Microsoft – Back to front

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Back to front strategy of Surface Phone looks sure to fail. 

  • Mobile phones are a bit of a blank spot for Microsoft but 2017 is likely to see it give it another go despite the fact that Office 365’s success in iOS and Android have made this feat almost impossible.
  • It has been a very long time since Microsoft has done anything meaningful in the mobile phone and with the massive write down of the Nokia acquisition and the lay-off of the vast majority of the staff, it would almost seem that it has given up.
  • However, there is still a device in the works which will be part of the Surface portfolio to add to the excellent Surface Pro, Surface Book and Surface Studio.
  • This device will be called the Surface Phone and very much like its big brothers it will aim to be the ultimate mobile device and appeal to a certain set of users.
  • Unfortunately, I suspect that no matter how good this Surface Phone is, it will not appeal to even Microsoft’s hardest core fans.
  • This is because the mobile phone is a device that is predominantly used for Digital Life whereas the Surface products excel at Digital Work.
  • In Digital Work the Surface products are aimed at content creators and in that instance they are best in class.
  • However, every content creator is also a content consumer who predominantly uses an Android or iOS device for his Digital Life.
  • Therefore, Microsoft will have to make its Digital Life offering utterly compelling to convince even these users to move their Digital Lives to Microsoft and in that regard I see nothing but neglect and malaise.
  • This is why the Surface Phone will fail because no matter how good the hardware is, the ecosystem has deteriorated to a point where most of the apps that the user would want are not available.
  • Microsoft’s coverage of the Digital Life pie has deteriorated from 71% to 57%, developers are rapidly deserting the platform and user numbers are in free-fall.
  • This is how Microsoft has it back to front as users tend to being their digital lives with them into Digital Work and not the other way around.
  • Furthermore, the fact that Microsoft has made good quality versions of Office 365 available for iOS and Android devices substantially reduces any reason to buy a Surface Phone.
  • I have long believed that Microsoft’s most valuable asset is Office 365 meaning that it is in Microsoft’s interest to ensure that it works as well as possible on as many devices as possible.
  • Therefore, using Office 365 as a differentiator for the Surface Phone could actually do more damage than good to Microsoft as it could dent Microsoft’s reputation on the other, far more important platforms.
  • Hence, the only option would be for these users to have two devices, one for Digital Work and one for Digital Life.
  • However, because iOS and Android offer Microsoft’s Digital Work services to an acceptable level of quality and because the Surface Pro and Surface Book are so good at Digital Work and so portable, there is no reason whatsoever to buy the Surface Phone.
  • Hence, I think Microsoft would be best served in quietly dropping this idea and focusing its resources on the things that it does best and where it can succeed.
  • I think the mobile phone ship has already sailed.
  • Despite the inevitable disappointment, Microsoft’s share price does still not fully reflect the opportunity available in Digital Work which is why I still like it alongside Tencent and Baidu.

 

 

3 thoughts on “Microsoft – Back to front

  1. It only makes sense if the Surface Phone is based on Android, has Google Store and is preloaded with MSFT services and productivity differentiators (pen support, Continuum etc).

    If it is based on Windows Phone OS it is going to be DOA.

    • They wont be doing that…. It just doesent make sense period. This is because Microsoft has squandered the opportunity to become the third platform in developed markets and now there are only two: Apple and Google. I cant see how any phone makes any sense.

  2. MS would not ship a device running Android ever, it would only help Google’s long term plans to displace Windows.

    The leak of info about x86 on Arm emulation reveals their plans. The Surface Phone will run Win32 desktop apps when in PC mode via emulation, that is it’s big selling point.

    MS has changed tracks and is now trying to convert it’s PC user base into the MS ecosystem (win32 desktop apps are now allowed on Windows 10 store), not an easy feat as many PC users are deeply hostile towards MS still clinging on to outdated concepts like Windows should be a bare bones OS.

    Now is that a big enough point to turn things around, no but it does keep MS hanging in their at least if they can convert their PC user base.

    The one thing MS has I still don’t understand why they haven’t leveraged in the mobile space is proper games with the Xbox ecosystem, Apple and Google would kill for Xbox and it’s library/network. Any time anything games wise from Xbox or the like appears on iOS/Android it’s always given top promotion.

    There should be an Xbox phone were you can play Halo, Rocket League, FIFA etc, the technology is there the Nintendo Switch proves that but MS have just sat back and let others lead in this area, this could have kept Microsoft in the digital life market.

    The other big danger on the horizon for MS is they correctly guessed the next big thing is AR/MR with Hololens not VR and that would spur interest in digital life & work for the MS ecosystem however the leak that Apple is prepping AR/MR glasses to work in tandem with iPhone will surely torpedo Hololens.

    Apple’s massive app developer base will easily trump the inroads Hololens has been making even if Hololens it technically superior. MS thought MagicLeap was it’s only real competitor but Apple is a far bigger danger now it’s intent is clear.

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