#windows phone

We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone. It wasn’t profitable for us. We were losing money for two years on those phones. So for now we’ve decided to put any releases of new Windows phones on hold.
Richard Yu, head of Huawei’s consumer business group, in an interview with WSJ. Worth noting that his comments on Windows Phone are still slightly better than those about Tizen, which has says has “no chance to be successful.”

Tom Warren:

Nokia sold nearly 251 million handsets last year, a mixture of feature phones and smartphones. While the Lumia lineup of Windows Phones only accounted for 30 million of that 251 million, Microsoft now has to plan and manage how it handles the millions of other devices that Nokia produces that do not run Windows Phone. That’s a mixture of Asha handsets, feature phones, and Nokia’s new Android-based X range. It’s a big worldwide business that places Nokia in second place behind Samsung in the top mobile phone manufacturers. Microsoft is now the world’s second largest phone manufacturer by sales.

Not sure which is crazier: that Microsoft is now the number two phone manufacturer in the world — or that only 30 million of the 251 million phones Nokia sold were Lumias?

Lots of good nuggets from Dina Bass, Beth Jinks and Peter Burrows on the end of the Steve Ballmer tenure at Microsoft:

Several directors and co-founder and then-Chairman Bill Gates — Ballmer’s longtime friend and advocate — initially balked at the move into making smartphones, according to people familiar with the situation. So, at first, did Nadella, signaling his position in a straw poll to gauge executives’ reaction to the deal. Nadella later changed his mind.

Strike 1. And in other words, Nadella was against it before he was for it. We’ll see how that ends up playing out now that he’s the man…

Ballmer was so loud that day in June his shouts could be heard outside the conference room, people with knowledge of the matter said. He’d just been told the board didn’t back his plan to acquire two Nokia units, according to people with knowledge of the meeting. He later got most of what he wanted, with the board signing off on a $7.2 billion purchase of Nokia’s mobile-phone business, but by then the damage was done.

Strike 2. But:

The tablet Microsoft finally came out with in October 2012, the Surface, was a dud. Windows 8, with a touch-based design, was released to mixed reviews. The smartphone operating system, Windows Phone, wasn’t a hit either — but Ballmer remained committed to it. A deadline was looming that would result in one of his last rolls of the dice.

Nokia made about 80 percent of handsets using Windows Phone, and the arrangement was set to expire in February 2014. Nokia had been dropping hints it might start making devices to run on Google’s Android platform. Ballmer needed a way to keep Nokia in Microsoft’s world.

Hard to see what other choice Ballmer had. Without Nokia, Windows Phone was effectively finished. Instead, Ballmer was. He struck out.

One more thing:

As Microsoft continued to lag behind rivals, some directors grew more unhappy. Ballmer had introduced Mulally as part of the company’s succession planning, and those on the board looking for ways to move Ballmer out talked in July about hiring the Ford CEO as a way to persuade the CEO to step down. In August, Ballmer, 57, announced he would retire, earlier than planned.

Interesting that it was Ballmer who ushered Mulally into the Microsoft mix, effectively sealing his fate…

Bill Gates in the summer of 1998 (from the same brilliant joint-inteview with Warren Buffett that I keep linking to):

Sometimes we do get taken by surprise. For example, when the Internet came along, we had it as a fifth or sixth priority. It wasn’t like somebody told me about it and I said, “I don’t know how to spell that.” I said, “Yeah, I’ve got that on my list, so I’m okay.” But there came a point when we realized it was happening faster and was a much deeper phenomenon than had been recognized in our strategy. So as an act of leadership I had to create a sense of crisis, and we spent a couple of months throwing ideas and E-mail around, and we went on some retreats. Eventually a new strategy coalesced, and we said, “Okay, here’s what we’re going to do; here’s how we’re going to measure ourselves internally; and here’s what the world should think about what we’re going to do.”

That kind of crisis is going to come up every three or four years. You have to listen carefully to all the smart people in the company. That’s why a company like ours has to attract a lot of people who think in different ways, it has to allow a lot of dissent, and then it has to recognize the right ideas and put some real energy behind them.

The first bit is important because it shows that disruption doesn’t always completely blindside those in power. Often times it’s just a matter of something happening far quicker than an incumbent realizes.

A great example of this with Microsoft isn’t just the internet as Gates describes above, but smartphones. Microsoft had Windows Mobile in prime position, but it wasn’t quite the “right idea” as Gates puts it. And once they realized that and came around to the right idea, it was far too late.

tendoboy1984 asked:

Your article about Windows Phone being late to the market was an interesting read. Microsoft still has a chance to be successful though. Consider the Xbox for example... They were very late coming to the video game industry compared to Nintendo (Xbox came out in 2001, the NES came out in 1985). Despite this very late start, the Xbox brand is now as successful as Sony's PlayStation, and both consoles get all the big 3rd-party games.

While that’s true about Microsoft with the Xbox (and even Sony with the Playstation — a company that originally wanted to partner with Nintendo), the smartphone business is very different.

Thanks to apps, content, and things like iMessage, there is decidedly more lock-in in mobile. Yes, the video game consoles have some lock-in with their games, but because the business changed so much generation to generation (with mixed backward compatibility results), there were obvious “switch points”. That’s not quite the same with mobile.

