The Status of Windows Phone - Alive, Dead or Dormant?

The Status of Windows Phone - Alive, Dead or Dormant?

This past week, since Microsoft released their 2nd Quarter Earnings Report, has proven to be a roller coaster for fans of the Windows Phone platform.

Overall the earnings reports showed that Microsoft is doing well across all of their key business areas including Cloud, Office 365, Surface, Xbox and Bing.

The one area that continued a downward slide was Windows Phone.

In the last fiscal quarter of 2014 for Microsoft, that would have been April to June 2014, Microsoft sold 10.5 million Lumia handsets. In this most recently completed quarter, October to December 2015, Microsoft reported having only sold 4.5 million Lumia devices.

This result should not come as much of a surprise to observers because it was in July 2015 when Microsoft announced significant changes to their phone business. In an email to the entire company Satya Nadella revealed an impairment charge of $7.6 billion around the purchase of Nokia and plans to substantially curtail the production of Lumia handsets moving forward.

His specific quote in that email was this:

“In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

It is that last part of the quote – long-term reinvention in mobility – that everyone should focus on.

That is also why I believe Windows Phone is dormant. Not quite alive – not quite dead.

Dormant is defined as having normal physical functions suspended or slowed down for a period of time; in or as if in a deep sleep. It applies to animals but I think it is a very good correlation to what is happening right now with Windows Phone and ultimately Windows 10 Mobile.

Everyone has seen this image leading up to and after the launch of Windows 10:

Windows 10 Ecosystem of Devices

This shows the span of devices that Microsoft sees as part of the Windows 10 ecosystem ranging from IoT devices to large screen Surface Hubs. In between them are various devices including Windows 10 Mobile.

Everything Microsoft has done with their mobile platform in the last 6 months’ points towards them putting the platform in a dormant state while they wait for some other aspects of the Windows 10 ecosystem to come together and mature.

It isn’t hamburger menus or transparency in the UI – it is the apps.

Last year I spent 6 months on Android after being on Windows Phone since it arrived in late 2010. I learned that while I can accomplish the things I need to on Windows Phone/Windows 10 Mobile the conveniences that access to a full app store gave me were significant.

Of course, I am talking about banking and insurance apps instead of Tinder, Snapchat and similar apps that are very popular with the younger generation of users.

I have always said that the app gap is niche and unique to each individual. You will make a mobile ecosystem decision based on several factors but if an app is unavailable for the platform you want to use then you are unlikely to just live without it on that choice. Instead you will pick a platform that has your app and move on from there.

The one aspect of the Windows 10 ecosystem that is trying to build the app collection for the various devices is the Universal Windows Platform (UWP).

We have already seen a steady stream of companies including PBS, Ring, NBC, CBS, TED, Netflix, TuneIn Radio, Shazam, AccuWeather, Garmin Connect, American Express, NPR One and Pandora bring their services to UWP and that trend should continue in the new year. Last month Microsoft confirmed that Windows 10 is being used by over 200 million active users each month so the audience for UWP apps is steadily growing.

Earlier today over on ZD Net, Mary Branscombe published an excellent article about Why Windows 10 Mobile could still be a sleeper hit and it focuses on app development, specifically UWP, as being the means to the end for Windows 10 Mobile and growing the app ecosystem for the platform.

It will take time to grow in that area so rather than just using all of their energy in this process early on to grow unnecessary hardware it makes a lot more sense to keeps things sleeping or dormant until the content catches up on the app side of the house. That means a trickle of hardware and most likely in the mid-range and premium categories.

We already know that Microsoft has the ability to build solid hardware and they can also iterate and innovate in that area so I do not expect any less when it comes to Windows Mobile hardware. This includes the further refinement of technologies like Windows Hello and Continuum Mode that we see in the Lumia 950 and 950 XL devices. Those technologies could easily translate into new hardware tablets and maybe even a Surface Phone or Surface Mini.

Bottom line is that I do not believe Microsoft is anywhere near killing off Windows Phone but have just left it dormant as the ecosystem around it changes and matures leading to a possible new Spring in the products existence.

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