How did Microsoft squander their lead (that they apparently had) in smartphones?

I always understood Microsoft’s failure to capture significant smartphone marketshare to be because they were late to the party. The iPhone came out in 2007, Android in 2008, and by the time Microsoft got their act together, those others had enough users to attract more app developers, and enough apps to attract more users - leaving Microsoft with a chicken-and-egg problem. Microsoft, I thought, had made the critical error of assuming that desktop/laptop PC’s would never be displaced as the dominant computers in our lives, and waited too long to take the smartphone market seriously.

So imagine my surprise when I saw this. Apparently, Microsoft had 42% of U.S. smartphone marketshare in 2007. Obviously that dropped precipitously as soon as the iPhone hit the market. Now, I know that those were resistive touchscreen devices (not capacitive touch) that were used with styluses, but still… Clearly they were taking the smartphone market seriously, and presumably at least had a head start on Android/Google. (Google was apparently also working on Blackberry-like devices before the iPhone showed up. cite). And it’s not as if there was already an “app gap” for Microsoft to deal with in 2007 - Apple didn’t even have an app store until iPhone 2, a year later.

So what happened? Did Microsoft suddenly lose focus on mobile? That would be pretty inexplicable given that they already appeared to be taking it seriously before the runaway success of the iPhone. Was it so impossible to leverage any of the work Microsoft had already done in the smartphone space that they had to completely start from scratch? That’s hard for me to understand - the screen and UI is only one component of the phone - I’d have thought they could at least leverage their existing wireless technology stack. Plus surely there’d be some benefit of already having established relationships with wireless carriers, manufacturers, etc.

I wasn’t sure on the forum. This is mostly a factual question - “what happened?” - but I guess any answer will be debatable.

WIN-CE. It was always a dog of an OS, as might be expected based on reading its name as a word. I had a phone with it in 2008, and didn’t miss it when my boss gave it to another guy.

You might as well ask why Palm failed.
The iPhone set the standard, and CE was never going to catch up.
A better OS, a better UI, coupled with better industrial design, coupled with better back-end support (iTunes).

All that came when they partnered with Nokia for the Lumia phones. And they’ve been playing catch-up ever since. Finland is also still moping that Apple ruined them. It’s just that they had an inferiour product.

It isn’t terribly insightful to highlight the poor performance of Windows CE, though. Early versions of iOS and Android were also pretty slow and buggy. In fact, the SymbianOS was arguably the best mobile OS available in the 2002 to 2007/8 timeframe in terms of robustness and usability.

A Google search on “Why did Windows Phone fail?” or something similar will list a bunch of recent assessments of the failure of Microsoft to capture a significant portion of the mobile market. There are a variety of options as to the specifics of the failures, but they all have a common theme, to wit:
[li]Microsoft focus on interoperability: Microsoft assumed that there would be necessary interoperability between mobile devices (phones, tablets, the now-defunct dedicated PDA) and desktop operating systems, and thus, tried to implement a common operating system with a high degree of interoperability, presumably assuming that a user would want to edit an Excel spreadsheet on his 4" phone screen. This often delayed delivery of the mobile platform while simultaneously forcing mobile-like behavior onto the desktop platform. AndroidOS and iOS have never attempted global interoperability, instead focusing on making the UI and implicit apps work with robust but limited functionality suitable to mobile applications. Much hay has been made of Apple’s disinterested in implementing Flash in iOS, but in fact, aside from the squabbles between Adobe and Apple, it actually made a lot of sense. [/li][li]Google and Apple both encouraged development of a rich market of third party applications (apps) for their devices. Although they took different approaches to their attempts to build developer communities, they didn’t really try to control app functionality or content to conform to a specific market expectation (although both companies placed certain limits on what an app could do within the operating system). Microsoft, on the other hand, assumed that its meager selection of in-house apps would suffice for most users, which were again focused on an interoperability paradigm and primarily for business users. [/li][li]Steve Ballmer infamously dismissed the iPhone as a player in the mobile market specifically because it did not have the kind of business-oriented market features that Microsoft was aiming for. Microsoft, of course, was looking at the Windows Phone as a Blackberry killer, and from that standpoint, he was correct; the iPhone was rather slow to be adopted by business customers because of the poor interoperability with Exchange server and other business-focused applications. What he missed was that most users were not interested in the phone for business applications; they wanted the very specific mobile connectivity to social media, streaming audio/video, and mobile gaming, none of which were things that the Windows Phone did or does particularly well. Android has lagged somewhat behind the iPhone in many of these areas (though it has occasionally lead in specific features) but has a loyal fan base of people who aren’t integrated into the Apple “ecosystem” and don’t want some of the baggage that comes with the iOS devices or just categorically decry Apple as an institution. Microsoft, on the other hand, just totally missed what consumers would want to do with a mobile device.[/ul][/li]
In a nutshell, Microsoft saw the need for a mobile phone and tablet, but misunderstood the market and the types of applications that users would be using. Even the newer Surface devices–which are actually pretty good tablets, arguably on par with iPads and with some features that iOS still doesn’t offer, and definitively better than AndroidOS tablets for anything beyond entertainment consumers–still lack specific apps that many users use. As with nearly everything it seems to have done in the last fifteen years, Microsoft correctly sees the need for a device or feature, but misunderstands what the user sees as necessary, desirable, or attractive. Their current push to Office 360, for instance, seems to be a reflexive response to Google Docs, but implemented with both careless esthetics and a desire to implement unnecessarily clunky functionality rather than the fairly clean minimalism of Google Docs. I think much of this comes from an attempt to extrapolate the future market from their past successes, e.g. because “everyone” uses Excel for all sorts of ridiculously inappropriate applications for which it was not designed, the future product should be some kind of online, cloud-connected Excel instead of realizing that it would make sense to have a series of much simpler applications that are focused on doing a limited subset of things well and in a manner easy for the user to understand.

