Understanding Microsoft's Global, Low-End Windows Phone Strategy

[scolaner]

On the surface, Microsoft appears to be striking out on smartphones, but the company has a master plan for tackling the mobile market, and it has little to do with high-end flagship devices.

Understanding Microsoft's Global, Low-End Windows Phone Strategy : Read more

 

[turkey3_scratch]

This sounds like dai-jaa-vou (however you spell it) to me:

" it wants users engaged with its OS on their mobile device, tablet, PC, and so on."

How is this any different than what they did with their Windows 8 phones? They are really reattempting to do the same thing, a device-globalized operating system. Let's face it, a phone can not run half the stuff the desktop operating system can, and the apps such as Office and typically boggled-down. I think Microsoft should take a new approach rather than the "Windows on all devices" again, as it didn't work the first time so why go again?

 

[Martell1977]

TBH, flag-ship phones get the most press and if people can't afford a high end phone, they look for cheaper models. I went to AT&T the other day and there were a total of 2 Windows Phones there, everything else was Android or Apple. The store was busy (about 30 people there) and no one was even looking at the Windows phones.

If you don't have a buzz worthy flag-ship phone, no one will pay attention to low end phones. High end phones grab peoples interest and the mid to low end phones are there to fit various budget ranges. I actually have a Lumia 822 and was looking for an upgrade, which from what Verizon and AT&T have to offer, that upgrade doesn't exist. When my contract comes up, I am pretty much forced onto Android due to lack of options.

 

[aaronmark017]

Its true they don't have flagships now. But Lumia Icon (verizon) and Lumia 1520 (AT&T) still are two great options. You can buy them from amazon for a short until they release flagship and you can go off-contract for few days and I know AT&T give discount for going off-contract. And I totally agree that fact that even though flagship does not give much profit (at least for windows phone) but these are great for attention grabber which would eventually increase sell of lower end device. One more thing for some weird reason in US people don't prefer to try new things and so it is tough to convince to windows phone those who are apple or samsung users (may 80 % of them) but for emerging markets a lot of people will be the first time smartphone users and budget is a big deal for them. And I pretty sure Lumia can deliver a great experience in terms prices, and thus they want to grow. Once they have good market share then more developers will come to it, and it will increase sale in US or other developed countries. I think this is what MSFT is thinking

 

[virtualban]

And still users only want the same interface with no learning curve, and an up-to-date hard/soft backing system, but MS has still wax on their ears.

 

[jankeke]

@turkey3_scratch
"This sounds like dai-jaa-vou (however you spell it) to me:"

Déjà vu. It means "already seen" in french.

 

[CaedenV]

You are so wrong. MS does not have a 'low end strategy' unless you count running with plan C (or is it Z?) as 'strategy'.

Right now MS is suffering from it's purchase of Nokia. Nokia pretty much gave up in the last year or so of it's existence, and the crap quality of it's devices and the limited reach of it's higher end offerings really shows that out. The phone production cycle is ~18 months from paper to release, so pretty much everything we have seen MS launch so far is still running largely on Nokia's pipeline, not Microsoft's

Secondly, Nokia had some pretty neat devices in the pipeline set for release last fall in the McLauren devices. These devices had a screen sensor that could detect things like a finger hovering above the glass which could be used to trigger drop-down menus and mouse-like use and gestures. Sadly this technology was not ready for the devices, and the rest of the hardware was not differentiated enough from the current flagships (930/Icon and 1520), so MS killed the devices shortly after the Nokia purchase.

MS is not a stupid company. They are well aware that they need a flagship device or two. They intended to release one as an aspirational device that would get people's attention, which would then push their lower end volume devices. But it was a call between launching a flagship that nobody was going to be thrilled with which would damage their brand, vs holding out until MS's own production lineup was able to be put into place and 'doing things right'.

Personally I think that they made the wrong call. The Icon/930 was not accepted (or generally available) as a replacement for the 92x lineup, and releasing some kind of 935 device that was a little slimmer and had features that we have been asking for of the 930 would have really shown a lot of good-will among WP fans. Even if it was just a minor refresh and didn't have the new finger sensing tech, it would have sold more units and would have been a device that their marketing department and fans could have gotten behind. But instead they are treating it like it never happened, claiming that they are just focusing on devices for 'the next billion' users that the next billion are not particularly interested in.

