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Could a cheaper Windows Phone change the mobile game for Microsoft?
During his July 12 keynote speech at Microsoft’s Worldwide Partner Conference, in Los Angeles, Windows Phone Division president Andy Lees suggested that advances in technology would put the price of a smartphone capable of running Windows Phone software somewhere between $100 and $150.
“We’re at an inflection point in Moore’s Law where you can put everything needed to run a computer on a single chip,” he said. “We can take the advantages we provide the PC and immediately provide them across devices.”
Microsoft has already begun leveraging the rest of its technology stack to build out the capabilities of Windows Phone. The version of Internet Explorer 9 running on Microsoft’s smartphones, for example, has the same software underpinnings as the browser that runs on PCs. With devices across the spectrum capable of swapping key pieces of technology, Lees added, “there won’t be an ecosystem for PCs and an ecosystem for phones, then one for tablets; they’ll all come together.”
Windows Phone needs all the help it can get, at least in terms of establishing itself in the ultra-competitive smartphone arena. For the three-month period between the end of February and the end of May, research firm comScore estimated that Microsoft’s U.S. share dipped from 7.7 percent to 5.8 percent. During the same period, adoption of Google’s Android platform rose from 33 percent to 38.1 percent, while Apple enjoyed a slight uptick, from 25.2 percent to 26.6 percent. Research In Motion continued its market slide, declining from 28.9 percent to 24.7 percent.
During his July 11 keynote speech at the WPC, CEO Steve Ballmer conceded that Windows Phone’s market presence is “very small.” Nonetheless, he went on to insist that other metrics bode well for the smartphone platform.
“Nine out of 10 people who bought Windows Phone would absolutely recommend it to a friend,” he said, reiterating a talking point voiced by many a Microsoft executive over the past few months. “People in the phone business believe in us.”
He also referred to Microsoft’s deal with Nokia, which will see Windows Phone ported onto the latter’s devices. “Nokia could have bet on themselves, bet on Android or bet on Windows Phone,” he said, suggesting that the Finnish manufacturer went with Microsoft after “they saw our roadmaps and saw what we did.”
Upcoming Windows Phones Unveiled
During the WPC, Microsoft also unveiled upcoming Windows Phones from the likes of Acer, Fujitsu, ZTE and Samsung-all of which embrace a thin-and-light design style, and all of which will presumably run the wide-ranging “Mango” update due in the fall.
Is Microsoft following a variation of the Android strategy, with plans to flood the market with cheaper smartphones all running the same operating system? Certainly that worked for Google’s operating system, which has seen rapid adoption over the past several quarters. And Microsoft can make the value-added argument that, with its tight control over its smartphones’ hardware and software stack, Windows Phone will lack the incipient fragmentation of Android.
But will that argument be enough to reverse what outside analysts see as Windows Phone’s steady market-share decline? That’s the tougher question. Right now, Microsoft is betting that the “Mango” update will reinvigorate its prospects by sporting such new features as a redesigned Xbox Live Hub; home-screen tiles capable of displaying up-to-the-minute information; the ability to consolidate friends and colleagues into groups; and visual voicemail-more than 500 new elements in all, if you believe the company.
A plan to flood the market with cheaper, feature-rich smartphones will only work, though, if Microsoft has the carriers and its hardware partners fully onboard-companies that already make lots of money off bestselling, market-proven Android and Apple devices. Nokia seems fully invested in pushing Windows Phone as a platform, but its presence in the all-important United States market is negligible; to make matters worse, the manufacturer is bleeding market-share during its transition period from Symbian’s to Microsoft’s platform, offering an additional challenge to the two companies’ partnership.
Such are the issues facing Microsoft over the next year and beyond. Throughout the WPC, Microsoft executives repeatedly cited research notes from IDC and Gartner suggesting that Windows Phone will surpass the market-share of both RIM and Apple by 2015, trailing only Android. But in order to do so, Microsoft will wrestle with a number of factors beyond merely lowering the price of its smartphones.
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