The war for mobile saw a new milestone recently when Microsoft publicly announced a change in tack, cutting its losses with the Windows Phone and writing down its $7.6B purchase of Nokia along with releasing 7,800 workers tied to that business.
Yes, they’ll still make a few phones that can demonstrate the full functionality of Windows but don’t expect any long lines waiting to purchase them. The white flag has unfurled.
Why did this happen?
The App Gap
Windows phones could not compete with iPhone or Android when it came to apps. This had been frustrating Windows phone owners for a long time, and this alone was probably enough to tank their handset division.
Maybe you can remember the GM restructuring a few years back. One of the biggest problems with their company was the dilution of their brand through too many sub-brands (Saturn, Pontiac, Oldsmobile, Buick, etc. etc.). This muddied the perception of GM, and robbed it of having a recognizable competitive advantage. When people buy brands, they express their identities through the brand. This is especially true with phones and cars. Apple has capitalized on this and Microsoft has well … not so much. Google has capitalized without tying itself down to a device, and Microsoft’s change in tack might be more aligned with Google.
It’s all about the Ecosystem
Microsoft CEO Satya Nadella has explained the move as a focus back to their core business. Windows 10, and making that ecosystem adaptable to all platforms (I’m paraphrasing a lot here). This feels sort of Googly. Play well with others, Put the user first, Don’t focus on the device. It seems like a pretty smart move. They gave the device market a try and wound up with something like 3% market share, which wasn’t enough for developers to start making those killer apps. And never have those apps been more aptly named.
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