The Windows Phone Problem

Round about two years ago I was smitten with Microsoft’s then-new smartphone platform, Windows Phone 7. WP7 struck me as a breath of fresh air in a suddenly stagnant industry, striking a balance between Apple’s elegantly dull iOS and Google’s raggedly powerful Android, which was spawning what felt like dozens of frustratingly unpolished iPhone wannabes each and every month.

WinPhone was customizable and engaging where iOS remained static and inflexible. WinPhone was attractive and quirky where Android was a hot mess of mismatched icons and inconsistent widgets. Microsoft’s Mondrianian language of bold colors and crisp squares and rectangles caught my eye and held it from the first time I got my hands on a preproduction handset at a conference in September of 2010.

But Microsoft has almost entirely failed to make good on the promise of its smartphone revitalization. In the two years since that first Windows Phone 7 demo grew into the just launched Windows Phone 8, Microsoft has essentially done the following with its platform:

1. Bought Skype for $8.5 Billion in May 2011

2. Launched a Skype app 17 Months Later

On the one hand, this is great because one of the reasons I ditched Windows Phone ahead of CES 2010 was because I wanted to video chat with my family from the road. Lacking support for either Skype or Apple’s FaceTime platform, WP 7 offered me no useful solutions. Now WP 8 does, via an official Skype app that promises deep and useful integration into the core OS.

On the other hand, it took Microsoft eight and a half billion dollars and nearly a year and a half on top of that to launch mobile video chat. This is indicative of the plodding, self-destructive style that could doom Microsoft in the gilded age of nimble startups. Microsoft knew they needed video chat to compete with Apple and Google, both of whom support proprietary solutions along with Skype and other cross-platform apps. But it took them two full years to come up with the quintessential MSFT answer: Buy a platform for billions of dollars; Offer nothing over multiple product cycles while cultures, operational systems, and technologies are integrated; Finally, launch a consumer-facing solution that renders one year old hardware entirely obsolete.

3. Paid Nokia $1 Billion to Drop Symbian for Windows Phone

4. Launched a Nokia Flagship Device in January 2012

5. Launched a Major OS Upgrade and Marketing Push in November ’12, fronted by an HTC (not Nokia) Smartphone.

This is just a head-scratcher. And yet it’s not at all surprising coming from a company who just launched their own tablet computer that competes with  the hardware OEMs who’ve paid them Windows licensing fees for decades. But I digress.

Nokia’s Lumia 900 was my favorite phone of CES 2012. Nokia’s Lumia 920, launched some ten months later, is a bloated brick of a device I barely used for 24 hours before I grew tired of carrying around. This despite the 920 offering one of the best cameras and best displays in the game right now, not to mention the not-insignificant upgrades afforded by the Windows Phone 8 update. Granted, I’m fickle and picky about my phones. But Nokia went thicker and heavier while Apple, HTC, and Samsung, et al slimmed down and lightened up. Go figure.

6. Started Paying Developers to Port Their Apps to Windows Phone.

7. Upgraded Windows Phone Hardware Specs to Catch Up to the Competition.

Sometime last year lots of stories started surfacing about Microsoft courting developers to port their apps to the Windows Phone platform. I’m talking  ”there’s a big dowelry involved if your daughter marries me” sort of courting. More than one successful iOS dev I talked to told me about WinPhone reps making repeated overtures to them that included cash, engineering resources, and more cash. Microsoft’s motivation was obvious: Smartphone purchases had become as much about the ecosystem as the phone itself. If Mary’s friend shows her Pinterest and Angry Birds at a cocktail party and Mary wakes up the next day wanting in on the action, she’s not going to care what else the WinPhone platform can do if it can’t run Pinterest and Angry Birds.

Microsoft spent lots of resources courting developers. They didn’t get all that far, in part because the hardware running Windows Phone 7/7.5 was so far behind the times: No dual-core processors, no LTE support, no front-facing cameras, and relatively low-res displays.

So Microsoft finally took some of the shackles off their dev’s wrists with the newly minted Windows Phone 8. Top-tier devices including Nokia’s 920 and HTC’s 8X now pack dual-core Qualcomm CPUs and large, 720p HD displays. Only thing is, HTC just launched a new Android phone with a 1080p processor backed by a quad-core chip.  It’s hard keeping up with the Mobile Jones.

To their credit, Microsoft’s marketing campaigns have never targeted Windows Phone to bleeding-edge geeks. Instead, they’re going after the mainstream by preaching simplicity. That’s smart – WP8′s appeal lies in its at-a-glance Home Screen updates (called Live Tiles) and beautiful design language. But early adopters tend to set the trends when it comes to consumer electronics, and the earliest adopters of mobile gadgets still go for gawky spec sheets and impossibly thin and light industrial design. Windows Phone 8 still trails the pack in both regards.