Microsoft has blown it with mobile devices; even when they can produce a good device, it seems poorly adapted to the needs of the broad base of users, and until their is a massive shift in technology it seems unlikely they will regain a significant market share. It will be interesting to see how they get on with an effort to be a “cloud-focused” company; what I’ve seen so far has not been encouraging compared to companies like Google and Amazon Web Services. Microsoft would probably be best served to break itself up into smaller companies which are each focused on a specific technology; it seems like the desire to control the entire computing experience results in a sort of concept overload that doesn’t allow the company to focus on taking the best path in any one market.


Well, sure, but iPhone still left plenty of room for Android. I guess I’m wondering why Microsoft failed to leverage their position to do similar. Especially given that Google was also taken by surprise by the iPhone (see the second link in my OP).

Hmm, I guess that’s not the lesson Microsoft’s leaders took away, given that their current strategy is “Windows 10 on everything” (PCs, phones, even Xbox)

I’d say it’s because they just never expected anyone would change the game the way the iPhone did. Evidence for this is that it took Microsoft almost 4 years to deliver Windows Phone 7 after the debut of the iPhone. So as late as 2010, they were still putting out Windows Mobile 6.5 which was already a clunky remnant of the past, while Apple had several years to improve its lineup with the iPhone 4 and iOS 4. And WP7 itself was just a stopgap for WP8, since WP7 phones couldn’t be updated to WP8. That is the definition of clusterfuck.

I don’t think there was anything for Microsoft to leverage. Their software was vastly out of date, the supporting hardware was comparatively archaic, and then add to that the license fees they demanded from their partners for the privilege of selling old tech. That left a big hole for Android to enter, as Android (nimbler, little baggage, looking to prove itself, no fees) was much better at understanding that you skate to where the puck is going to be, not where it is. Compare that to BlackBerry, whose employees were so unprepared for the iPhone demo in 2007 that in company meetings afterward, they pretty much concluded Apple was lying about its abilities.

Sure. They still have the belief that “one OS to rule them all” is the correct strategy for functional interoperability. And they’re still pitching the Microsoft Surface as a business productivity device. To be fair, the Surface probably is a better general purpose productivity device than the iPad (even the Pro), but the cost and lack of applications gives it limited consumer appeal, while the iPad has penetration into a variety of markets (consumer use, kiosk/menu applications, portable data collection, navigation/mapping/GIS, et cetera).

