One area Huawei is unlikely to return to, unless the market changes: Windows Phone.
Huawei produced two models running Microsoft’s smartphone OS before it said it was putting its plans for future Windows Phones on hold.
“We didn’t make any money in Windows Phone,” Kelly said. “Nobody made any money in Windows Phone.”
Of course nobody is making any money with Windows Phone. Why do you think Microsoft had to rescue the failing smartphone business from Nokia?
This doesn’t surprise me in the slightest. In fact it baffles me why Microsoft continue to cling to their failed mobile strategy and why they’ve been at it for so long.
Look at it from Microsoft’s perspective. If they let go, then they’ve lost the mobile market, which is the only sector that’s currently booming, and become irrelevant. Thirty-plus years of dominance comes to an end, which has got to be scary from Microsoft’s perspective.
And yeah, there’s the desktop and server markets, but Linux competes in the latter very effectively, and with more tech-savvy consumers pushing for adoption of what they use at home at work, the former is also at risk. They have to keep at it, on the off-chance one of the other players makes a mistake and they can grab a chunk of the market.
News flash! They are ALREADY irrelevant in the consumer space. I, and millions of others, are HAPPILY living in a post-Microsoft era…at home at least. Microsoft continues to rake in cash, NOT because of Windows Phone, Windows 8, Surface, Xbox, or Bing…or even Azure…but because they have a lock on the BUSINESS market with MS Office and Windows. Even that is under threat right now with viable alternatives getting better by the DAY! In a few years, there won’t be this compulsion to automatically choose MS products and services in the business world…and when that happens, they are DONE. Just watch. It happened to IBM, it will happen to MS.
Add to that threats in consoles market as well as in the office suites, and it’s apparent that MS is actually burning form all sides.
For the most part, It seems like they already have.
Easy: Mobile is growing, desktop is shrinking, laptops are stagnant.
The long-term health of the company requires them to have a significant presence in the mobile market.
They still earn gobs and gobs of money from Windows, so they can afford abysmal sales for several years to come.
If so, they’re doomed.
They’ve been trying the “Spend more money for less market share” strategy for quite a few years now. Where does it end?
Edited 2014-12-02 01:33 UTC
As long as they can keep extorting patent money from Android vendors, they can continue subsidicing the whole WP fiasco without much impact on their books.
Basically they’re keeping Bing and WP as loss leaders to keep Google in check.
It’s also part of their culture, Microsoft likes to control the whole stack from the OS all the way to the customer facing App. It was what gave them their hey day, and like everything it will end up being their undoing as leader.
Windows Phone falls under the Windows and Servers division, which makes it a little difficult to find out how much WP is losing, since much of the development also ends up on the desktop and on the server.
Money from Android royalties, however, are applied to the Devices and Studios division. They are used to cover X-Box losses.
Everybody has been predicting the fall of Microsoft for a while, and predicting what the reason will be. Their growth still shows no sign of stopping. Certainly, offering a well-integrated top-to-bottom platform won’t be the reason for their demise.
Uhm, yes, if they spend more money than they take in on those platforms, they very well could be the cause of their demise. I don’t understand this “they need to be in the mobile market” BS. They suck at it and are losing money hand over fist, with no sign of gaining market share or mindshare. The practical thing would be to either change directions with their mobile strategy, or leave the market altogether and just settle for the Android royalties. The royalties are all upside.
It would send a bad signal for their investors, and their competitors, if MS were to leave their mobile ecosystem altogether and become just a provider of apps.
You did not read all that I wrote, before you going into automatic narrative mode. I did not say MS is going out of business. I’m simply stating that they are no longer in the lead position in the industry, which is true since they have not been the most capitalized corporation in the tech field for a while. That is a big change for them.
And what has worked for them in the past, full control of the SW stack from OS to end user app, is no longer working in the sector with the biggest growth rate; mobile. As WP is clearly showing.
Presumably when they stop making so much money? Which should be any day now, since they’re apparently doomed according to you.
