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How did Microsoft get the smartphone market so wrong?

It’s hard to imagine today, sitting her surveying a smartphone market dominated by Android and iOS, that not so many years ago, there was a third contender – Windows Mobile. Why is it not still around today?

Unlike Android and iOS, that are based on the look and feel of the original windows concept, designed by Xerox engineers back in the 1970s, Windows Mobile was quite different. Being revolutionary and first to market with a product is not something that Microsoft are noted for. They are usually followers, initially with an inferior product and use their massive marketing and development spend to get it right over a number of releases. So, why in this case when they had a strong product, did it fail.

New-look tile design

To understand this, you need to look back at the noughties when Microsoft got a large percentage of their revenue from directly selling software licenses. Their cash cow here was Office, which they wanted to protect at all costs. They noticed the big splash that the iPhone and iPad made and realised they could lose market share to it and so launched Windows Mobile as a cut down version of Windows, for Smartphones.

The new-look tiled design came from Metro the design concept they were using to develop Windows itself and came to the fore in the ill-fated Windows 8. Basically, users found it a bit too revolutionary with its touch screen support and Live Tiles. However, for smartphones it was perfect.

Deal with Nokia

Microsoft even signed a deal with Nokia for them to produce Windows Mobile phones and the Nokia Lumia range was launched. Despite this being a good range of phones (I fondly remember my banana yellow Lumia 820), it never took off.

Why? Because it was too late for a number of reasons. Firstly, the app developers had already developed their apps for Android and iOS and were loathe to do it again for such a ‘Johnny-come-lately’ as Windows Mobile. So, the platform never had the apps it need to attract users away form the other OS.

Secondly, Nokia itself, whilst although still a major phone manufacturer, were past their peak of the late nineties and early noughties and were then only really dominant in the lower-end feature phone market. As a result, the brand did not have the same prestige as Apple and Samsung fro smartphones.

All down to timing

Not willing to recognise this, Microsoft then doubled down their errors by buying the Nokia phone business for $7.2 Billion. All this did was to delay the inevitable, with Microsoft eventually selling the feature phone line and trademarks to HMD global and writing off the loss.

So, like a lot of bad decisions, it was all down to timing. As with millions of people worldwide already using Windows, you would have thought that Microsoft would have found it easy to leverage these users onto Windows Mobile and enable them to dominate the market.

When asked recently what his biggest regret during his time at Microsoft was, Bill Gates said “Whatever mismanagement I engaged in that caused Microsoft not to be what Android is.” That probably sums it up!



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