Windows Phone Future Now a Lot Brighter

Weeks ago when Steve Ballmer announced his impending retirement from Microsoft, I predicted that Microsoft would eventually have its own phone. Last night that basically happened as the company announced plans to buy Nokia’s phone business for $5 billion, plus Microsoft will kick in an extra $2.2 billion to gain Nokia patents.

This scribe has long suspected that such a deal was in the offing. Nokia is 100-percent committed to Windows phones. And Nokia chief Stephen Elop is a former high-ranking Microsoft exec.

Now get this. You may disagree, but Windows phones today are very, very good, especially for those already heavily invested in Microsoft software.

And now that Microsoft will own Nokia, and can control the operating system and hardware, Windows Phones will get even better.

Many think Microsoft will never have a major role in mobile phones. But look how easily Android took over for the iPhone. The fact is, phones are pretty easy to swap out. I’ve had early cell phones, and on the smartphone side, have had a few BlackBerrys, an Android and now an iPhone. Microsoft has a chance to make it big in this market. Look at how long it took for Windows and Office to take over. But they did.

Overt Move to Hardware

It didn’t take long for Microsoft to see Apple’s success in hardware, though it did take a while for Redmond to mimic Apple’s strategy, which it did with Surface. And now will do so with Nokia.

Of course, Microsoft was already experiencing a healthy dose of hardware success with Xbox and Kinect, which are kicking some incumbent Nintendo and Sony fanny.

The move toward devices was all Steve Ballmer. “This is a significant shift, both in what we do and how we see ourselves -- as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses,” Ballmer said last year. A year later Microsoft is now officially a hardware company. 

Steve Ballmer with Nokia Chief Stephen Elop

The Microsoft Phone Story

Smartphones used to be a two-man race, the closed expensive iPhone and the wildly open more affordable Android. Windows was a distant also-ran.

Microsoft is perhaps the most patient company on earth and as such stuck with Windows phones all the way up to Windows Phone 8. Where Windows Phone 7 was almost great, Windows Phone 8, according to paying customers I’ve spoken to, is awfully good. And of the three platforms, Windows appears to have the best enterprise story by far.

Microsoft has a history of releasing products that are rough at first and get better as the versions move along. Meanwhile, Apple is known for having fewer features, but having great fit and finish from the get-go.

One of the things that make new Windows phones enterprise-ready is their ready ability to hook to e-mail, especially Exchange which is enhanced through ActiveSync.

Meanwhile, Windows 8 represents a sea change for Windows. The new tablet-style interface is meant to bring commonality across the different-size hardware devices, from PC to laptop to pure tablet to phone. The idea behind the common interface is ease of use and support.

Another big enterprise factor for Windows Phone 8 is the inclusion of a free version of Office.

Up until this Nokia deal, Microsoft really only built the OS. The phone makers made all the phones. Nonetheless, with the inclusion of Office, the phones tend to be a bit bigger to support editing and some creation. They are already sort of a mini-tablet.

Apps Dearth

One of the biggest knocks on the Windows Phone is its apps library. Apple has a huge head start with its Apps Store and the free-wheeling open source Android has legions of apps. The sheer number of apps is, for most, less relevant than having the apps you really want. For Microsoft, it has Office and key integration applications. While it may not have enough apps to suit consumers, it has plenty for hard core enterprise use.

And these apps make Windows Phone 8 great for BYOD. Bring your own device (BYOD) is the new end user-driven corporate mantra. That’s part of why Windows Phone 8 has so many corporate hooks. One such hook is Office 365, which lets mobile users share and work on documents in the cloud.

Integration with Lync is another item that sets Windows Phone 8 apart as a corporate device.

Storage

With the advent of the cloud, Windows Phone 8 mixes local and SkyDrive storage. The cloud-based SkyDrive allows for sharing amongst devices and for a smaller local storage footprint.

Meanwhile, there are two browser wars, the desktop where IE still wins and smartphones and tablets where Apple and Google lay large claim. That’s because by and large mobile users use the browser the device came with.

But a bad browser can dampen sales. Fortunately IE 10, which comes with the new Windows phones, isn’t a bad browser. The future of IE now depends just as much on Windows phones as it does PCs and Surface tablets.

Bangin’ on Bing

The battle between Google and Microsoft is well known. Microsoft clearly covets the broad search space. But it also wants to integrate search into key corporate tools such as its phones.

The best way to make Bing popular is to build it into devices and services, such as IE, Surface and Windows phones. This is the same way that Safari has become popular, through bundling.

This is one more reason to own the phone platform – so you can promote Bing and bring in search ad revenue

No Skype Hype

Skype, now owned by Microsoft, is new to Windows Phone 8 and the Windows Phone installed base is a perfect way to promote Skype. Add to that integration with Lync, and Skype is now even more eminently useful.

Ovum Agrees

Research house Ovum agrees with me that there is great potential with Windows phones.

“The sale of Nokia's mobile phone business demonstrates conclusively the need for major consumer technology vendors to create ever deeper and wider offerings to consumers and ecosystem participants in terms of their device, platform and service offerings. This approach is no longer simply an option but a pre-requisite to competing successfully in this highly converged market,” said Tony Cripps, principal device analyst at Ovum. “There is also a sense that while Microsoft has many of the key elements for consumer tech market success in place too many of those elements feel not quite at parity with their rivals. That said Microsoft has some areas of definite advantage over its rivals across this vast battleground, especially in gaming (via Xbox), in consumer-business crossover services such as VoIP (Skype) and in the ease of integration of Windows Phone with its own Office 365. Moreover, we shouldn’t forget its huge global installed base of PCs, which are as much a part of the complete picture as smartphones, tablets and online services.”