Microsoft had a heck of week last week, didn’t it? It actually felt like it got its groove back with HoloLens, its holographic virtual reality glasses, which I have to say looked way cool. It also got our attention with the Windows 10 mobile strategy, and it showed off the desktop version of Cortana, something Siri can’t do.
In spite of its good, dare I say, great week, I have to wonder if Microsoft can make any headway in mobile. As of now, its tablet and phone marketshare numbers are simply abysmal. Microsoft is so far back in the marketshare pack, it’s going to take a huge leap to move the needle enough to matter.
That’s not to say that the company doesn’t have a mobile strategy. Satya Nadella has gotten well-deserved credit for refocusing the company, and creating a much more positive image. A united screen across mobile and desktop with Windows 10 could be attractive to consumers and developers alike, both of which have yet to warm to Windows mobile. But will it be enough to lift Microsoft from its current marketshare doldrums?
Microsoft bought Nokia last year in an effort to take control of the Windows mobile platform, and is finally creating a single-platform view across mobile and desktop. That’s great, as far as it goes, but people still aren’t buying Windows phones or even enough Surface tablets –and unless that turns around, it is going to have a very difficult go of it.
Let’s Look At The Mobile Phone Numbers
The company is betting that Windows 10 is going to be its mobile salvation and finally drive people to buy these devices, but we’ve heard that before and it hasn’t happened.
In fact, the company’s global marketshare for mobile devices is falling.
Consider looking at Kantar WordPanel mobile marketshare statistics. It’s a great resource, but it won’t make Microsoft or Windows fans happy. As of November, Windows’ phone marketshare in the US was sitting at a measly 3 percent. That’s after years of pushing the platform, and getting great product placement in movies movies and TV shows. What’s more, the number is actually down from 5 percent at the beginning of 2014.
I can hear fans of the platform sputtering: “But what about Europe?” What about it? Consider these November Kantar numbers:
- England was sitting at just 7 percent, down from a high of 12 percent in August, 2013.
- France? It had 9.8 percent, down from a high of 12.5 percent in October, 2013.
- Even Italy, a Microsoft stronghold, was 12.7 percent, down from a high of 17.1 percent in December, 2013.
The trend is down all around and it doesn’t bode well for the company’s mobile initiatives. I know Microsoft will argue that once Windows 10 hits the streets and people see how well it integrates across mobile and desktop, this is all going to change, but it’s hard to see these numbers turning around enough to make a significant difference. You could in fact, argue that at this point, the market has hardened and Microsoft is going to have a tough time pushing through iOS/Android supremacy.
In case you’re wondering in today’s quarterly earnings report, Microsoft reported selling 10.5M Lumias. That’s up from 9.3M last quarter, and while up is better than down, it’s an incremental increase at best.
Surface Pro 3 To The Rescue?
Putting Windows Phone aside, we’re left with the Surface Pro 3, a tablet-laptop hybrid that Microsoft loves to point to as a big win, and it’s done well, no doubt. By most reports, it can and should feel good about it. Yet in spite of impressive 67 percent growth in 2014, the company marketshare remains miniscule.
The Surface generated a healthy $1.1B in revenue in today’s report, up from $908M the previous quarter, but it still has miles to go before it catches iPad in second place, never mind Android in first.
That’s why Microsoft’s Windows 10 show was so important to the company. It gave them another opportunity to get sustained attention and it didn’t waste it. In fact, Microsoft actually wowed us a little bit, but don’t be fooled by a few minutes of HoloLens. As cool as it was, it’s never going to generate the kind of lift iPhone gives Apple or Android has given Google and by extension Samsung.
Don’t get me wrong, I was dazzled by HoloLens too. I get it, but I also understand that to truly compete in the next decade it’s going to take more than a holographic face computer.
The Harsh Mobile Reality
Microsoft appears to have done what it needed to do, perhaps something it should have done long ago. It created a single view from phone to tablet to desktop. Unifying the operating system was an important step, but it’s going to take some monstrous gains in mobile marketshare, especially for phones, for it to matter.
The reality is if it can’t attain significant marketshare, it can’t attract developers. It’s really not going to matter how easy it is to develop across desktop and mobile if the developer class isn’t paying attention. It’s also important to remember that the Windows 10 story is going to appeal to companies more than consumers, and the phone choice today for the most part is in the hands of consumers. Most companies aren’t buying employees phones anymore, and most consumers aren’t paying attention to Windows phones.
That means it would take a consumer sea change to make significant gains, and that doesn’t seem likely in its current market state, no matter how well integrated Windows 10 is across devices.