Microsoft is Trading Phones for Something Much Better
Microsoft was a day late and a dollar short with their mobile operating system. From everything I’ve read about Windows phone along with conversations I’ve had with users, it’s an excellent phone and operating system. The biggest problem is that it entered the market at least 5 years too late for anyone to really care.
Now Microsoft is very quickly shedding their Windows phone business, and I think this is an excellent move by the company because it puts them in a place where they may actually be able to dig themselves out of this > $7 billion hole (a very conservative estimated cost of the Windows Phone debacle).
Here’s why: Microsoft’s Hololens Augmented Reality offering. By 2020 the Augmented Reality (AR) and Virtual Reality (VR) markets are predicted to be worth more than $150B. I suspect that by 2025 they will dwarf the current mobile market. So, if Microsoft can grab a significant share of the AR and/or VR market, they will be very well positioned to reap huge financial rewards. Getting rid of their pretty much DOA phone OS may allow them to focus on AR/VR with much more intensity.
There are several potentially exciting AR products currently shrouded in mystery and bolstered by hundreds of millions of dollars of investor funding. Magic Leap, backed by Google and others, is one of these, but Magic Leap hasn’t been made available to anyone in the press yet. Microsoft’s Hololens, though, has.
Microsoft is currently winning the PR battle for AR, and if they can deliver an amazing product and app ecosystem before Magic Leap and others, they might can turn their PR lead into a hardware win, even if their product isn’t quite as revolutionary as what Magic Leap seems to be promising.
Ultimately, I have no doubt that AR and VR are intimately tied into the future of both consumer and enterprise computing, and companies which ignore them do so at their own peril. Microsoft appears to be the current AR leader, and ditching their phone business may be a step towards driving the future of AR.