8. Launched a New Desktop/Laptop/Tablet Platform to Keep Customers in the MSFT Fold. Or Drive Them Away for Good – it’s Hard to Tell.

Microsoft’s legacy strength is, of course, its huge install base on the consumer and enterprise fronts. Hundreds of millions of people across the globe use all flavors of Windows to power their desktop and laptop computers on a daily basis. A technology strategy that unified the user experience across the past (desktop), present (mobile), and would-be future (tablet) of computing would surely be a home run for a giant like MSFT who already counts so many loyal users among its ranks.

Not so fast.

Windows 8 is kind of a mess, thanks in large part to the design by committee decision to take a new, touch-centric user interface and slap it atop an old, click-and-point user experience. Early returns on Windows 8 cite confusion and kludginess far more than cohesion and familiarity. When your users aren’t sure which of their apps can run on which of their unified-ecosystem devices, that’s a bad sign.

Windows 8 RT, the OS that powers Microsoft’s new Surface Tablet, is faring better thus far, but Surface sales aren’t exactly making any dents in iPad, Kindle Fire, or even Nexus 7 market share just yet. Surface offers some legitimate benefits over iOS/Android-powered competitors, most notably by coming pre-loaded with MS Office and offering two roomy physical keyboard options that make for more comfortable typing.

As Charlie Demerjian smartly and scathingly points out, however, the advent of Google Drive (aka Google Docs) potentially nullifies the MS Office advantage. Why shell out hundreds per employee for desktop Win8 Office licenses and also limit your choices in mobile devices when you can use Google’s productivity apps on the cheap or even for free? Switching to Macs and iPhones, or even keeping your corporate fleet on legacy versions of Windows and adopting Android as a tablet/phone platform, may just offer more in the way of flexibility and savings than Windows 8 can even promise in terms of the potential benefits of a unified ecosystem.

Just as Microsoft’s being late to the game cost them dearly in the mobile wars, their reliance on the old model of selling software licenses could possibly be paving the way to a huge downfall in the new world order of platform-agnostic Web apps and cloud services.

9. Maybe, Just Maybe, Created Tomorrow’s Great Smartphone for Today’s Future Phone Users

Despite the above points, I don’t think Windows Phone 8 is necessarily doomed to failure. I just don’t think it’s well positioned to challenge the high end of the current US market. Microsoft should be – and I’m sure is already – looking away from the early adopters ubergeeks and towards the millions upon millions of global consumers who haven’t yet bought a smartphone of any sort. Mobile is still in its early stages, and in America and beyond there are plenty of folks who’ve yet to make their phones their primary computing devices. As infrastructure builds out and the costs of batteries, displays, and software services continue to come down, all of these people will adopt smartphones in the same way they purchased basic cell phones and SMS-capable phones over the course of the past decade or two.

Windows Phone has more than a fighting chance in these markets. The UI is attractive and easy to master, the typography is clear and the prompts easy to understand, and the platform is at once unified and controlled by a single corporate master but tied to that huge legacy of desktop users ripe for conversion to a mobile computing future.

Apple’s magical run could, of course, come to an end and Microsoft could then claw their way into a fight for first-world mobile supremacy with Google over the coming decade. But I have a hard time seeing that scenario playing out just yet. Instead, I think Microsoft faces a tremendous challenge and opportunity transitioning from their past to their future.

Windows Phone 8 is a solid offering in need of deeper developer support and some real user traction. Windows 8 may or may not be a death spiral-inducing mess in the making, but Surface is at the least a very intriguing first offering in a nascent space. And don’t forget Xbox. Xbox 360 is an awesome product with reach well beyond the next first-person shooter franchise. New rumors have Microsoft spinning off a lower cost Xbox set top box sometime in 2013, bringing casual gaming and the ever-growing world of living room apps to a wider user base.

Whatever the future of the “old” Windows of desktop PCs and clamshell laptops, Microsoft has a horse in the new world race for your smartphone, tablet, and connected living room dollars. What remains to be seen is if the folks in Redmond can effectively shed enough of their old skin to prop up a nimble, adaptable company willing to embrace the low-end while fostering the sort of real innovation that could propel them back into high margin territory down the road.

The days of Microsoft as monopoly are long gone. The future of the company, and the Windows it’s built upon, may just depend its willingness to reinvent itself as a scrappy, hungry, globally-aware startup.