Microsoft's Windows Phone could make a significant play to the smartphone midmarket in order to blunt progress there by Google Android and Apple iOS.
Can a lower-cost Windows Phone carve off a significant
portion of the smartphone market?
After months of positioning its smartphone platform as the
counterpoint to high-end competitors such as Apple's iPhone and some Google
Android devices, Microsoft plans on aiming Windows Phone at a less-pricey
"We are dramatically broadening the set of price points in
Mango-related phones that we can reach," Andy Lees, president of Microsoft's
Windows Phone division, told
during the Asia D conference Oct. 19. "That's particularly
important because going lower down in price point opens up more addressable
For months, rumors have circulated about a stripped-down
Windows Phone OS code-named "Tango," aimed at lower-cost hardware and developing
markets such as India and China. At the moment, though, Microsoft seems more
focused on rolling out its wide-ranging "Mango" update, which includes some 500
tweaks and new features. The update will appear on a range of new devices from
the likes of Nokia, Samsung, and other manufacturers.
Android already occupies a healthy portion of the smartphone
midmarket, and Apple-despite its reputation as a purveyor of costlier mobile
devices-is making moves in that segment of its own, selling the 8GB version of
the iPhone 4 for $99 and giving away the 8GB iPhone 3GS for free with contract.
That could elevate Windows Phone's push into the midmarket a matter of
necessity. The bigger question is whether such a push will help the smartphone
platform gain traction against Android and iOS, which so far have dominated the
Nokia could play a sizable role in Microsoft's midmarket
hopes. The Finnish phone maker not only
holds a reputation as a manufacturer for hardware in that segment, but-after
abandoning its homegrown mobile operating systems in favor of Windows Phone-it
needs to make a substantial push in that direction in order to reverse its
current market share declines. (Nokia's most
recent earnings report detailed net sales of $12.3 billion for the third
quarter of 2011, a year-over-year decline of 13 percent, with operating losses
of $98.4 million.) A push buttressed by Windows Phone.
"During the third quarter, we continued to take the action
necessary to drive the structural changes required for Nokia's long-term
success," Nokia CEO Stephen Elop wrote in an Oct. 20 statement accompanying the
earnings results. "Additionally, I am encouraged by our progress around the
first Nokia experience with Windows Phone."
Other Nokia executives have been much blunter about the
company's fortunes riding on Windows Phone. "The reality is if we are not
successful with Windows Phone, it doesn't matter what we do," Chris Weber,
president of Nokia, told AllThingsD
in an August interview.
In addition, Microsoft is almost certainly encouraging other
manufacturing partners to think more about the midmarket. Considering the moves
by Google and Apple, it doesn't really have a choice.
Nicholas Kolakowski on Twitter