Microsoft has announced that it will stop supporting its Windows Phone operating system (OS) in December, bringing its now-lifeless smartphone venture to a close.
The strategy never really paid dividends for Microsoft, despite the fact that many people were, and still are, fans of the operating system.
Microsoft CEO Satya Nadella, however, is not one of those fans.
At the time the Redmond-based firm announced the acquisition of former mobile phone king Nokia, Nadella was quietly building the vendor’s cloud computing arm – now the biggest focus of the whole company.
He has since revealed that he was not a fan of Microsoft investing so much resource into a smartphone strategy.
In fact, Nadella’s belief was so strong that when asked by then-CEO Steve Ballmer if he backed the 2013 Nokia takeover, he said no.
Writing in his Hit Refresh book, which documents his revival of an ailing Microsoft, Nadella said his advice was ignored.
“The press criticised the idea and the Microsoft board was resistant,” Nadella wrote.
“Over the summer, while still in negotiations to buy Nokia outright, Steve Ballmer asked the members of his leadership team, his direct reports, to vote thumbs-up or thumbs-down on the deal.
“He wanted a public vote to see where the team was on the matter. I voted no. While I respected Steve and understood the logic of growing our market share to build a credible third ecosystem, I did not get why the world needed the third ecosystem in phones, unless we changed the rules.”
Microsoft tried to change the rules, but ultimately failed. The Windows Phone operating system was praised for its fresh, tile-based look, but was late into a market that had already seen Apple and Google offerings crush BlackBerry.
The Nokia takeover actually completed a few months after Nadella became CEO, leaving him to try to rejuvenate a business he had privately stated he did not believe in.
And for a time, Windows Phone seemingly had a shot. One CRN headline in 2014 predicted: “Microsoft to eat into Apple’s share of smartphone market.”
This same article trumpeted predictions that Windows Phone would have a global market share of 6.4 per cent by 2018. According to Statista, its market share for the UK in September last year was 0.73 per cent.
The Nokia experiment was short lived, with Nadella’s prediction that the vendor’s OS would always languish in third place proving true. In 2015 Microsoft wrote off $7.6bn (£5.9bn) related to the Nokia acquisition, which is more than it had actually paid for it ($7.2bn). Thousands of jobs, including one batch of 12,000, had been cut prior to this.
Staying true to Nadella’s initial observation, Microsoft is now recommending that Windows Phone users switch to iOS or Android devices – but is there much of an opportunity for the channel, given the minuscule market share?
Darren Seward, head of mobile at Westcoast, said a number of businesses that deployed Windows Phone devices a few years ago will likely be in the market to refresh their devices this year.
He said this creates an opportunity to nudge customers towards device-as-a-service offerings.
“Most companies will sweat their phone assets for three or four years, so the cycle is longer than it is for consumers,” he said.
“There is an opportunity for resellers to speak to customers to see if they’re running Windows hardware and there is an opportunity around selling the cloud services with it as well.”
The manufacturing of Windows Phone devices broadly stopped some time ago, but demand has remained stronger than one might think.
Seward said that while consumer demand diminished, companies that had rolled out Windows devices across their business still needed to buy handsets if, for example, some had been lost or broken.
In fact, in the months after mass production of Windows Phone devices ceased, the price of devices soared. Demand was strong enough for handset maker Wileyfox to restart production of its Windows Phone at the end of last year.
But the focus for Microsoft itself has been on software. Seward said that the vendor has worked hard to make the user experience of its applications – the likes of Outlook and Word – as good on Android and iOS devices as it is on its own.
For this reason, Seward doesn’t envisage any disruption to businesses looking to switch platforms.
Seward credited Windows Phone with making the channel more open to selling mobile phones.
As you would expect, Microsoft’s offering integrated well with its other products – from both sales and technical perspectives.
“Microsoft’s message around the time was about having key partners in the channel, and they had conversations with them around pushing phones as well,” Seward said.
“A lot of those resellers weren’t used to selling phones, if you look at some of the complexities around selling airtime and that sort of thing. They tended to shy away from it and let users get a deal somewhere else.
“The trend now is towards SIM-free devices, and there are lots of finance models that vendors and distributors have brought out to support the channel and end users.”
Ultimately, Windows Phone never lived up to the hype. It was perhaps its shortfall in third-party software that was the biggest contributor to its downfall.
“They are still focusing on hardware with Surface [and] when you look at the money that Microsoft invested in Nokia, I guess I did expect it to compete more,” Seward said.
“The key comes down to the apps. If you take a banking app, for example, you had an iOS version and an Android version, but you didn’t have a Windows version. That support is key for the survival of an operating system.
“Windows didn’t have that. The apps were always coming, but you have to persuade the developers and that never really happened.”