Monday 26 September 2016

As Microsoft suffers the 'app gap', will it switch off its phones?

Published 31/03/2016 | 02:30

A shop worker carrying a Lumia phone model.
A shop worker carrying a Lumia phone model.

Is Microsoft slowly letting its mobile phone division ebb away? That is one of the issues that I hope will become clearer at this year's Microsoft Build, an annual developers' event where Microsoft reveals the major trends and technologies it's working on.

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Ever since Microsoft bought out Nokia's handset business and abolished the Nokia brand, it has struggled to deliver on its promise of making Windows Mobile a genuine mass-market mobile platform to rival iOS and Android.

While Windows phones' excellent Nokia manufacturing heritage bought the devices some time, Microsoft hasn't been able to shake the 'app gap', where much-used services such as Snapchat, YouTube or banking services just didn't bother releasing apps for Windows phones.

This has led to a market where a large number of Windows phone users have been reluctant purchasers, such as office workers assigned a device without a choice or kids handed a phone by their parents because it was cheaper than other models.

But through this process, Microsoft has never admitted defeat on its mobile plans.

Indeed, last year it came up with a plausible new strategy for the handsets - part of a seamless user ecosystem with tablets and PCs.

But there are signs that the energy this strategy requires to succeed may now be reserved for other parts of Microsoft's business.

Mobile is a cut throat, capital-intensive business with just three or four companies making any real money out of it (principally Apple and Huawei).

If Microsoft really wants to make Windows phones a consistent third force, it would arguably take the lion's share of the company's effort and development brains.

With that clearly not on the table, are the days of Lumias and Windows phones now numbered? And do Irish companies which now push Windows phones on staff for IT management reasons have to reassess their whole corporate device strategies?

Furthermore, what might this mean for Microsoft's entire device ecosystem?

The company's stated position up to now has been that it is shifting its mobile phone division into an overall device strategy that uses 'universal apps'.

The idea is that when you switch off your work PC every evening, you could pick up exactly where you left off on your phone, home PC or Surface tablet.

But without a Windows phone in your pocket, that whole strategy has a vacuum.

Phones, the evidence suggests, are becoming the most important part of our daily computing and communication ecosystem. They are the critical link between your work and home PC. Yet if the roadmap for new Windows phone releases are anything to go by, things aren't looking great.

As third-party manufacturers shy away from making Windows Phones much any more, Microsoft itself will only release a small number of Lumia models this year.

Facing intense competition from Asian Android manufacturers and Apple, Microsoft's mobile market share is falling at what looks like a terminal rate.

This is not something to celebrate: diversity and competition are essential for pushing things forward in mobile, just as they are in any other tech arena.

Incidentally, there is plenty to focus on at this year's Build event outside mobile. Hololens, though still in development, continues to pique the world's interest; last week, Microsoft unveiled 'Holoportation', a communications and messaging system that lets people view hologram messages using the Hololens headsets.

Although headsets have a wobbly track record when it comes to mass adoption, Hololens genuinely looks cool.

Other notable themes this year include the prospect of opening up the XBox as a new platform to developers. That could bed the Xbox down as a smart TV box that competes not only with Apple TV, but eventually Virgin and Sky.

So there is a lot of stuff in Microsoft other than desktop software and phones.

The question is whether phones have any future in the company's future.

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