Search, mobile devices, the Web and even the desktop represent challenges for Redmond
For all its success as the world’s biggest maker of PC operating systems and office programs, Microsoft’s position as the dominant provider of software to consumers is at risk.
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Obviously, Ballmer underestimated the iPhone’s appeal, at least publicly. Three years later, when Microsoft unveiled Windows Phone 7, company officials admitted they had to start from scratch. After a botched Windows Phone 7 software update broke devices that were already in the hands of consumers, Microsoft’s Windows Phone VP Joe Belfiore said Microsoft was still learning how to push out phone updates, a bizarre situation for a company that had been building phone software for years.
Windows Phone 7 has posted strong customer satisfaction ratings, but it doesn’t have all that many customers. It turns out Windows phone Q2 sales dropped from 3 million last year to 1.7 million this year, making the device even less popular than Bada, a smartphone operating system developed on the side by Samsung, which puts most of its mobile efforts into Google’s Android.
Things look even worse in the tablet market, which is utterly dominated by Apple’s iPad. Windows 7 tablets aren’t optimized for touch screens, and Windows 8 won’t be out until sometime next year.
A partnership with Nokia (which dumped Symbian in favor of Windows Phone 7) and the demise of HP’s webOS may help, but predictions from analyst firms IDC and Gartner that Windows Phones will top the iPhone in market share by 2015 were surprising to many. Even after the Bada numbers came out, Gartner stood by its prediction that Windows will become the No. 2 mobile platform behind Android by 2015, although it said the turnaround will not start immediately and will happen mostly outside of the United States. Even this optimistic scenario depends on the vast majority of Nokia Symbian users switching to Nokia Windows phones, instead of the more popular iPhones and Androids.
“The question, again, is Nokia Windows Phone 7’s white knight?” Miller says. “I think Nokia makes some brilliant hardware, but I’m not sure it’s really enough to pull consumers in.”
Developer interest in the platform will, as always, be crucial. One challenge is that instead of scaling its phone OS up to tablets, Microsoft has chosen to adapt its desktop OS to potential iPad competitors. This means applications built for Windows phones will be difficult to port to Windows tablets. Microsoft is set to release more details about Windows 8 in September at its BUILD conference, and this is one question Miller believes the company should address. “My hope is we will see something about app unification at BUILD,” he says.
Microsoft’s response: Microsoft declined to comment about Windows 8, and did not answer questions about Windows Phone 7 market share or the application development issue. Instead, Microsoft released this statement:
“*IDC has forecasted that Windows Phone will be the number two operating system worldwide by 2015. (IDC, March 2011)
*The Samsung Focus running Windows Phone 7 was voted the favorite AT&T smartphone in PC Mag’s Readers Choice Awards. ‘The Samsung phones had better reliability and call quality and were also noted as being the best for gaming: Windows Phone 7 devices come with Microsoft’s excellent Xbox Live.’ (PCMAG.com)
