OS Wars: 2016

MSFT is at a crossroads.  Windows Phone market share remains insignificant.  At the time of the Nokia acquisition, the company believed it could sway developers over to the WP camp en masse once the company & OS gained some momentum.  This, in theory, was attainable by attacking in the lower price tiers—not head-to-head with iPhone & Galaxy & other flagships (it has been almost 2 years since there was a global flagship).

The problem with this game plan was the market shifted—flagship volumes exploded and extreme cost erosion came to the entry tier.  Market share has barely moved, wooing the developer community never happened, and the app gap was never improved.  Carriers who were over-indexing marketing spend to encourage a “3rd ecosystem”, basically gave up and no longer worried about a two OS world.

So, now what?  MSFT is expecting big things with the introduction of Continuum—the ability of plugging your phone into an external display via a display dock.  This is not an immediate game changer as, 1) To date, there are limited apps available, 2) The concept is less portable than a tablet, 3) What are user’s appetite for spending $100 on the dock?

Second page of the playbook is about attacking the app gap.  MSFT is hoping the ‘universal apps’ game plan will entice developers.  This is, build one app and it will work across PC, tablet, and phone.  In theory, it is the world’s largest installed base.  However, even within MSFT this game plan is not fully supported.  Some, including former CEO Steve Ballmer, believe the company needs to go further.  The app gap is so large, the platform must open and simply allow Android (or Android AND iOS) apps to work across MSFT hardware.  Daunting task, to say the least.

2016 will be a pivotal year.  MSFT again has a flagship (950, 950XL) in the market, which has received solid reviews, but not enough to change the viability of WP.  Recently, Uber launched an updated app first to the Windows platform.  To change the game, MSFT will need many, many more developers to be thinking Windows Phone first.  To do this will cost money.  A lot of money.  The question for 2016 is, does MSFT have the confidence to pay for this shift in thinking?

 

Windows Phone vs Android vs iOS