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‘Softies Surrender Smartphone Sales

April 18th, 2013 - 9:01 am

It’s a race to the bottom between Microsoft and… I dunno… HTC? Read:

Microsoft recognizes that the cost of creating a premium handset to compete at the high-end of the smartphone market against Apple’s iPhone and the Samsung Galaxy S3 is an enormously expensive and risky proposition.

“Making that ‘hero’ smartphone isn’t necessarily the best use of Microsoft’s resources and time,” said IDC analyst Kevin Restivo. “The race (in the smartphone market) is to the bottom.”

So instead, the company is looking to gain ground in emerging markets. In those markets, the smartphone business is particularly price sensitive.

Windows Phone will compete only in the bottom of the market, because Apple and Samsung have the top (and the middle) all sewn up.

There’s just one problem. Android is free for manufacturers to use, and easily customized or even forked to provide unique user experience. Windows Phone isn’t free, and must conform to Microsoft’s OEM guidelines.

So who is going to spend extra money for Windows Phone licenses to put on near-zero margin phones?

Train wreck ahead. Another one, I mean. Yesterday we talked about how Microsoft had no real strategy for mobile, and this is just one more sign of it. How are they going to build an ecosystem to help sell pricy tablets in the US, if they’re giving up the top end of the smartphone market? Nokia has shown how not to build and sell a top-end WP8 phone, and they’re Microsoft’s last remaining OEM with any real devotion to the OS.

The company isn’t going broke any time soon, but it looks increasingly likely that they’ll become yet another services company (like IBM, or like Dell is trying to become) devoted to the back of the office.

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It's actually getting worse for Microsoft on the very back office sector they rely on. The firm for which I work writes code that allows for the tracking of items in warehouses, or what have you. Typically, the handhelds were barcode scanners or guns, symbol technologies type stuff, using Windows Mobile as its OS of choice. Increasingly, companies want the software deployed on iPhones and less frequently Android phones allowing the capture of the barcode via the camera and eliminating the hardware cost of the barcode scanner. As an added benefit, those phones don't need the infrastructure to enable connectivity (how many wireless routers does it take to blanket a 50,000 sqft Warehouse? More than the number of licks to get to the center of a tootsie pop, that's for sure) to the devices.
1 year ago
1 year ago Link To Comment
That last high end Nokia phone? Would have made a nice Android smartphone.

Just sayyin'.
1 year ago
1 year ago Link To Comment
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