More importantly, Microsoft (and Sony) could get into the gaming business because they could buy their way in with the large publishers of games. So far, that hasn’t worked for Microsoft with smaller app developers. While money is money, time is often more valuable to these small teams. And they’re not going to waste time on a platform with relatively few users.

Paul Thurrott:

By the end of this year, things are looking better, and much better in many countries. Worldwide, Windows Phone commanded 3.6 percent worldwide market share. Still a pittance, you say, and fair enough. But continued year over year growth of over 150 percent helped Windows Phone catapult ahead of Blackberry for good. Indeed, Windows Phone market share is over double that of Blackberry.

Congrats on that, I guess. Some might consider it like winning a race against someone with two broken legs — but, as the Dallas Cowboys have reminded us time and time again this year, a win is a win. 

But this:

And where iPhone commanded a bit under 21 percent market share in 2012, it was down to 12.5 percent in Q3 2013. The distance between Windows Phone and iPhone has been cut dramatically.

Now, Apple will see a temporary one-quarter bump in Q4 because of the iPhone 5S, as is the case each time it launches a new iPhone, and Apple of course performs overly-strongly in just the United States, its richest and home market. But the overall trends are clear: iPhone is sinking as Windows Phone is growing. And if these trends continue, Windows Phone has a chance of catching up to the iPhone in the coming years. This was a fantastical possibility just a year or two ago.

Yeah, I wouldn’t hold my breathe here. Much of what Thurrott touts are Windows Phone’s big gains on a percentage basis. But that’s obviously because they were starting from a position of almost zero. It’s much easier to grow at a near-infinite rate when you’re starting from nothing. (Unless, of course, you count Windows Mobile.)

Tom Warren:

After over a year in the making, Microsoft is finally launching its Windows Phone Preview for developers. The program will provide registered developers with early access to Windows Phone 8 updates, bypassing the complex and lengthy carrier testing process. Microsoft is specifically targeting developers with this program, but for $19 a year any Windows Phone 8 user can sign up and get early access to updates. Even registered Windows Phone App Studio developers will be able to get early access.

There’s a lot of chatter today about how Microsoft is “bypassing” the carriers to get these updates to consumers, but make no mistake: this is simply the exact same thing as Apple releasing iOS betas to developers (though it’s more expensive to sign up for an iOS dev account — $99 a year). This is not the same thing as pushing these updates to consumers. While anyone can sign up for a developer account, the vast majority of “regular” users will never do that. Those users will still be beholden to the carriers.

Adam Satariano & Douglas MacMillan:

Ultimately, it comes down to where developers can make money — and that’s not with Microsoft, said William Hurley, a co-founder of Chaotic Moon, a maker of apps for companies including Walt Disney Co. He said the company’s most recent game, “Dragon Academy”— which is free to download, with consumers paying for upgrades — generated more in one hour of sales on Apple devices than was made through all of Chaotic Moon’s releases globally for Windows Phone in the past year.

Ouch. Even spending an infinite amount of money, it’s hard to see how Microsoft overcomes this. It’s exactly why being so late to the game was so damning.

What A Difference Six Years Makes…

Steve Ballmer, 2007:

Right now we’re selling millions and millions and millions of phones a year. Apple is selling zero phones a year.

Steve Ballmer, a few months later:

It’s sort of a funny question. Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody.

Now we’ll get a chance to go through this again in phones and music players. There’s no chance that the iPhone is going to get any significant market share. No chance.

Steve Ballmer, yesterday:

Mobile devices. We have almost no share.

I think we can probably do better for consumer names than ‘Nokia Lumia Windows Phone 1020. Yet, because of where both companies are and the independent nature of the businesses, we haven’t been able to shorten that. … Now, we can simplify the overall consumer branding and messaging gets much simpler. That is an efficiency of being one company.

Steve Ballmer, speaking during a conference call on the Nokia deal this morning. 

I mean, he actually said this — while typing on his Microsoft Surface RT with Windows RT featuring Office 2011 Pro Plus with Microsoft Live SkyDrive for Enterprise Workgroups using Azure for the Cloud 2013 Bing Edition 7.43 and a Touch Cover. 

Matthew Campbell & Aaron Kirchfeld reveal a few new details behind the Microsoft/Nokia deal:

Ballmer, who had initiated the talks, felt that Microsoft needed to own a branded consumer device, said a person with direct knowledge of the situation.

Which is why this is essentially the end of “Nokia” as a phone maker. Presumably, we’ll now get “Microsoft Lumias running Windows Phone” or some such. 

Also worth noting:

Meanwhile, Redmond, Washington-based Microsoft is keeping an eye on BlackBerry Ltd., the people said. The Canadian manufacturer has said it’s seeking a buyer, and its strong presence in the enterprise market could still attract interest from Microsoft, they said.

Microsoft may yet get to figure out if -1 + -1 can be made to equal 2.

Ben Thompson wonders (as I think we all are) why would Microsoft do this deal now when they already essentially have everything they would want from Nokia:

I theorize that Nokia was either going to switch to Android or was on the verge of going bankrupt. (I suspect the latter: part of the deal included €1.5 billion in financing available to Nokia immediately, and the fact Microsoft had to take Asha but not the brand or maps suggests they were trying to keep the price as low as possible). And, had Nokia abandoned Windows Phone, then Windows Phone would be dead.

The loan aspect of this deal is very interesting and seems to say a lot. Exactly in line with my thinking in June.