State of Mobile Part II: Windows Phone

To analyze Windows phone, we must first evaluate Microsoft’s position in the PC space to understand and fully grasp the importance of the success of their Windows phone platform. My first blanket statement will be, “the PC as we know it, is dying, slowly but surely!” Some might categorize this death as a mere transition point where the market self adjusts to the trend towards mobile, but we can not ignore the bleeding experienced by PC companies today.

Research done by IDE on the market during the 4^th quarter of 2012 shows the performance of top five PC manufactures. Those within the top five are: HP, Lenovo, Dell, Acer and Asus. Looking at the numbers, Acer and Dell experienced more than 20% decline in sales while HP experience less than 1% decline. Thou Lenovo and Asus experience growth, the entire PC market contracted 6.4%. This is shocking due to two main factors, the 4^th quarter is home to the Christmas shopping season and Microsoft just released a brand new, bold,  ‘innovative’ OS, Windows 8!

What is driving the sales of the PC market into the ground? Mobile! Phones and tablets are now replacing desktops and laptops under Christmas trees across the global and this reality must scare the folks at Microsoft because their share of the mobile pie is of date insignificant.

The companies that helped Microsoft rule over the PC are now failures in the mobile space. HP, Dell, Lenovo, Acer and Asus have tried making phones and tablets but they have all failed to gain the kind of recognition they command in the PC world. This puts Microsoft in a very bad state; Android’s success now brings questions to OEM’s minds when considering investing capital in developing a new mobile product. At this war Microsoft is currently loosing.

Now lets look at Window’s mobile offering! Windows has successfully rebranded and reinvented the horrible, sad and disgraceful mobile OS system once called Windows Mobile. They have created something that is truly beautiful and innovative (Windows phone). The fruits of Microsoft’s procrastination are bitter; thou they have built a compelling product the bad reputation resulting from years of lacking in innovation is currently stifling the newly reformed platform.

Enter Nokia! This company is known for the being the best in class in hardware. We have all seen the memes! Nokia phones are long lasting devices; this reputation has brought some fortune to Microsoft and its fight to gain some footing in the mobile space. A partnership with Nokia that’s costing Microsoft more than it gains in licensing Windows phone has brought some life back to the dying platform.

Reformed hope! Microsoft agreements with Android manufactures will ensure new products are pushed out the door and consumers get to experience a more diverse collection of Windows phone devices, helping them to realize it’s a well made OS deserving of a seat at the table comprising of the giants of mobile. For now however Microsoft will have to bear with the their self created “kiddies table”.

I have faith in Microsoft. I think that this year we will see great products emerging from the recesses of Redmond. I hold the view that the new “Xbox 720” (as its being referred to) will be tightly integrated in the mobile strategy going forward. This will help to further convince consumers that Microsoft is ready to be innovative again. Another dimension that will spark growth will be the warming of consumers to Windows 8; the advantage of having the same user interface will make the transition into Windows phone much smoother! There is indeed hope. I don’t expect Windows to take the market by 2013 but by 2015 I expect a strong showing from Microsoft! 

Part III I will explore the world of Apple!