Mobile Communications

No light on the horizon for Microsoft's Lumia

If there was any remaining hope among Windows Phone loyalists, the news that sales of Microsoft’s Lumia devices were down 73 percent year on year will surely extinguish it. And if Windows Phone serves any significant purpose in future it will likely be as a business case study. Unfortunately for Microsoft it will belong in the ‘how not to…’ section.

First, some context. For those of us of a certain age it’s still something to see Microsoft suffer so many setbacks in its mobile quest. Through the 1990s Microsoft appeared the Teflon-coated technology superpower, extending its dominance in PC operating systems to desktop productivity applications, volume servers, messaging, collaboration, games and the web. It reached a point where rumours of it entering a market would have Wall Street marking down the stock prices of rival brands. The assumption was that what Bill Gates and Steve Ballmer wanted, Bill and Steve would get.

The next decade proved tougher though as the world moved towards the web as its ground central and Microsoft fought internal battles familiar to anybody who has ever owned such prize cash cows as Windows and Office. But nowhere showed the lack of invincibility better than the fumbling efforts to make Windows Phone a success.

Windows Phone was predicated on a couple of tenets. First, Microsoft saw the need for “a third ecosystem”, arguing that buyers, carriers, retailers and developers did not want to be locked into a Google/Apple duopoly. Another bet was that the Microsoft ecosystem (tying into Office services and xBox, for example) would be an ace in the hole.

I think that these were the sort of false assumptions that big companies make when they justify their desire, or sense of entitlement, to stride into markets and make a big splash. Microsoft had been trying on phones for a long time and there was scant sign of buyers desperately wanting to get away from iOS or Android. Quite the opposite in fact: most users loved their smartphones.

As for developers, they effectively voted with their feet. Microsoft tried to prime the pump but most apps were late, half-hearted or not regularly updated. Microsoft tried to argue that buyers didn’t want or need a panoply of apps, like a Marxist telling the proletariat that their desire for nice things were merely “false needs” caused by cultural hegemony. It is, as the kids today say, a first-world problem, but who wants to be the only person in the room that doesn’t have a workable Instagram app?

Retailers and carriers? Perhaps they did welcome an additional source but if so they did precious little to show their love for it.

Microsoft threw money at Windows Phone but its only big win was Nokia, itself a declining company that had once held the sort of market share in mobile phones that Microsoft had (and indeed still has) in the desktop computer. Even that relationship was fishy with Stephen Elop, a former Microsoft executive, having been appointed to turn around the ship at Nokia and quickly sealing an alliance with Ballmer at Microsoft. Predictably, revenues from phones built on the stalwart Symbian platform evaporated almost overnight.

The first Lumia phones, built far more rapidly than was the usual cadence for the Finnish company, were decent but not so different from the incumbents’ products to move the needle in the direction of Redmond and Espoo. On the pair battled, but the numbers never spiked too far north. Microsoft eventually bought Nokia in a move that seemed desperate, like a child playing chess and desperately seeking space for his king against the massed ranks of queen, bishops, knights and rooks about to force checkmate.

Lumia is just about gone but Microsoft can point to the fact that its Surface product is showing signs of promise and already represents a $1bn business. People still want Microsoft Office and Outlook in business on their computers. But for phones? Not so much. 


Related reading:

Microsoft & Nokia: The fallout of a calamitous collision

New book charts Nokia’s wild ride

Nokia’s Android embrace


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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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