What’s Wrong With Windows Phone?

By any measure of success Microsoft’s Windows Phone is a flop — so far. The bitter irony for Microsoft is, it’s a great phone. What’s going wrong?

Here are some interesting facts.

Microsoft’s Windows Phone, introduced in 2010, is a critically acclaimed mobile OS from the world’s largest software maker – a company that has a long history with mobile products. As recently as late 2009, Microsoft’s Windows Mobile platform claimed nearly 20 percent of U.S. smartphone users. But today, instead of building on that success, Microsoft has failed.

During the first three months of 2012, Microsoft’s Windows Phone platform owned a dismal 2 percent of the U.S. smartphone market, according to Nielsen ratings. Even Microsoft’s aging Windows Mobile platform had a bigger market share than Windows Phone during that time, claiming 4.1 percent of users, Nielsen reports.

Just Try it, You’ll Like it

Now here’s the part that must drive Microsoft crazy. Many of those who have tried Windows Phone 7 handsets, such as the Nokia Lumia 710 or Lumia 900, love them.

When Waterloo, Canada resident Bilal Khan found his father struggling to use an Android Samsung Galaxy SII smartphone, the younger Khan lent him his Lumia 710 instead. Khan told his father to use it for a couple hours while he went out for a workout. “When I came home two hours later, he didn’t want to give it back,” Khan said. And his father didn’t for about a week. Finally, he returned the device to his son, but only after purchasing his own Windows Phone.

Khan and his father are part of a small and devoted fan base for Windows Phone and its slick Metro UI design. Devotees note that the Windows Phone is intuitive and easy to use. Within an hour after picking it up, Khan said, his father was using advanced features such as the Nokia Play To app to connect the phone to his laptop via DLNA.

Ease of use coupled with the phone’s deep personalization and integration with Microsoft Office and Xbox Live have won over many. But adoption rates are anemic. Google’s Android platform, by comparison, had captured 12 percent of American smartphone subscribers about 18 months after its U.S. debut. As of late April, Android’s smartphone market share is nearly 51 percent in the U.S, metrics firm Comscore recently reported.

Blame the Carriers?

What’s wrong with Windows Phone? Analysts I spoke to say Microsoft’s struggles with its Windows Phone are tied to bad timing of its launch, carrier partnerships, muddled marketing messages, and a deficit of apps compared to the iOS and Android platform. The good news for Microsoft, there are plenty of indicators suggesting Microsoft’s Windows Phone platform is ready to take off.

Charlie Kindel, a former Microsoft employee who ran the Windows Phone developer experience, believes a mobile OS lives and dies with the support (or the lack thereof) of wireless carriers such as AT&T, Sprint, and Verizon.

“The most important factor is whether carriers are pushing your platform,” Kindel says. “Up until now carriers have not been selling Windows Phones.”

Carriers claim to want a third smartphone platform to offset the power of Apple and Google but often push the iPhone and Android devices before other platforms, critics say. “Carrier support for Android grew organically in response to the iPhone,” says Ross Rubin, a principal analyst with market research firm NPD Group. When first introduced the iPhone enjoyed an exclusive sales deal with AT&T. Other carriers were quick to push Android as an alternative to the iPhone, and many still do.

In 2009 and 2010 we saw Android share grow strongly first at Verizon, then Sprint and T-Mobile, Rubin says. Microsoft would introduce Windows Phone late 2010 missing the unprecedented first touchscreen-inspired smartphone consumer push by nearly two years.

Today there is evidence that carriers are warming to Windows Phones. Verizon CFO Fran Shammo recently hinted the company wants this year to support Windows Phone in the same way it supported Android’s rise several years ago. If Verizon follows that path it will put its commercial muscle behind Windows Phone with widespread advertising, in-store marketing, and retail sales people recommending Microsoft-powered smartphones to customers — just as it did with Android.

Next: The OS is Not the Problem

The OS is Not the Problem

Ask Windows Phone users why they favor Microsoft’s platform and they point to the refreshing Metro UI that goes beyond the typical grid of icons on Android and iOS. Instead, Windows Phone focuses on large tile icons that display Facebook and Twitter updates, weather, and e-mail at a glance.

“It’s not the same boring interface…[Windows Phone] is completely new and fresh and it still makes me smile every time I use it,” says David Erwin, a passionate Windows Phone user based in San Diego, California. “My phone feels like an extension of me,” Erwin says. “It’s the most personal thing I have ever owned.”