Well, kind of like Sears/Kmart. They’ve been doomed for decades, but they were so big it takes them forever to fall and run out of cash and people willing to give them cash.
I’m also calling out IBM as doomed too. Soon they’ll be as relevant to IT as Burroughs.
Sears/Kmart was doomed because their core business – retail – changed dramatically with the advent Internet, and they were too slow to adapt.
Meanwhile, the CEO of the company is utter crap, and is using a management strategy inspired by Ayn Rand where the various divisions within the company operate without a singular strategy, and often at the expense of other divisions.
For example, Brand Central (Which sells appliances) can make more money by selling other brands than they can selling Sears’ own Kenmore brand, even though selling Kenmore helps the company more as a whole. So now, much more floor space is devoted to non-Kenmore brands, helping BC but hurting Sears. They are the retail company that spends the least amount of money per square foot of retail space, compared to their competitors, and by a significant margin. These are clear signs of a coming demise that have been visible since the merger with KMart.
This isn’t the case with Microsoft, which still has rising revenue and (mostly) rising profit. They are still making money hand-over-fist, and are definitely still seeing growth overall. Saydella is organizing the company where divisions no-longer are competing with each other. Their overall strategy is still strong.
They faltered on Mobile, but since Windows, Server, and Office are doing so well, they can weather it. Their mobile strategy is fine – it’s their timing that sucked, and is the reason for their lack of success.
IMHO, Sears and Kmart were doomed since walmart came on the national scene in the early 90’s.
Microsoft’s “timing” sucked. That’s kind of a nice way of saying that they did a terrible job all around.
Edited 2014-12-02 22:33 UTC
The timing part is what matters. The core software and hardware available on the Windows phone platform is excellent and on par with offerings from Apple or Google. Their problem is that they screwed around for too long and let iOS and Android become the twin giants of the mobile space. By the time Windows Phone 7 was released, iOS 4 was already out in the marketplace and Gingerbread came out within two months. Windows phones are good, but not good enough to pry away people that have already acclimated themselves to iOS and Android and have bought into the iTunes and Play Store ecosystems.
Tell that to Lotus 123, Oracle, IBM with OS/2 and a number of other competitors that were way ahead of Microsoft in their respective areas. Things can change radically in technology in short order.
I remember when apple was doomed…
To be fair, they were doomed; it took extraordinary intervention to turn them around.
Yeah, Apple was doooomed. It was indeed a series of miracles that saved them ( Bringing Jobs back, a Microsoft investment, a great selling, terribly cute computer that came standard with the worse mouse ever) .
When did I say that? I think Microsoft are stupid and wasting money on a mobile strategy that clearly isn’t working. I don’t think they’re doomed; did you actually read the post you responded to?
Perhaps instead they could concentrate on markets where they actually make money and are, you know, actually good at.
I’m making some money out of Windows Phone. Not much, but surely they covered the investments of buying Win 8 Pro for development platform, a cheap (HTC 8S) device for testing and the time needed to port the code (which is platform independent by 85%).
That might not sound like much, until you calculate in the YOY growth.
While the company is nominally growing and making more profits, it’s internally stagnating and has been for some time. The development of their core tools and libraries is awfully slow.
I was surprised that their C++11 support is so behind. They have 1-2 people, and all they do is QA what they license from dinkumware. GCC and clang both expend more effort here. And the compiler (cl) is even slower to gain new features. And their linker is still stuck in the 1980s with lots of 16-bit limitations; this is the most annoying of the lot–valid C++ code can easily break by exceeding the 2^16 symbol limit. No workaround. No problems at all with ELF/Mach-O. Update it already!
Last week, we had the story of the Windows GUI toolkit stuff (XAML) being basically in maintenance mode, with only a handful of bugfixes planned, and no roadmap for the future. The default toolkit for desktop UIs since Vista! In a company the size of the Microsoft, this is quite surprising. What are all their programmers actually doing if their core stuff is left to rot? It’s not like they can’t afford to have large dedicated teams for each of these separate components. So what are they spending their time on?