That being said, MS does have a flagship (and probably 2) in the lineup for release 'with Windows 10' which is expected 'this summer' which will hopefully stem the bleeding and start winning mind-share back. Hopefully it is not too little too late, but with any luck we will see MS make a comeback.

 

[dikfitzwell]

i'm left handed i lost my other hand in a bike wreck so what about people left handed do we not matter to logitec?

 

[aldaia]

Windows phone may still survive in a few selected countries, however, global market share is around 3%, which is close to dead. IOS was as low as 12% but thanks to iPhone 6 climbed to 20% in Q4 2014. While, 3% of the low end market means absolutely nothing, 10-20% of the top premium market is flooding Apple with money.

Isn't it ironic that Microsoft has to give windows phone for free, while it gets several billions from Android patent royalties?

 

[Merry_Blind]

@turkey3__scratch

It's "déjà vu" just so you know. It's French. Literally means "already seen".

 

[Merry_Blind]

Oops didn't notice @jankeye had already beat me to it!

 

[jabliese]

Smells like desperation to me.

 

[koss64]

I agree with MS going for the developing markets with low end(but quite functional ) devices.A girlfriend of mine recently asked me my opinion on a new phone and she specifically wanted a cheap windows phone and I was able to find one quite quickly for her. Windows is getting more traction in these markets than the expensive iPhones and Galaxys where these phones can cost half a years wages on average.

P.S. Note to the author the company's name mentioned at the end of the article is Blu, not Blue.

 

[Braddo]

I'm completely in favor of this strategy. In my opinion the iPhone is the best phone you can buy but with a starting price of $650 it is completely over priced. I don't fault apple, if people are willing to pay the premium why change. I am normally one who prefers to pay to get a higher quality product but I refuse to buy one because I don't see the value. I have a Lumia 635, it cost me $50. The camera stinks, the 512mb RAM is on rare occasion an issue and of course MS doesn't have the app support that Apple has. That being said 95% of the time it satisfies my needs. in a few months I can upgrade to a Lumia 640 for ~$100 which will get me a better screen, better camera, more memory and a variety of other new features. I can afford to upgrade several times a year and still come out ahead compared to iPhone. I would love to see more competition in the low end pushing high end features into lower price point phones.

 

[RedJaron]

I agree with MS going for the developing markets with low end(but quite functional ) devices.A girlfriend of mine recently asked me my opinion on a new phone and she specifically wanted a cheap windows phone and I was able to find one quite quickly for her. Windows is getting more traction in these markets than the expensive iPhones and Galaxys where these phones can cost half a years wages on average.

P.S. Note to the author the company's name mentioned at the end of the article is Blu, not Blue.

This is what I'm thinking / hoping. Yes, you can get low-end Android devices, but the quality and performance varies wildly. As Windows Phone was developed to be more efficient, it should be able to run well on lower-spec hardware without giving anything up.

 

[Alec Mowat]

Microsoft.
Stop trying to please everyone all the time.
You've been trying to please everyone for the two decades and you keep failing. Stop trying to make a product that you think we want.
Make a product that actually works, and we'll want it.
Make a mobile product. Make a business product. Make a home product. Make a cloud product. Make a server product.

One OS to rule them all was an absolutely failure. That product isn't ready yet, Microsoft.

 

[AMRooke]

MS has made 2 serious mistakes in the US marketplace:
1) The US is where WP got its start, and we bought 920 and 1020 flagships. There have been few options since except for low end phones that we don't want (Icon was Verizon, which didn't support it, and they went with a cheap display without Glance; the 1520 was too big, a phablet). My 2-1/2 year old 920 needs an upgrade, but there's nothing out there.
2) Carrier exclusives, the death nail. This prevented US customers from matching phones with carriers. Even worse, the carriers offered poor support, and sales staff would NEVER push WP to customers, often actively pushing customers away from WP to other platforms. Exclusives absolutely have to end immediately.

 

[scolaner]

P.S. Note to the author the company's name mentioned at the end of the article is Blu, not Blue.

Indeed, thanks for the heads up.

 

[scolaner]

You are so wrong. MS does not have a 'low end strategy' unless you count running with plan C (or is it Z?) as 'strategy'.