But the core problem isn’t the operating system; despite complaints about how Win10 is not well suited (as a desktop system) it has a lot of novel and useful functionality, and the Surface 3 and 4 are objectively good devices tablets. The problem is that Microsoft believes they can tell users how they should work “the Microsoft/Surface/Azure Way”, rather than designing and marketing an advice to actual users in the way they actually want to use a mobile device. They’ve gotten away with this with Windows and Office, despite the manifest suckitude of various releases, just because of how ubiquitous these tools are; you literally cannot do work in many industries without using their particular tools, or at least not without a lot of fidgeting, even when they really aren’t the right tools to use for that job. This is hardly limited to Microsoft, of course; Apple has been guilty of this in various ways and may well fall down the same hole. It’s a result of becoming a victim of one’s own success and believing that past victories reflect future demand.


As an ex microsoftie at that time. IIRC

Microsoft never had a lead in smart phones. Blackberry was always the one to beat. I remember project codename “Jonah”, which was named after a type of small bear whose primary diet was blackberrys (or at least that was the internal storyline).

MSFT focused 100% on Blackberry and corporate users, and then outta the blue came Apple with a consumer smartphone. iPhone 1 was not a great device and HTC certainly had something “better” with swipe, cut and paste and other functions. But the iPhone v2 and v3, iTunes and the app store quickly took a commanding lead. MSFT struggled for years to come out with a consumer ready Windows Phone 7 o/s.

As a side question: I came across fake iPhone 6’s on a market here in Cambodia where I’m living now. (100$ for the 6+ version).

How does that even work? They have installed the iOS operating system on another piece of hardware? Perhaps some Android clone. But one of the advantages Apple have is that they can integrated the software so tightly with the hardware. So is the phone likely to be very good, or even work at all?

It’s almost definitely just some version of Android skinned to look like iOS. It will run as good as the hardware and software will allow, but remember that if the manufacturer is willing to deceive people into buying one, it’s a good bet they used the absolute cheapest components possible regardless of condition, capability or compatibility. I wouldn’t exactly put much trust in their quality assurance department, you know?

Palm failed partly due to mismanagement. Palm brought smartphones to market 5 or 6 years ahead of iPhone. The OS looks dated now, but was not behind its time.

As a company, Palm began to yield to Windows Mobile(CE) - and this was STILL before iPhone was launched. They gave up on their own OS and started selling devices with Windows CE on them.

A series of disastrous aquisitions, and abortive launches (of what would actually have been quite good products) was all it took for (what was left of) Palm to be scattered to the four winds. It didn’t have to be like that, or deserve to be like that - it was a corporate problem more than a technological one.
Apple smashed a few balls into the back of the net while this was all going on, and won the popularity match.

So it won’t even be able to run iPhone apps.

Right, not at all. The app icons might look like iOS app icons, but the apps themselves will probably just be stock Android apps (or whichever the manufacturer installed, but definitely not iOS apps). Basically, it’s a cheaply constructed Android phone that only superficially looks like an iPhone.

They squandered their lead by building a crappy phone.

Mrs Piper is an early adapter and got the MS phone. She sold it not long afterward because she disliked it so much.

A year later she got an iPhone and never looked back.

A former co-worker went to work as a PM for Microsoft Phone. From what I recall, part of his job (pre-Nokia) was to work with the hardware vendors to inform them of the hardware requirements for upcoming releases of the OS.

Not universally well received…

You’re actually not really correct about the Surface. When Microsoft first released its tablet, it released the Surface RT, designed to compete directly with the iPad, and the Surface Pro, which was a real PC (meaning it ran full Windows OS) in a tablet form. The Surface Pro was quite expensive (laptop pricing, and not bottom-of-the-barrel laptop pricing, either) but generally well liked, the Surface RT ran a tablet-optimized version of Windows called Windows RT. It was essentially the Windows 8 “Metro” interface with no capability to get to the “regular” Windows interface (so no normal Windows desktop, File Explorer, system tools etc.)