What we see is they develop the new shiny replacement for something, and then abandon it shortly after for a new new shiny replacement. All just churn for no gain, and in lots of cases not being adequate compared with what’s replaced. Who could commit to developing against these things? I think even die hard MS developers are realising how unreasonable this is, and how costly it is for their businesses.
As someone who is forced to write cross-platform C++ code, I’d really like it if they dropped cl for clang for example. If cl is as crusty and unmaintainable as it appears, it would make our lives much better if we could use a decent compiler.
C++ is dead man. C# and VB.NET is the current technology. That is why C++ does not get the love on Windows…all the hot Windows dev is going on with C#. The continuation of .NET is the current backbone for dev app on Windows. Your judging “static” with one product? The tablets and Metro programming came really quickly…
Edited 2014-12-04 00:55 UTC
]
You’ve never written a line of cross-platform code in your life, have you?
The problem isn’t restricted to C++ though. XAML is used by several languages; its lack of maintenance affects them all.
Microsoft just don’t seem to “get” long-term incremental maintenance for many of its components. They are developed, then basically abandoned. Even for really high-profile pieces. Their culture of making “big” releases once every few years is probably at least partially responsible.
huawei only has a presence in China where Windows Phone is pretty much non-existent. It’s little wonder they made no money. Their decision to try selling Windows Phone on high end phones into a market that doesn’t use it is what’s strange.
I’d like to know how this guy knows the revenue and profit margins of his competitors. Sounds like he’s just trying to save face.
Not really true. Sure, they’re not one of the big names like Samsung, but they’re certainly not China-only… they’re currently more of a low-end brand, but lately they seem to be doing as much TV advertising as either Samsung or Apple…
Well, this comes as no surprise to someone who has watched the progress of the platform for some time now. China has decided it doesn’t like MS anymore (unless you see raiding offices as an act of friendship) and from many reviews on their devices, it seems that Huawei didn’t try hard enough to produce an appealing WP device… Therefore, while we all agree on the fact that WP has been in no way successful, Mr. Kelly was probably trying to mask his company failures in this sense, too. Once MS started to grant free licensing of Windows to devices under 9′ screen size, about two-dozens-and-a-half new manufacturers entered the WP market, and AFAIK no one is Chinese. That’s a bit strange…
[On a side note: after having known about this news bit from another source first, I deemed it as not much relevant/interesting (just as many others that usually pop up every day against this or that product and/or company, in any case) and figured out it would not have been listed among OSAlert’ most recent entries – up to now, I always thought OSAlert was a bit more selective. However, this one was strangely highlighted.
Sometimes I wonder if Mr. Holwerda has some undisclosed agreement with the, say, Google PR department… And I miss the days when this site was actually a decent, less-biased, better-focused read for OS enthusiasts like me.]
I use a Windows Phone and the worst thing about the platform is the lack of apps. The truth is that Microsoft came to the modern smartphone OS party late and screwed up getting to this point along the way.
They not only broke compatibility from previous Windows Mobile versions with Windows Phone 7, but then provided no end-user upgrade path with Windows Phone 8 and also some broken compatibility with apps in that upgrade as well. Windows Phone 8.1 brought them much closer feature wise and back-end wise to Apple and Google, but they are still behind.
If they can finally get it right with Windows 10, then they will at least have a platform that can be on equal footing. Universal Apps shared with Windows 10 Desktop and XBox One should help their lack of apps in the long run by making development costs less expensive. The problem is that equal footing at this point isn’t enough. If Microsoft wants better marketshare, then they need something that Windows 10 Phone will do better than Android or iOS.
I think that Microsoft should aggressively go after the Enterprise market and then make their XBox brand consumer apps fully cross-platform and cloud-based as much as possible. Microsoft should be able to easily own the market that Blackberry used to (and still does to an extent) and that Samsung is going after with KNOX.
Microsoft has the pieces to make it work but execution has been off to say the least.
I don’t know why anyone outside of Microsoft would make a Windows Phone at this point. I would wait until Microsoft gets it right and starts increasing marketshare and profits (if it ever does) and then get back into selling Windows Phones.
