Microsoft Mobile Business to Concentrate on Business Hardware, Value Phones & Flagship Devices

Lumia series of Windows Phone which was Nokia’s Brainchild owns 97% of Windows Phone segment. Even though Microsoft been trying to being as many OEM possible into this segment, none of them have built so many phones like they did for Android segment. Windows Phone needs more devices, but they need not to be all from Microsoft, because they aren’t Nokia trying to prove to Microsoft that they can build some solid phones.

Sathya Nadella’s Letter this morning was very clear about Microsoft’s Phone business and how he wants it to grow:

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

He is very clear that unless more OEM’s start building Windows Phone / Windows Mobile, it will not be easy to survive. There are tons of Lumia’s, and even then its failing to fill in the number of phones compared to Android, because its only from one OEM.  Even Android has tons of phones, overlapping on price point, but then there are lot of OEM investing and competing with each other. Sathya is pointing to that ecosystem.

Microsoft’s Mobile Strategy going Forward:

“In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software.”

Nadella clearly segmented three areas in which Microsoft will build Windows Mobile:

1. Business hardware: This only means one thing. Microsoft wants to make their presence strong in enterprise. Something like Blackberry. Now since Windows 10 is a universal platform, Microsoft is already into enterprise, they want to harness this.
2. Value phone buyers: This section forms the major part of business if not the most profitable. Budget phones are here to stay.
3. Flagship devices: This is something Microsoft have failed to concentrate. Markets like US and UK have huge demand for Flagship device and Windows Phone is not doing that well in this segment.

That said, its clear that Microsoft is not duping Windows Phone, but they are trying to get their strategy right now. Sounds good, and we have 2015 to see the result.  Lets hope for the best.