The Surface RT was an abysmal failure. The first generation of the Surface Pro wasn’t much better. But subsequent generations of Surface Pro have actually caught on quite well, and are actually replacing laptops for many enterprises because they are super mobile. The “app availability” really isn’t a problem anymore. From Surface 3 onward, both the base model (“Surface 3”) and the Pro model (“Surface Pro”) run full Windows 8.1. This means it in fact has essentially the largest library of applications of any operating system, because it runs the entirety of modern Windows apps, millions of .NET frame work apps, legacy Win32 API apps and etc. Since it’s Windows, you can also install Java and run all the Java apps in the world too. In Dec of 2015 The Register reported that Microsoft had attained 45% of the year’s tablet sales, versus Apple’s 17%–in fact stagnating iPad sales have been known as a problem for some time. Tablets in general, in fact–a lot of people bought a first tablet, and many still own them. The impetus to upgrade a tablet on a 2-year cycle isn’t there as it is with a phone. And the Surface line has enjoyed such strong sales primarily because they’re essentially replacing laptops.

The new Surface Book actually is a notebook, which further confuses the branding a little bit (because from Surface 3 on, with the optional keyboard case all of those Surface devices were arguably notebooks as well.)

Myself, I think the issue was that for a real long time Microsoft believed handled devices should be treated like full PCs. Windows CE essentially was an attempt to shrink a real desktop OS into small form factor devices. And while Windows CE in some ways was a phenomenal success (unless you have ever had the misfortune of writing and maintaining software for it) in “embedded systems” (devices consumers never see, or if they do it’s in the form of something like a GPS or an ATM with a custom UI that makes it so you never know the device is running Windows CE), it’s nothing but a failure as a usable OS for consumers in small form factor devices.

The people talking about some of the Windows CE devices out right before the iPhone are missing just how long term Microsoft’s failure in mobile has been. It honestly goes back to the 90s. Microsoft was pushing handheld “planners” (basically a little hand held device that you could do a few common tasks on, maintain contact lists, run a calculator, take quick notes–some of them supported email and rudimentary web browsing), long before the first BlackBerry. One edition of “Windows Mobile 2003” (a branded version of Windows CE 4.2, was “Windows Mobile 2003 for Smartphone.”

So we’re now 4 years before the iPhone is released, and Windows is already selling an edition of its software on handheld devices that can make phone calls. Most of these devices were marketed as “PDAs” (personal digital assistants" or “Pocket PCs” but many of them actually had phone calling capability as sort of a “secondary feature.” It’s weird to think that’d be a secondary feature given the concept of the devices as phones is what really made smartphones so popular (because it meant they were being sold by the cell companies to replace your existing “dumb” phone, and on a cell contract.)

I even knew some people with HP ipaqs (one of the better known Pocket PCs/PDAs of the era) who used them as their primary phone.

I think the same reason these Pocket PCs, or “early smartphones” as you could call them, never caught on, is the same reason Windows never came to dominate the smartphone market and Apple/Google did. These devices were not that great to use. They basically were using all of Window’s desktop’s UI paradigms on small devices, so it meant a stylus was the only way to even pretend to interact with the interface. This is a clunky state of affairs, while even today there are some die hard stylus user, most people do not like using them.

The first iPhone actually had less functionality and fewer features than some of these 2003 PDAs/PocketPCs, but what it did have was a smooth, responsive “dumbed down” interface that ran on a capacitive touch screen and was designed from day one to be “easy to use.” That’s what was necessary to succeed in phones–because phones are ultra mass market. Everyone from teenagers to grandma knows what a phone is and has some expectation of being able to figure it out. With the iPhone, they largely could. Not to say grandma never had to call Apple for help, or her kids, but iOS is just way more accessible than Windows Mobile of old, that required a stylus and strong familiarity with desktop Windows to use effectively.

FWIW, when Windows Phone 7 came out it was a major step in the right direction. Windows Phone 8, is honestly, a very nice mobile-first UX that I think most people would find a lot of pleasure using as their primary phone OS. The problem? By the time these were released, it was simply too late. On top of what was probably a “no win” scenario by then, Microsoft also pushed WP7 and 8 poorly. They were trying to primarily rely on hardware partners and avoid getting into the hardware business. They would’ve done a lot better to have committed to manufacturing their own phones when they released WP7. But even then I think Microsoft really was just too late in developing a mobile friendly UI to have a serious chance of “making it.”

Very good and detailed article here from Paul Thurrott:

The Windows Phones were supposed to be different. But it turned out no one liked different.

I have a Windows phone and I am happy with it (other than the crappy camera) but it does not have a lot of apps. I consider myself lucky to have a banking app for it.