In a few European countries there are more WP users than iOS ones.
Microsoft is not burning folks. They are growing, have great revenue, and they have a CEO that is righting the past mistakes. Even if you talk about how bad Windows Phone market share is, the total strategy is starting to work…and that strategy is hedging all bets by moving Microsoft’s online services and application suites to all platforms. I suspect that hardware offerings are taking time to re-organize after the Nokia acquisition, and that it will take time at least well into 2015 before new hardware models roll out. Everyone knows Microsoft has an uphill battle with WP, but I don’t think it matters at this point because they are poised to dominate in online services and mobile apps no matter what direction WP goes. I have an awful feeling though that this strategy of low end WP phone hardware will work in slowly increasing market share as there is a large market of people that really buy phones, and don’t care much about the OS as long as they can talk or text on it. Just lately, making WP free for manufacturers, introducing Windows 10 in 2015, and bringing together the application model for desktop Windows to the phone and tablet devices should make a compelling case to develop write-once apps that run on the phone and the desktop. And if you write that app in Visual Studio, you will be able to also port and simulate this app in Android and iOS from the same dev environment…pretty compelling.
Everyone keeps saying that Android is unstoppable and that WP will never catch up in market share…WP won’t surpass Android but…all it took was Apple to come out with a phone that had a decent screen size and month later you are reading how the Galaxy S5 sales have taken a nose-dive. The only reason why Android has so much market share is because it was the only game in town for all other manufactures besides Apple. It’s not like Android was that great out of the gate…battery life was horrible and resource management was non-existent. Apple steps up, resolves the biggest complaint against iPhone and now Samsung is “going back to the drawing board” for the S6. Customers have been telling Samsung for years that their plastic phones are shit and that they need to make a phone that had iPhone like construction but they didn’t get serious…Samsung was probably stamping those cases out as fast as the presses could mold them…customers just didn’t want to leave the Galaxy because of screen size. Now that the 6 plus is available, you can have a system that has all of the apps with the Apple metal construction and prestige.
There are some good WP models out there like the Nokia 1520, but right now all of the high end WP have either been limited to certain carriers or have been discontinued due to lack of interest in the emerging platform. If you can find the apps that you need, the current WP platform on something like a Nokia 925 is still excellent with WP8.1 and has better battery life and construction than the majority of Android phones. All MS has to do is make a decent array of WP models that are not limited to specific carriers, load Windows 10 on there, load Xbox games on the phone, Office, Microsoft’s online services and pile on the Windows 10 developer extensions and the thing will move. A phone like this would appeal to gamers, enterprise and power users. A unified product line of MS phones with this software stack and features that the Nokias already enjoy like bigger batteries, better cameras, wireless charging offered at a more reasonable price than an iPhone6 or 6 Plus will make it a winner. A good 5″ Lumia with Pureview camera and high end SnapDragon processor would rectify a ton of problems. (and please keep on that dedicated camera button MS, I like it).
The Chinese don’t care about WP because up until recently it was not free; the Chinese government is mad at MS because they won’t support XP after 14 years even though the majority of installs are pirated. If it’s not free software and not pirate-able, Chinese won’t use it, so why focus on customers that don’t care about protecting IP or paying for software?
Things can turn around in business. Microsoft Surface was DOA also, and now the Surface 3 is getting some traction and it’s really an excellent product that is stealing even Apple customers. Apple not moving into touch based laptops is going to hurt sales for MacBooks. My father-in-law who is a died-in-the-wool Apple fan shocked me when he upgraded to a Surface 3 last week just because of the touch screen.
Edited 2014-12-03 03:36 UTC
Well said.
Microsoft just reported a 25% increase in revenues YoY… yes, it is definitely sinking
Microsoft is still raising their charges to customers.
That can’t continue.
Oh, what about IDC forecasting a 67.3% growth (YoY) for Windows tablets in a almost-stagnant market ?
I don’t see that link posted, I mean for fairness