Right now MS is suffering from it's purchase of Nokia. Nokia pretty much gave up in the last year or so of it's existence, and the crap quality of it's devices and the limited reach of it's higher end offerings really shows that out. The phone production cycle is ~18 months from paper to release, so pretty much everything we have seen MS launch so far is still running largely on Nokia's pipeline, not Microsoft's

Secondly, Nokia had some pretty neat devices in the pipeline set for release last fall in the McLauren devices. These devices had a screen sensor that could detect things like a finger hovering above the glass which could be used to trigger drop-down menus and mouse-like use and gestures. Sadly this technology was not ready for the devices, and the rest of the hardware was not differentiated enough from the current flagships (930/Icon and 1520), so MS killed the devices shortly after the Nokia purchase.

MS is not a stupid company. They are well aware that they need a flagship device or two. They intended to release one as an aspirational device that would get people's attention, which would then push their lower end volume devices. But it was a call between launching a flagship that nobody was going to be thrilled with which would damage their brand, vs holding out until MS's own production lineup was able to be put into place and 'doing things right'.

Personally I think that they made the wrong call. The Icon/930 was not accepted (or generally available) as a replacement for the 92x lineup, and releasing some kind of 935 device that was a little slimmer and had features that we have been asking for of the 930 would have really shown a lot of good-will among WP fans. Even if it was just a minor refresh and didn't have the new finger sensing tech, it would have sold more units and would have been a device that their marketing department and fans could have gotten behind. But instead they are treating it like it never happened, claiming that they are just focusing on devices for 'the next billion' users that the next billion are not particularly interested in.

That being said, MS does have a flagship (and probably 2) in the lineup for release 'with Windows 10' which is expected 'this summer' which will hopefully stem the bleeding and start winning mind-share back. Hopefully it is not too little too late, but with any luck we will see MS make a comeback.

I am not wrong.

And your comment makes me think you didn't actually read the article, and possibly didn't read the headline.

I have no qualms, necessarily, with the majority of your comments on flagships and how Microsoft has done in that space, in the U.S. And yes, Microsoft has confirmed that a flagship phone is coming at some point.

But you're only thinking of flagships in North America. The mobile market is much, much bigger than that, and growing rapidly. I'm talking here about the company's *global" strategy.

I was going to make some more points here, but I already made them in the article...

 

[aldaia]

2014 numbers tell another story:
- 1059 million android devices sold (here is where Microsoft makes money)
- 193 million IOs devices sold
- 35 million windows devices sold (here is where Microsoft loses money)

 

[Avus]

Honestly, for MS, low end phone strategy is the ONLY strategy they have...

 

[scolaner]

MS has made 2 serious mistakes in the US marketplace:
1) The US is where WP got its start, and we bought 920 and 1020 flagships. There have been few options since except for low end phones that we don't want (Icon was Verizon, which didn't support it, and they went with a cheap display without Glance; the 1520 was too big, a phablet). My 2-1/2 year old 920 needs an upgrade, but there's nothing out there.
2) Carrier exclusives, the death nail. This prevented US customers from matching phones with carriers. Even worse, the carriers offered poor support, and sales staff would NEVER push WP to customers, often actively pushing customers away from WP to other platforms. Exclusives absolutely have to end immediately.

I don't disagree with you. I'm not which came first, the absence of a new Windows Phone flagship or severely lagging sales, but the fact of the matter is that Windows Phone in the U.S. is Nowheresville.

I'm very curious how the Lumia 640 and 640 XL will do. They're delightfully inexpensive off contract, and the U.S. needs more phones like that: Decent specs, very very low price point.

 

[RedJaron]

I agree with that. The 530 and 531 sold pretty well too ( $100 or less and no contract. ) #2 however is pretty prevalent. WP has been getting crap support from retailers and carriers. There was a nice initial push, but then nothing. I can't even find a WP ad or display when I walk into most stores now.

 

[Dajma]

I have been using Windows Phones since the 920 was launched. Since then I have purchased the 1520, 625, 820, 830 and a 520. Every time I have visited my mobile dealer, I have asked him no one cared about Lumias. However, this has changed over the past year. I visited the store just yesterday and he told me that MS strategy of low cost phones is working and he is now selling a lot of 535s.

I was actually surprised to note the change in his business and attitude some what. So yes, it seems like MS strategy is working in countries like Pakistan.