The Late and Not-so-great Windows Phone Loses Another Major Client

August 30th, 2017

You may not believe this, but IDC long ago predicted that Windows Phone would take over the number two spot in the smartphone market. I caught one of those predictions in a story dating back to June of 2011. At the time, iOS had an 18.2% share of the market, and Android had 38.9%.

Windows Phone? Well, IDC predicted its share would increase from 3.8% to 20.3% by 2015, thus replacing iOS in the runner-up spot. Apple’s share would decline to 16.9%.

Surprisingly, IDC was pretty close to the mark with iOS. Its share depends on the time of year, but has, in the last two holiday quarters, been estimated at over 17%. That’s close enough.

But IDC failed to grasp Android’s growth at the expense of everyone else. So in the past two holiday quarters, Google’s Android platform has maintained market shares in the mid-80s. This is according to stats from Statistica. I’ll grant that other numbers vary a little here and there, but the basics are similar.

Windows Phone?

Microsoft’s share shrank to 0.3% in the holiday quarter of 2016, and is now less than a rounding error. I do hope IDC feels embarrassed at how it misread the smartphone market so badly, particularly Microsoft’s ability to go somewhere from what was, even then, a pretty low market share. Perhaps the study was done through rose colored glasses, assuming Microsoft’s previous successes meant such successes must continue in the mobile space.

To add insult to injury, there’s a published report of a recent high-profile Windows Phone defection. So two years ago, the NYPD purchased 36,000 Nokia smartphones running Windows Phone for the nation’s largest police force. Two years later, all of these devices will be “decommissioned,” taken out of service. iPhones will replace them.

According to a published report, the decision to go with Microsoft was made by a single person rather than a committee studying such a deal.

Notice nothing was said about considering Android instead.

Now it’s not as if Microsoft fought hard to keep the market. The NYPD purchased the Lumia 830, and the Lumia 640. Both were abandoned by Microsoft on July 11.

I suppose it’s possible that the person who made this unfortunate decision, Jessica Tisch, the department’s Deputy Commissioner for Information Technology, might just have had unrealistic expectations of Microsoft and its smartphone platform. But the Windows Phone market share at the time was a mere 2.3%. It couldn’t have been that flawed estimate from IDC, because it specified 2015 as the year that Windows Phone would beat iOS, and that ship had already sailed.

Now I’m not about to suggest that there was anything unsavory in the NYPD’s decision to go Microsoft. Maybe the Nokia people with whom the IT person communicated gave them a misleading — or overly optimistic — picture of the platform’s potential. It may well be that these Lumia devices gave totally satisfactory performance during those two years, and the decision to change was strictly due to Microsoft’s decision to pull the plug. But Microsoft clearly didn’t care about NYPD or its needs, or isn’t paying attention anymore.

On one level, this is unfortunate. The smartphone market is a two-horse race, even though there are loads of makers of Android gear. But most Android handsets are more similar than different, and, except for the latest Galaxy devices from Samsung and a smattering of other models, most of the market is dominated by cheap gear. You might compare that to the PC market, where most of the machines sold are also cheap without much in the way of distinguishing features.

Nokia smartphones have by and large been well reviewed. But it’s clear Microsoft made a huge mistake buying the division. I thought they might have learned a thing or two from Google’s unfortunate decision to acquire Motorola Mobility.

The purchase of Nokia in 2014 cost Microsoft $7.2 billion. It was one of the final significant decisions from former CEO Steve Ballmer before he left the company and got into the sports business. Clearly his replacement, Satya Nadella, had other priorities, and eventually gave up on the division.

Besides, what’s $7.2 to Microsoft?

I could argue that Microsoft isn’t doing terribly well with Surface PCs and tablets either, but since tech pundits are overlooking the tepid sales and imagining they are major factors in the industry, I suppose there’s hope.

Well, except for the public’s reaction. Imagine if the iPhone, early in its existence, suffered from flat or declining sales quarter after quarter. Do you think it would have ever carried Apple to the market position it occupies today?

In any case, there’s little point attacking Microsoft for its failed mobile strategy. Today’s Microsoft does better with cloud services and Office 365. Windows license sales are decent. People are still buying Xbox gaming consoles.

Microsoft has some different ideas with the Surface, but that was true with Windows Phone, yet customers went elsewhere.

But it’s a curious world. The critics expect Microsoft to succeed and Apple to fail. It’s all about backwards logic.

| Print This Article Print This Article

One Response to “The Late and Not-so-great Windows Phone Loses Another Major Client”

  1. dfs says:

    I won’t go into detail (it would be waaay off-subject), but it’s worthy noting that Balmer’s judgment as the owner of a NBA franchise isn’t much better than when he was heading up Microsoft. Above all, when he’s made a major mistake he’s incapable of acknowledging it.

Leave Your Comment