“It’s very easy to set up and use, super fast, and Window Phone seems to have all the apps I need for my personal and professional needs,” David Kirkdorffer, a Boston-based marketing executive and Windows Phone fan said via e-mail.

But maybe that refreshing and easy-to-use interface is part of the problem. Windows Phone is a big change from the typical icon grids on Android or iOS — even basic feature phones use a grid of icons to display apps. The problem is people generally don’t like change, at least at first.

“I think the challenge is to get someone to try something that’s completely different,” says Juuso Myllyrinne, a former digital marketing manager for Nokia. From a marketing standpoint, Myllyrinne says, AT&T is the company doing the best job of grappling with this dilemma.

“AT&T is trying to communicate this new type of experience. They are talking about the live tiles, the experience of actually using it,” Myllyrinne says. AT&T commercials, for example, tend to show people navigating the Metro user interface with ease and using the phone to access Microsoft Office, or the People Hub that integrates your contacts and social networking activity into one spot on your phone. Microsoft meanwhile, is focusing on speed with its Smoked by Windows Phone campaign, while Nokia is making an aggressive play against Android.

The App Gap

Another issue: the all-important question of apps. Microsoft’s Windows Phone Marketplace has more than 85,000 apps, a fraction of the hundreds of thousands of choices for Android and iOS. But it’s not all about numbers. For every hit like Angry Birds in the iOS App Store or Google Play, the selection includes dozens of low-quality apps offering nothing more than fart sounds, device wallpapers, or photos of scantily clad women.

But even when you cut out all the fluff in competing app stores, the Windows Phone Marketplace still comes up short, according to critics and users. During Windows Phone’s early days in 2010, Khan says he could get many of the popular apps that Android users also had such as Facebook and Netflix. “Now, Android has many more mainstream official apps than Windows Phone,” Khan says.

“[Microsoft] has has been doing a good job growing the catalog, but there are still some big holes,” adds NPD’s Rubin, who points to Pandora Internet radio as a service missing from Windows Phone. Other users complain of missing apps from Chase Bank or popular streaming services such as HBO Go.

To overcome the app gap, Nokia is tackling the matter directly. Microsoft’s closest smartphone partner in early May announced a number of apps exclusive to Nokia Windows Phone devices for a limited time, among them ESPN, Groupon, and AOL Entertainment. Critics argue that Nokia’s efforts might help the company but could lead to fragmentation with manufacturers laying claim to a variety of exclusive Windows Phone apps. Nokia’s Slater disagrees, arguing the company’s exclusive apps aren’t about fragmentation but adding value for Nokia users. “We are absolutely not fragmenting for our consumers,” Slater says.

For its part, Microsoft says it is adding roughly 300 new app titles to the Marketplace every day.

Next: The Future

The Future

As Microsoft and its partners try to win smartphone users, the company is reportedly hard at work on Windows Phone 8, the next version of the smartphone platform. Codenamed “Apollo,” Windows Phone 8 is expected to have deep integration with the similarly named Windows 8, the next version of Microsoft’s PC operating system for tablets and PCs. Deeper integration with PCs and other home devices could encourage more people to give Windows Phone a try, enticed by expected features such as wireless data transfer and enhanced SkyDrive features.

However, persistent rumors suggest that Apollo will not run on current Windows Phone hardware. Microsoft will not comment on future versions of Windows Phone, but if the speculation is accurate, that incompatibility could hurt Microsoft’s short term gains by upsetting users who may feel stuck with a Windows Phone 7. Developers could also be frustrated if they have to rewrite their apps, although most Windows Phone 7 apps may run as legacy software under the new system. Microsoft may answer some of these questions during a Windows Phone event in San Francisco on June 20.

As for Windows 8, the new touch-friendly OS (expected in October) could also help Windows Phone since it will introduce a similar Metro-style interface to users. “I think it will be additive,” says Kindel of Windows 8. “I don’t think it’s going to be the thing that tilts the scales, but it is definitely going to have a positive impact.”

Myllyrinne expresses similar sentiments. “Once [the Metro UI] becomes the norm [on PCs] it might be easier for people to adopt that sort of logic on phones as well.”

In the meantime, Greg Sullivan, Microsoft’s senior product manager for Windows Phone, says to expect more from the software maker in the coming months. “We’ve been in the market with Windows Phone for about a year and a half,” Sullivan said via e-mail. “And have seen great response to our new approach, and we’re really just getting started.”

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