Windows Phone 8 – Thirsty horse?

 

 

 

 

 

  • Microsoft officially launched Windows Phone 8 at its event in San Francisco yesterday with the main question remaining: is anyone actually going to buy it?
  • With Nokia, Samsung and HTC all having launched devices, the software has already been widely displayed but a few new things emerged that should serve to enhance the user experience.
  • Facebook is now more deeply integrated into the device with alerts and updates being pushed to the lock-screen and there is a new kid’s corner that allows kids to play games without affecting other areas of the device.
  • The Windows Phone store now has 120,000 applications with 46 out of 50 of the top apps on iOS now available.
  • Four nice looking devices are now available from Nokia, HTC and Samsung and greater support from Verizon was also announced.
  • Pricing is in line with Android with Verizon carrying the HTC device for $199 with a two year contract with the cheaper Nokia device (Lumia 822) going on at $99.
  • Microsoft has everything going for it.
  • Its user experience is highly differentiated and well implemented.
  • It has a vast array of assets to integrate into the experience such as MSN, Skype, xBox and SkyDrive to offer something special and different to the consumer.
  • Most of the major handset manufacturers are producing nice looking and well-built devices at reasonable prices.
  • And finally operators, who are desperate to get out from under the boot of Apple and Google, are on board and ready to support the launches.
  • With Android looking weak and vulnerable, Microsoft has never had a better chance than now to make a meaningful and lasting impact on the mobile phone market.
  • However, you can lead a horse to water but you cannot make him drink.
  • Those with a vested interest in Microsoft Windows Phone 8 can do everything except make consumers buy the devices and this is where the Achilles heel of the entire proposition is to be found.
  • This user experience has been around for 3 years but virtually no one has bought into it.
  • What’s worse is the fact that Microsoft have been trying to crack this market for 16 years but have still really to make any meaningful impression.
  • Don’t get me wrong. I like the Microsoft proposition and I think it offers a substantial threat to Android on paper but in the stores no seems to care. Yet!
  • With devices going on sale in November, Windows Phone is not going to make much of an impression this year.
  • However, if Windows 8 touch devices start to see some traction in 2013 then there could be a strong halo effect where the Metro UI on the big devices helps blow away the veil of ignorance that lies over the consumers that has kept them firmly with Android.
  • This could then lead to a realisation that Microsoft has produced something that’s pretty cool and useful at the same time, resulting in a nice upswing in market share to the detriment of Android.
  • If this happens, then Nokia’s share price will go with it but I have no clue when this might come to pass.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

Blog Comments

Boot of Google??? It is a very cooperative partner for carriers. It disables features, lets them earn revenue from Android’s app & media stores, even in its flagship handsets and allows OEMs to make further customizations for each carrier. MS is much closer to Apple in this regard than Google. Carriers may prefer a viable third ecosystem as a long term risk mitigation strategy, but calling them “desperate to get out from under the boot of Google” does not fit reality all that well.

I disagree completely. Google’s reason for existance is to categorize traffic patterns and to sell targeted advrtising on the back of that. This is best served when everyon eis using Google Applications. This is why they are free and why they have been heaviliy invested to make them great. If eveyone is loyal to Google applications then they will not be loyal to whatever applications and services the operator is trying to win user loyalty with. Google is effectively trying to steal the customer out from under the operator and the fact that it doesent really sell handsets makes it even more dnagerous as there is no rod to beat Google withto make it behave. It may look like a partner now but the end game is value for Google and bit pipe for operator…

Sure, I agree, loyalty to the ecosystem may be stronger than the loyalty to the carrier, but most of the smartphone users were voice & text only customers until just a few years ago. I doubt they have less loyalty to the carriers now. Besides, how is WP8 going to help in that respect? That is another ecosystem tied to the OS, not the carrier.

The carriers cannot really ask for major concessions from Google, expecting it to compromise its main business plan in giving away a sophisticated OS, with the threat of pushing WP8, which does not grant them those concessions, either. Besides, Android OEMs has been shown to be able and willing to give carriers hidden background capabilities (without user opt-outs) to track their users in fine detail (i.e. Carrier IQ software tracking URLs visited, search terms, location, when the screens get locked…). Carriers may not know how to monetize this knowledge very effectively, but that is not Google’s fault.

Its not going to help them in th elong run but MSFT will be nice to them now because it needs their support…as soon as MSFT is strong it will toss them contemptously to one side…..thats why the operators alsways root for the weakest players…everyone else will treat them like crap!!

the problem is that theeir is only a certain amount of loyalty to go round and the vendors / ecosystems have by far the strongest hand when it comes to gaining the user’s attention…thats where all the clever poeple are…operators tend to think like the utilities that they really are!..they have no chance…bit pipe future beckons…

I still don’t think carriers will support MS wholeheartedly if it will not be good for them in the long run, while unable to customize WP8 phones as much as Android in the short term. (Even the prized MS partner Nokia does not seem allowed to customize WP8.) “Not as good in the short term, no better in the long term” does not sound like a very attractive proposition to carriers.

I agree with you that weaker players will treat them better, but I think it makes more sense for them to support weaker *hardware* makers in Android ecosystem. Some such as LG and Sony are struggling in the mobile phone business, but they are reliable enough thanks to being part of bigger holding companies and some like ZTE and Huawei are growing rapidly, but eager to get a foothold in western markets. Why push a new OS with uncertain prospects? Waiting until WP gains some traction in the marketplace could be the more prudent approach.

Besides, Tomi Ahonen believes Nokia is suffering because Elop and MS is very bad at forging good relationships with carriers at the moment, so there is that, too.

Operators have done so in the past and I think that they will again as they are so desperate to avoid becoming bitpies that they will try anything. Look no further than the doomed RCS initiative for evidence of that. Operators do not seem to study history and therby seem to be dooomed to repeat it.

In this instance I think Tomi is totally wrong. The operators are VERY keen to have Microsoft in the fold as I have said before. Nokia is suffering becase of its own galacial slowness to do anythig with Symbian before it was too late and because users are unfamilar with Windows Phone and at the moment see no reason to learn. Windows 8 may encourage them to do so but its going to be a slow education.

[…] What is more Microsoft has been labouring for 16 years to make any real headway in mobile and so man doubt that it ever will despite its chances being the best that they have ever been. (see here for details) […]