Microsoft Reportedly Working On Its Own Smartphone

According to a (paywalled) report in the Wall Street Journal, Microsoft is experimenting with its own smartphone design. "Officials at some of Microsoft's parts suppliers, who declined to be named, said the Redmond, Wash.-based company is testing a smartphone design but isn't sure if a product will go into mass production." The article continues: "If Microsoft pushes ahead with its mobile phone, it would underscore how far Microsoft has moved away from its long-standing practice of making software and leaving decisions about design, features and marketing of the computing hardware to partners such as Hewlett-Packard or Samsung Electronics. ... As it does so, Microsoft pulls from a modified playbook of Apple—whose hardware-plus-software approach Microsoft officials long have scorned. ... Smartphones running Microsoft's two-year-old Windows Phone operating software for cellphones haven't sold well, and Microsoft may want to leave itself an option to test whether its own phone would spur sales."

Comments

MS killed the Nokia star

[faragon]

That's terrible for Nokia. The few chances for its survival, IMO, now are gone :-S

Re:MS killed the Nokia star

[base2op]

What's funny to me is that Elop went all-in on the Windows Phone strategy because he didn't want Nokia to be just another Android device maker. Now they're just another Windows Phone maker.

Re:MS killed the Nokia star

[roc97007]

That's terrible for Nokia. The few chances for its survival, IMO, now are gone :-S

True. But it's a logical move for Microsoft. The world has changed. The paradigm of selling an operating system at high profit margins is failing against the paradigm of giving the operating system away in order to sell devices. Microsoft can't compete with that without changing the way they do business.

Frankly, Nokia should have seen this coming.

Re:MS killed the Nokia star

[paladinsama]

Nokia is the company that closed a digital store and revoked the access to all purchases to their customers. Death is an appropriate fate for them.

Re:MS killed the Nokia star

[FuegoFuerte]

I'll take on your points one by one, and disagree on all of them:

Agreed. Nokia == BlackBerry.
That's quite a stretch... BlackBerry == early smartphone maker who has since refused to innovate and even refused for many years to use touchscreens. Nokia == early maker of "dumb phones" who, while being early to the smart phone game, never really did well in it, resting on their success in the dumb phone market. They have now woken up and started to pursue smart phones in a serious manner.

Device manufacturer means NOTHING in the mobile marketplace - operating system does!
Samsung is doing fantastic using Android, while HTC is very rapidly losing market share, and Motorola is a Has-Been. Device manufacturer means NOTHING? Please... I think HTCs shareholders would have some rather strong words for you.

Windows mobile is terrible and will continue to be terrible, so I'm not sure that it was much of a lifeline to begin with.
Have you actually used Windows Phone? (I mean 7, 7.5 or 8, not the old 6.5 or before). It's the only one of the major contendors that doesn't look like a smartphone swallowed Windows 95 and then puked icons all over itself. It's incredibly stable, and has a lot of built-ins that make a lot of the most common smart-phone tasks very simple and fast.

The market wants iOS and Android. Nobody else matters. Microsoft just has a lot of money so they pretend that people care about them as a mobile OS provider. They would make more money by manufacturing Android phones.
A lot of people I talk to want an alternative to the somewhat stale iOS and craptastic Android. I think Microsoft actually does have a chance, and with the amount they're investing in Windows Phone I think it's a pretty good chance at that. Oh yeah, and they already make a lot of money off Android phones... Love 'em or hate 'em, patents are a beautiful thing if you're on the right side of them.

Microsoft has made some serious mistakes in mobile, but they're hardly out of the game.

Note: In the interest of full disclosure, I currently work at Microsoft, though nowhere near the Phone or OS divisions. I do hope to see Microsoft succeed in the phone world, partly because I own stock in both Microsoft and Nokia, but my coworkers would tell you I have no problem bashing decisions I disagree with at the company.

Re:MS killed the Nokia star

[Billly Gates]

People do care. Average users as they want something that looks cool that their friends use and has all the cool apps they are familiar with.

I spoke to a phone salesmen and he told me Nokia has the highest returns in his store. The Nokia luima actually and didn't recommend it!

That says a lot right there.

It is the classic example of MBAs trying to get ahead by staying behind the competition with excessive cost cutting. Not trying to make a better phone to gain more marketshare which is what Apple and Samsung is doing. Though the new Galaxy 3 is cheaper and breaks easier unlike the IPhone 5 and older Galaxies sadly.

Re:MS killed the Nokia star

[LongearedBat]

nobody cares what OS is on a phone

A few years ago, yes. But I think things have changed with advent of apps.

