The company’s not leaving the casino, though: Windows Phone, the platform, isn’t going anywhere, even as Microsoft greatly scales back its hardware ambitions. The company has labored for years to create both a full-featured mobile operating system as well as an ecosystem of devices — PC, phone, tablet and more — that all use the same code base. It would be silly to just abandon its mobile platform, especially as people spend more and more of their time on smartphones.
In fact, if you’re not one of the 7,800 people losing their jobs, there’s actually a lot to like in Satya Nadella’s explanation: Microsoft will continue to build Windows Lumia handsets, but only three types: flagships, business-focused enterprise phones and low-end budget devices.
They’re retreating from being a mainstream player
They’re retreating from being a mainstream player,“ says Martin Reynolds, vice president at Gartner Research. „They’ll continue to bring products to market, but not particularly aggressively.“The move represents a clear refocusing, putting Microsoft’s phones in the arenas where they might actually score a few punches before Android and the iPhone walk away with all the market share. It also rightly ditches the current strategy of offering several different Lumias, each with region-specific models, which led to a muddled brand and a confusing market strategy message to consumers.
Even without the model shake-up, trimming the fat on the handset business Microsoft acquired from Nokia was probably inevitable. With a few exceptions (hello, curved screens), smartphone design and technology have more or less plateaued — it’s no coincidence that both iOS and Android have essentially taken a „bye“ in 2015, with few feature updates. Big hardware teams aren’t really needed to build good smartphones in 2015, as illustrated by upstart Chinese companies like Xiaomi and OnePlus.
„Things have changed in the last few years,“ says Reynolds. „You don’t have [to be a] big company to run a small phone business. They certainly don’t need the design teams and manufacturing people going forward.“
Still, there are new Lumias — and certainly a new flagship — coming soon. A couple of months after Windows 10 debuts, Windows 10 for phones will arrive, and, as Nadella suggested in his letter to employees, those phones will emphasize the big differentiators in the Windows ecosystem. Commentators like Daniel Rubino at Windows Central almost have you believing that a leaner-and-meaner Microsoft mobile division will be poised to succeed, albeit with lowered expectations, once Windows 10 is fully formed.
Let me get this straight, Microsoft *finally* focusing on enterprise for Windows Phone is a bad thing? Should have happened 4 years ago.
— Daniel Rubino (@Daniel_Rubino) July 8, 2015
That point of view overlooks the crux of the matter: Windows Phone’s fate was never in the hands of Microsoft. What the company does in mobile at this point is virtually irrelevant. It designed a beautiful (and influential!) user interface, offered sweeter deals to developers than competitors, and helped engineer some of the most sophisticated cameras ever seen on mobile.
None of it mattered. Developers and consumers didn’t respond, locked in a deadly catch-22: If the apps weren’t there, consumers wouldn’t buy the phones; if there weren’t enough people on the platform, developers wouldn’t bother creating apps.
„Windows Phone is not even a blip on [developers‘] radar,“ says Richard Hay, a longtime Microsoft observer and contributor to SuperSite for Windows. „They’re not going to start flocking to it, because what’s the draw? You’re still going to have the app gap.“
The „app gap“ ultimately dug Windows Phone’s grave, and even though it’s only got one foot in it, today’s news will be widely perceived as an admission that the other will soon follow. If there were other Windows Phone manufacturers, it might be a different story, but Microsoft makes 97% of the Windows Phones being sold, according to Ad Duplex. If they’re scaling back, who’s going to step up?
Windows 10 and mobile
If there’s a way Microsoft can resuscitate Windows Phone, it’s with Windows 10. Its ecosystem strategy doesn’t depend on it, but with the new OS, Windows Phones will be more connected to the platform than before, sharing all the same code and development tools.
„The universal Windows platform helps,“ says Hay. „Will that persuade developers to develop for handsets and smaller tablets? Is it enough to come back from the edge? i’m just not sure it is.“
That means Windows developers will be able to create Windows Phone versions of their apps with minimal effort, and some of Windows Phone’s key differentiators, like Cortana, will get a chance to shine on PCs, which could ultimately have a positive impact on the platform.
Finally, there’s Continuum — the feature that allows Windows apps to adapt from PC to tablet to phone seamlessly and lets a Windows Phone theoretically act as your PC when it’s plugged into an external screen. And although there will always be performance concerns when trying to do PC with a mobile processor, it’s a pretty cool trick.
Continuum, though, has only the slimmest chance of being the ace in the hole that wins the day — any day — for Windows Phone. Even for enterprise customers, it’s hard to picture any of Windows 10’s differentiators winning over users, especially now that we’re firmly in a BYOD and single-device world.
Even if Continuum ends up being an X factor, who’s left to give Windows Phones a chance?
Even if Continuum ends up being an X factor, who’s left to give Windows Phones a chance? Microsoft is certainly hoping today’s belt-tightening and the Windows 10 launch will lead to some kind of success in mobile, albeit on redefined terms. But it’s not acting in a vacuum. Today’s retreat — or rather the perception of it — may have sealed Windows Phone’s fate. Who would believe the recommendation of a Windows handset after today?Without those new users, developers will have even less incentive to create apps. And without those experiences, Windows Phone will be even more of shell than it is now. What then?
It’s admirable that Microsoft is taking painful steps to preserve what it’s built, but it’s hard not to see its Windows Phone restructuring as delaying the inevitable. Yes, by reducing its ambitions, it’s no longer losing on big bets. But in mobile, there really isn’t a low-stakes table.