Why Windows Phone failed?
In October 2010 Microsoft introduced the Windows Phone 7 version of the Windows Phone operating system which was run by many big tech giants at the time such as HTC, Samsung, Dell, etc. But Windows Phone was the most expensive failure of Microsoft. In this story, I am going to explain why Windows Phone lost the competition against Google and Apple.
In January 2007 Steve Jobs announced a revolutionary device, iPhone. There is a reason why I am saying “revolutionary” because the product completely changed the game in the mobile phone market. The device had no traditional buttons (except a Home button). So it changed the game that Apple’s competitors like Google had to totally discontinue ongoing projects of the product and start it over with touch screen design, and it took one year for Google to release a new mobile operating system, Android. Apple was already at the top of the market with its high-quality device, which has allowed Apple to sell the product for a very high price ($499) compared to alternative devices on the market. Google chose a different approach to succeed, they made Android cheaper so that everyone could afford it. After the release of Android, the market was quite balanced, both Apple and Google had a similar share of the market until another tech giant Microsoft joined the game.
The mobile phone industry was not brand new for Microsoft, the company had more experience compared to Apple and Google. Microsoft already developed the operating systems Windows CE which is designed for small computers like “Handheld PC” (like kind of small laptop) and over the years Microsoft got deeper and made “Pocket PC” which is quite similar to mobile phones at that time but run on Windows CE. As you can see Microsoft had enough experience with mobile devices, they even had a 15% of the market share in 2007.
In one of the interviews, Steve Ballmer the former CEO of Microsoft was asked by interviewer about what was his first reaction when he saw the iPhone. He replied, “ $500, fully subsidized with a plan, that is the most expensive phone in the world and it doesn’t appeal to business customers, because it doesn’t have a keyboard, which makes it not a very good email machine”. The vision of Microsoft (or it is just the personal vision of Steve Ballmer) on mobile devices was like “an email machine” which is totally opposite with the vision of Steve Jobs. Probably that is the reason why it took Microsoft 4 years to realize that Apple and Google taking over the market and they should do something about it.
Microsoft began developing an operating system for touch screen mobile devices and it took 2 years to release it. The company came up with new features that Apple and Google had never done yet. But the operating system had very strict requirements in order to be able to run it. And that made it difficult for phone manufacturers to produce a device that supports Windows Phone operating system. As result phone manufacturers started to replace Windows Phone with the Android operating system which is much easier to run. That was a big mistake of Microsoft. Unlike Apple, Microsoft hadn’t produced a mobile device.
Microsoft got lucky, the former executive of Microsoft Stephen Elop took a CEO position at Nokia and he decided to replace Nokia’s Symbian OS with Windows Phone OS. After this move, Microsoft “invested” billions into Nokia as a “platform support payments”. Moreover, Microsoft did not get a licensing fee for its operating system from Nokia. Obviously, other companies such as HTC, Samsung, and LG didn’t like it because while they are paying licensing fees for using Windows Phone OS, Nokia is getting it for free. This resulted in other companies moving to Android.
4 years after Apple in 2010 Nokia introduced new devices that run on Windows Phone but it was too late and could not help Microsoft to compete with dominators Apple and Google. Since Apple and Google are dominating the market, developers, and companies were focused on creating apps for AppStore and Google Play but nobody wanted to make apps for Windows Store. By 2013 Nokia was in a trouble, and stock shares were dropped by 75%. Shareholders were requesting to get rid of Windows Phone, but no, later did Microsoft buy Nokia for $7.2 billion. Microsoft ends up firing more than 8000 employees and could keep Windows phones alive until 2017.
