Microsoft Plays Waiting Game in Smartphone Race
Microsoft’s plan to revive its Windows Phone hasn’t been working
Stephen Elop, head of
Microsoft's devices group, unveiled the new Windows Lumia 640 smartphone
at the Mobile World Congress in Barcelona on Monday.
Photo:
Bloomberg News
Microsoft’s $9.4 billion purchase last year of Nokia Corp. ’s mobile-phone business was billed as a way to revive Windows Phone, the company’s four-year-old smartphone operating software. So far, Microsoft has fallen further behind.
The share of smartphones shipped last year that were Windows Phone devices slipped to 2.7% from 3.3% in 2013, according to research firm IDC.
The company of late has released mostly budget phones, a sector where growth is promising but competition is fierce. Many popular mobile apps are either unavailable on Windows Phone or are subpar when compared with the versions for iPhone and Android devices.
On Monday at Mobile World Congress, a major telecom-and-tech trade show in Barcelona, Microsoft unveiled two midrange phones targeted at emerging markets. Meanwhile, rival Samsung Electronics Co. generated buzz by launching a high-end phone.
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Microsoft officials say the company is playing the long game. It’s pinning its hopes for mobile revival on Windows 10, the next version of its operating system, which is expected to debut later this year.
Satya Nadella, in his first year as Microsoft CEO, has done much to put the company on a good footing, even as Windows has continued to lose relevance in the mobile and personal-computing markets. But Microsoft’s fortunes will be dimmed seriously if it can’t get traction in smartphones, which are fast becoming essential or primary computers in many consumers’ lives.
Stephen Elop , the former Nokia chief executive who oversees Microsoft’s devices group, says that Microsoft is comfortable waiting. The pause in rolling out new, high-end devices is part of a planned strategy and doesn’t reflect any internal development issues, he told The Wall Street Journal Monday. He promises a new flagship Windows phone will be on sale by year-end.
“It is a conscious decision to launch into the flagship tier with Windows 10 and new flagship devices,” he said.
The coming Windows version will, for the first time, serve as a common software backbone for personal computers, phones and tablets. The idea is to attract people who already use Windows on their computers. Microsoft is betting they will find it helpful to use a Windows Phone in tandem with their PC.
Mr. Elop said that the software unification under Windows 10 will enable software developers to make applications that run seamlessly on all Windows devices. That will give developers access to an alluring potentialmarket of hundreds of millions of Windows PCs, phones and tablets, he said.
But some of Microsoft’s refrains about Windows Phone are familiar. The company has repeatedly refashioned its smartphone system and pledged each time that Windows Phone was on the cusp of its breakout moment.
“People all over the world are about to fall in love with Windows Phone,” Steve Ballmer , then the CEO, said when the company upgraded the smartphone software in October 2012.
This time, there are early signs Microsoft may have a compelling pitch for Windows Phone, particularly in business settings, said J.P. Gownder, a Forrester Research analyst.
Microsoft has also talked about providing sophisticated security that should appeal to corporations worried about their employees roaming around with vulnerable company data on their phones.
With Windows 10, “there could be a different argument to make,” Mr. Gownder said.
