly complementary; if one fails, Microsoft's larger cross-platform, WinRT-centric strategy will be damaged.
Chris Sells, vice president of the tools division at Telerik (and himself a Microsoft veteran, as a principal program manager for the developer division working on Visual Studio), thinks the volatility of the mobile market -- the very thing that put such a dent in Microsoft's sway in the consumer market -- can work in Microsoft's favor here.
"The key to remember is that consumers switch platforms fast," says Sells. "So long as they can bring their email, contacts, appointments, pictures, and music between platforms, there's no reason in the world for them to be loyal when the next cool thing comes out."
Forrester's Rymer and Hammond agree: "Only some consumers are strongly loyal to smartphone brands, and tablets may follow the same pattern. If Microsoft and its partners can create amazing new offerings at attractive prices, enough consumers may switch back."
Blue Badge Insights' Brust feels that Windows 8 and Windows Phone 8 can and should prop each other up -- "get a virtuous cycle going," as he puts it. But Microsoft needs more apps in both stores to get there, Brust says -- possible only when a developer culture sees Windows 8, and Windows Phone 8, as worthwhile targets to begin with.