Microsoft bets on Windows Phone 8 to regain foothold in smartphone market
On Monday in San Francisco, Microsoft has the launch event for Windows Phone 8, the latest version of the company's 2-year-old smartphone platform. It's Microsoft's newest attempt to regain a foothold in the smartphone market — something it's struggled mightily to do, with a worldwide market share that falls below 4 percent.
Seattle Times technology reporter
Microsoft has been launching new products on a fast-and-furious schedule in recent days: Windows 8, Surface, Xbox Music and SmartGlass.
It's not over yet.
On Monday in San Francisco, Microsoft has the launch event for Windows Phone 8, the latest version of the company's 2-year-old smartphone platform.
It's Microsoft's newest attempt to regain a foothold in the smartphone market — something it's struggled mightily to do, with a worldwide market share that falls below 4 percent.
It's also another big step in Microsoft's creation of an entire devices-and-services ecosystem.
"Within a few days of each other, Microsoft is launching a new tablet platform, a new PC platform, a new phone platform," said Michael Gartenberg, an analyst with research firm Gartner. "We're hearing, almost for the first time, how Windows Phone is part of that Microsoft ecosystem."
In that ecosystem, devices are designed to work well with each other, with the devices — a Windows Phone 8 handset, say — connecting the user to a whole host of Microsoft services, from Office to SkyDrive to Xbox.
But promoting the ecosystem concept is only part of what Microsoft needs to do to gain market share for its smartphone platform, analysts say.
It also needs to get the message across to consumers about what makes the phones different and better; have more carriers on board; get the carriers to promote the phones; and get down to details in training carriers' and retail store staff about the platform's features.
"This is going to be a question of not only broad brush strokes but also fine ones and how well Microsoft and its partners can execute," said Gartenberg.
It's not as though those points are unknown to Microsoft and its partners.
Back in April, when Nokia launched the Lumia 800, the then-flagship Windows Phone, Microsoft and AT&T promised a big promotional push.
But market share is still low. Microsoft's smartphone platforms (which include both Windows Phone and the outdated Windows Mobile) dipped to 3.6 percent of U.S. smartphone subscribers for the three months ended in August, according to research firm comScore.
Worldwide, Microsoft's smartphone platforms gained year over year, but its share is still minuscule, ranging from about 2.7 to 3.5 percent for the second quarter, according to various research firms' estimates.
How to succeed
So what's kept Windows Phone from making a dent in the iPhone and Android platforms' leads, and can Microsoft avoid that fate with Windows Phone 8?
Gartenberg, the Gartner analyst, thinks that with the previous versions of Windows Phone, "Microsoft was telling the story of why they were different, not why they were better. That's their challenge this time around."
An advantage, he said, is Microsoft has two strong partners now with Nokia and HTC, both of which have announced high-end Windows Phone 8 devices — the Nokia Lumia 920 and the HTC Windows Phone 8X. (Samsung has also announced the Ativ S Windows Phone 8 handset.)
Another advantage: "It's riding the Windows 8 launch," Gartenberg said.
Will Stofega, an analyst with research firm IDC, said the first version of Windows Phone was a placeholder: "It was about getting something out there, putting a stake in the ground."
Now, Microsoft and its partners must convey to consumers how their new phones are different and better — whether that means Nokia's navigation, camera and wireless-charging features, or Windows Phones' integration with applications people use regularly at work, such as Office and Outlook.
"The overall vision is to say this isn't a world where you need to carry 17 different devices," Stofega said. "Here's something you can take on the road, but one that gives you a link into all the different devices and the applications that run on all those devices, whether Windows PC or tablet. And that fits into both the business and the consumer world."
More business friendly
Windows Phone 8 also has features that make it more business friendly than previous versions — and that's something that Microsoft should emphasize, Stofega said.
Though Microsoft's strategy has been to go after the consumer market, "maybe they could do a little more to get the enterprise [big business] market excited," Stofega said.
Sarah Rotman Epps, an analyst with research firm Forrester, believes one of the reasons Windows Phone hasn't gained traction is Verizon hasn't supported the platform much in the past.
(Verizon has said that this fall, it will carry several Windows Phone 8 devices, including the HTC 8X.)
"All four large U.S. carriers, especially Verizon, would need to carry the top Lumia, Samsung and HTC Windows Phones and promote them above Android and iPhone" for Windows Phone to start gaining significant market share, Epps said.
It's also hard to break through the momentum iOS and Android have established.
"Both platforms have many more apps than Windows Phone, and many more users," Epps said. "Consumers are likely to gravitate to the platforms their friends are on. If they don't know anyone on Windows Phone, they aren't likely to buy one, and the negative cycle continues."
The bottom line, she said, is "Windows Phones are good products, but so are iPhones and the top Android phones. Unless carriers push Windows Phone above the others — and I don't see evidence of that — Microsoft's market share will stay in the single digits."
Microsoft definitely has to raise its share of the market in smartphones and tablets, if it is to remain relevant in a world where mobile devices are rapidly becoming the personal computing machines of choice.
"I think Microsoft is looking at these [tablet and phone] efforts and saying: 'Failure is not an option. These have to succeed,' " said Gartenberg.
"But success for Microsoft doesn't mean it has to dominate the market," he said. "They don't have to dominate mobile like they did in desktop. They just need to stay relevant, stay in the conversation."
Janet I. Tu: 206-464-2272 or firstname.lastname@example.org. On Twitter @janettu.