Microsoft announced its Q2 2016 results yesterday, reporting strong performance for its cloud business and leading to a stock bump in the wake of the news. Its Surface tablet hardware business also performed well.
However it’s an entirely different story for the unloved phone-making business — that albatross around Steve Ballmer Satya Nadella’s neck. Buried low down in the earnings report, Redmond notes phone revenue “declined 49% in constant currency” — couching this as a reflection of “our strategy change announced in July 2015”.
Microsoft can couch away all it wants, but the truth is its phone business is dead. And no amount of ‘strategic fiddling‘ around the edges will change that. Indeed, the platform has been walking dead for multiple years now.
To underline how much the Windows (née Windows Phone) smartphone project has collapsed here are the year over year sales figures…
- Total Windows Phones sold in Microsoft’s Q2 quarter: 4.5 million vs selling 10.5 million in the year ago quarter
A spot of comparative context: just this week Apple announced it sold 75 million iPhones in its Q1. (And that in a quarter without significant iPhone sales growth for Cupertino.)
Of course we’ve known that Windows Phone has been walking dead for years now, given its failure to achieve significant traction outside a handful of European markets. In the U.S. the platform never took off. And even in European markets like Italy where it saw some small gains Microsoft has been unable to turn regional glimmers of growth into anything vaguely resembling sustained momentum.
To paraphrase Monty Python, Windows Phone is an ex-platform. Sure, Microsoft might say the platform is just resting. But consumers know the truth: it’s a dead parrot.
The question now is whether Microsoft will keep making smartphones as a showcase/vanity project. Or just kill off the division entirely.
Opinion is divided on that front, although given how many phone-related staff Microsoft has given the chop to already it is already pretty far down that path of ‘total focus’…
Either way, one thing is absolutely clear: consumers aren’t going to be buying smartphones running Windows.
Because people know a dead parrot when they see one.