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The selection process for the market's third operator was a spectacle to behold
Microsoft’s announcement that it’s winding down its mobile phone hardware business – which translates to 7,800 pink slips and a $7.6 billion write-off – is probably one of the sadder moments not only in Microsoft’s history, but the history of mobile phones.
It’s bad enough that Microsoft – whose Windows OS once ruled the planet –utterly failed to translate its PC success into the mobile phone space. But it also gets to go down in history as the company that took one of the strongest pre-iPhone handset brands on Earth and basically killed it.
That’s not fair to Microsoft, I know. It’s easy to be an armchair critic in hindsight, and the smartphone business is a tough business, especially if you’re not Apple or Samsung (and at the moment, even being Samsung isn’t that much of an advantage).
And it’s worth remembering that Nokia had its own problems by the time the company threw in its lot with Microsoft, having lost momentum in the wake of the smartphone revolution. That in itself is remarkable when you remember that Nokia not only made great feature phones in its heyday, but was also ahead of the game on a visionary level.
When Nokia launched the first of its N-Series phones in 2005 (two full years ahead of the first iPhone), it tried to brand them as “mobile personal computers”. The term didn’t catch on, but it demonstrated how clearly Nokia understood where the future of the mobile phone industry lay, and the central role handsets would play as connected personal devices.
And yet, for a variety of reasons, they failed to capitalize on that vision. As advanced as the early N-series phones were, in retrospect they seem clunky compared to the first iPhone. In that respect, you can’t even say they were at least in the same ballpark as other smartphone makers. It was more a case of Nokia knowing where the ballpark was, telling everyone else where it was, and managing to make it as far as the parking lot, only to get sidetracked at the tailgate party to the point that they actually missed the start of the game.
All of which is why when Microsoft bought Nokia’s handset business, some industry observers at the time were skeptical. If you have one company that missed the smartphone train and another company whose mobile OS strategy simply wasn’t sparking, putting them together didn’t exactly sound like a recipe for success.
And of course it wasn’t. Maybe it could have been with the right strategy – it’s not as if the Lumia phones were terrible. And in any case, many analysts noted at the time that both companies had little to lose by trying.
They tried. They failed. Epically. And now Nokia is done as a handset brand, and ultimately Microsoft gets the credit/blame for that.
Mind you, that doesn’t necessarily spell the end of Microsoft’s mobile device ambitions. While Microsoft hasn’t given details of its restructuring plan, Bloomberg reports that Microsoft will still make Lumia phones, but will only release one or two a year.
However, David Pierce at Wired observes that as things stand now, Microsoft’s Windows 10 strategy seems rooted in the idea that as we evolve to the Internet of Things, smartphones will be marginalized anyway. That may be a mistake, he writes:
… Microsoft sees many more, equally disruptive revolutions upon us. The company is also focused on the Internet of Things, augmented reality, cloud processing, and virtual assistants. Those things are the future after phones, and Microsoft is positioning itself well in all of those places.
Unless, of course, your phone isn’t about to go away, but is instead about to become the centerpiece of everything—the remote for your lights and coffeepot, the engine for your virtual reality experiences, and the microphone in your pocket you use to talk to your assistant. That looks more and more like the future that’s just around the corner. And that’s a future without much room for Microsoft.
Fair point, although I’m not sure that Microsoft’s success in cloud-driven IoT depends primarily on having a smartphone. By some accounts, Satya Nadella has known for some time that the Ballmer/Elop mobile strategy was a dud, and even before this week’s announcement has been taking steps to push Microsoft in a better strategic direction.
Anyway, it’s all speculation at this point until Nadella offers more details, but – as with the Nokia acquisition – Microsoft has a lot to prove. Whatever Nadella has mind, it had better be good.
More commentary here, in which Ars Technica predicts Nadella has doomed Microsoft to a future of desktop obscurity.
See also: Caroline Gabriel’s comments at Rethink Research that Nadella wasn’t “brave enough” for a complete mobile exit.