Microsoft’s dream of Windows on phones is as good as dead — and that’s great for Microsoft – Business Insider


Satya Nadella
Microsoft CEO Satya
Nadella.

Manish
Swarup/AP


With
1% of global market share
, Microsoft Windows’ chances of
becoming a major player in the smartphone game are
basically dead.

It’s time to let Windows Phone go, and move on.

It sounds like Microsoft has: Apart from a cameo on HP’s
new high-end Elite X3 smartphone
, the Windows 10 Mobile
operating system didn’t rate any kind of appearance at
Microsoft’s most recent Surface hardware event. 

And in an
interview with ZDNet’s Mary Jo Foley
this week, Windows boss
Terry Myerson says the major reason that Microsoft is still
working on its Windows 10 Mobile operating system is more as an
investment in technology than an effort to build a commercially
viable product.

By continuing to work on Windows 10 Mobile, Myerson says,
Microsoft generally gets better at working with cellular
devices and with ARM processors — the same kind of
energy-efficient chips for smartphones that Apple has been using
in its latest MacBooks, but that Windows for PCs has never fully
supported.

When you stop investing in these things, it’s super hard,
super, super hard to restart,” Myerson tells Foley.


terry myerson microsoft
Microsoft Corporate VP of Windows Terry
Myerson

Screenshot

This is a huge blessing in disguise for Microsoft. The slow
death of Windows phones is a setback to Microsoft, to be sure.
But now that it’s done, and the albatross around the company’s
neck is lifting, a smarter Microsoft is already starting to rise
up.

Death spiral

Microsoft spent the lead-up to the launch of Windows 10
boasting that the new operating system would reach one billion
active devices within three years, across PCs, phones, tablets,
HoloLens holographic goggles, and the Xbox One console.

A big reason for Microsoft’s insistence it could get a
billion users was to attract developers to the Windows Store, the
app market that’s available across Windows 10 on all
devices. That would be a billion potential customers for app
makers, and hopefully enough to woo them away from focusing so
much on iPhone and Android.

And then, the idea was, this proliferation of
apps would lead to people buying more Windows phones, solving the
platform’s massive app gap. I

t was a bold, smart
plan to help Microsoft gain some ground on Apple and Google. It’s
too bad didn’t really work out that way at all.


microsoft surface panos panay
Microsoft Corporate VP of
Devices Panos Panay

Matt
Weinberger/Business Insider


Earlier this year,
Microsoft announced an indefinite postponement of that goal

as the Windows phone business collapsed even further. A little
over a year into Windows 10’s run, it has over 400 million active
devices, with the rate of growth slowing somewhat as Microsoft’s
free upgrade offer expires.

And the Windows Store is still pretty desolate. Companies
like Facebook and Uber have provided Windows 10 apps, but there’s
still no sign of smaller, cooler companies like Snapchat making
their wares available on the store.

All of which to say, Microsoft CEO Satya Nadella gave it
the best shot he could. It didn’t work, and now Microsoft is
taking a step back to refocus on the stuff that the company is
really, truly doing well.

Blessing in disguise

What it boils down to is this: Thanks to some smart, aggressive
work at appealing to niches with its Surface business, and
because it’s doing so well at putting its best stuff on other
platforms, Microsoft is making the very best of its situation.

Microsoft’s phone business may be a shambles, but the company’s

overall hardware business is stronger than ever
. The
Microsoft Surface Pro tablet and Surface Book laptop are a
profitable, $4-billion-plus business every quarter. Soon, the
much-anticipated
Surface Studio PC
will join that lineup. 

 So, yeah, maybe Microsoft isn’t winning in smartphones, now
or ever. And it seems increasingly unlikely that even the

long-rumored “Surface Phone”
will reverse the trend, should
it ever actually hit the market.


microsoft surface studioMicrosoft

But if the goal is to get Windows to lots more places, then the
company’s current Surface strategy makes a ton of sense. It’s
building the best laptops and tablets out there — and

winning converts like me over from Apple’s Macs
. It makes
Windows more appealing to whole new audiences.

And in the meanwhile, Microsoft’s
Office apps for iPhone and Android
are still some of the best
ways to get work done on the go, giving the company a
large-and-growing presence on people’s smartphones at home and at
work.

It’s not quite as good for the ego as owning the platform, but it
also means Microsoft benefits from Apple and Google’s hard work
of attracting customers. And there’s no more distraction for
Microsoft of having to worry about your own operating system,
too.

So let Microsoft keep working on Windows 10 Mobile as a technical
project, and keep the dream alive for Microsoft’s handful of
remaining smartphone fans. The company is making smart moves that
will ultimately carry it through no matter which way the market
turns.

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