Microsoft's steady roll-out of Windows 10 onto mobile devices continues this month as the Lumia 950 and Lumia 950XL reach reviewers and debut in retail channels. These two handsets are going to be little more than vanity releases because of the total domination of the smartphone market by Android and iOS. But Microsoft should not be worried.
Gartner's recent survey on smartphone market share gives Apple's iOS 13.1 percent and Android a massive 84.7 percent. Combined that covers 97.8 percent of the market. Microsoft's share of the mobile market through Windows Phone and Windows 10 dropped from 3.0 percent in Q3 2014 to 1.7% in the same period next year. BlackBerry's BB10, Tizen, and the other specialist platforms are fighting over an ever-smaller slice of the pie.
Microsoft is making all the right noises about mobile devices, but the truth is that beyond a very small hardcore of users, the dream of a market-leading mobile OS from Microsoft is over. Windows 10's mobile offering has many smart ideas but there is not enough volume of users that could support an extensive research and development process, offer economies of scale in manufacturing, suggest any significant demand for carriers, or offer significant action in the application markets that could support third-party developers.
Right now I can't see anything that could change this view in the Lumia 950 and Lumia 950 XL.
It feels like Microsoft's Satya Nadella realised this when he sat down in the CEO chair. Since then, Microsoft's mobile strategy has changed from the exclusive hardware-focused strategy of Steve Ballmer to the more open cloud-based strategy of Nadella. The former relied on Microsoft achieving enough market share to be regarded as a significant player worthy of resources and attention from the world. Instead the world's focus went to the Android and iOS ecosystems, their reliance on third-party apps to extend functionality, and the revenue opportunities that both platforms offered developers.
Microsoft is late to adopt the strategy third-partydevelopers realised years ago, but now Nadella has moved the company towards his 'cloud-first, mobile-first' vision. This gives access to Microsoft's cloud to iOS and Android devices (as well as Windows 10 and Mac OSX on the desktop), and Microsoft's key software offerings including Skype, OneNote, and Microsoft Office.
The success required Microsoft to use not just its own mobile platform, but to focus on the rivals' relatively open access platforms. Android is particularly effective here, available on nearly seventeen out of twenty handset. Microsoft can use Google's platform to reach these users and bring them into its own cloud. iOs may have a smaller footprint, but the users who are there have more buying power and are more likely to sign up to an annual subscription.
The strategy still has a long way to go, but the initial results are successful. Microsoft's failure to capture any significant market share with Windows Phone (and now Windows 10) was probably the best thing to happen. Rather than limp along with seven or eight percent thinking it might still happen, the crash in market share allowed Nadella to switch away from a hardware focused plan and use the strength of the opposition to Microsoft's advantage.
Now read how Microsoft saved the iPad Pro's first software offering...