So many people are now used to running a variety of apps, that those who buy smartphones opt for iOS or Android. (Users might not know what an OS is, but they will ask the salesman "Does it run apps?")
Lack of apps -> Lack of interest in the high end user base -> Lack of sales

Sure, many low end users still don't care about apps. "Why should I pay for a smartphone when all I want is a cheap and simple phone?" This is why WP7 has not yet gained traction.

Consequently, if WP claws it's way to populatity, it must be due to some clever business strategy.

Part of such a clever business strategy might be to ensure a high minimum quality/performance of the devices, achieved by actively taking control of the building process.
Another part might be to "train" the existing user base into using and liking Metro. When a phone works seamlessly with the computer and "it just works", then that phone will be more attractive, thus making it easier for users to migrate to WP (mainly Windows users who are not yet avid app users).

In other words, Microsoft is beginning to compete toe to toe against Apple, using strategies similar to Apple's. And with enough strong business practices, MS might actually succeed. But it won't be quick.
What worries me is that if MS succeeds, then Android might fall behind. That would be sad.

However it plays out, I don't see WP becoming one of the big OS's in a hurry. It's more of a medium term plan. The catch up will take a few years.

Re:MS killed the Nokia star

[Hal_Porter]

What's even worse is that Nokia make some excellent hardware.

If you look at the reviews of the Lumia 920 the hardware is top notch. What is a problem is that no one (well to reasonable assumption) wants Windows Phone.

A lot of people do want Android though. And Nokia has a chance of competing with Samsung which makes excellent but (compared to Nokia) rather pricey hardware.

If you look at phones like a Nokia Express Music series they are pretty damn good. And very cheap. If they'd launched them with Android instead of Symbian I think they'd sell well, especially in poorer countries. And an Android Lumias would be bound to sell better than an WP ones.

Also WP doesn't help Nokia's real problem which is its long development cycles. That's something Sony Ericsson suffered from too. Making phones in unionised Nordic countries is always going to be slower than doing it in Asia. Nokia were well aware of this

http://www.fonearena.com/blog/30489/nokia-ceo-stephen-elop-nokia-our-platform-is-burning.html

"Chinese OEMs are cranking out a device much faster than,the time that it takes us to polish a PowerPoint presentation"

If I were in charge of Nokia here's what I'd do with smartphones.

I'd keep the industrial design in house. I'd should outsource the hardware design and manufacturing to Taiwanese ODMs and switch to Android (if Microsoft want WP support they'd need to pay and I'd do as HTC and Samsung do and still sell mostly Android phones). So you'd have a basic case design done in Europe shared across a series but rapidly redesign the internals - baseband chip up - to keep the performance current. In terms of baseband I'd buy from anyone who would sell chips that could run Android - i.e. Qualcomm, Samsung, TI, ST Ericsson. Nokia would sell its baseband business and let it operate in competition with these suppliers, but Nokia would only buy from it if its designs were competitive.

The bundled apps - Nokia's maps for example - could be either done in house or outsourced.

The idea is that the things that make a Nokia a Nokia - industrial design and bundled apps - would be decoupled from the hardware design which would then happen more quickly.

Also the underlying base band chip would change from phone to phone. So if Qualcomm had the best chip in one generation, they'd get the order. If Samsung had the best chip in the next one they'd get it.

Sony Ericsson originally bought all its baseband chips from Ericsson Mobile Platforms. They got further and further behind Qualcomm in terms of performance, particularly after Qualcomm launched the Snapdragon. Eventually Sony bought out the phone business and started to buy Qualcomm chips. The Ericsson Mobile Platforms was 'cast out of the Ericsson group' (think Adam and Eve being expelled from the garden of Eden) and ended up being part of ST Ericsson.

Basically if you want to get people in Nordic countries to work hard they need to know that they are competing on the open market and their company will be shut down if it is unprofitable. Back when Sony Ericsson only bought from EMP that was not the case.

Market impact

[Beryllium Sphere(tm)]

Before the first unit ships, it will damage the market for Windows Phone handsets due to the anticipation. It's an old move in the tech business to destroy a market with vaporware: usually, though, companies do it to destroy markets where they're not getting an income.

Re:Microsoft product design

[MightyMartian]

They were the bit player in those days. Blackberry was the big guy on the block. What reason would there have been in the last two years to sue Blackberry? It's market share has collapsed quite nicely without needing to set Apple's legal hounds on it.

Re:I guess no one remembers Kin

[Anonymous Coward]

The two phones MS made a couple years ago that sold ridiculously poorly and were pulled from the carrier (Verizon, I think) after only a few weeks. Yeah, a Microsoft phone will change everything ...and there was no way Apple could make a viable tablet after the whole Newton failure.