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Tuesday, October 30, 2012

[Op-Ed]Windows Phone 8 is D.O.A. due to puzzling choices by Microsoft and Nokia

Microsoft officially released Windows Phone 8 (WP8) yesterday at an event in San Francisco.  When it was originally announced way back on June 20th I thought it held a lot of promise.  The newer software supported multi-core processors, higher resolution screens, and maintained the speediness associated with the "modern UI" (or the artist formerly known as Metro for anyone outside of Microsoft).  Carriers were vocal about backing WP8 even though many of them had barely supported Windows Phone 7 (WP7).  It sounded like all the pieces were in place for a strong WP8 launch and Microsoft seemed to have an excellent chance of solidifying the third place position in the smart phone OS war behind Android and iOS.

While WP7 never exceeded 5% market share in the United States, I thought WP8 might make it to the high single digit/low double digit range.  As it finally launches more than four months after it was announced however, some puzzling decisions from Microsoft and Nokia have already condemned Windows Phone 8 to a slow, painful death.

On June 18th Microsoft unveiled their Surface tablets.  The Surface with Windows 8 RT features a quad-core Tegra 3 ARM CPU and a 10.6 inch 1366 x 768 screen.  The Surface with Windows 8 PRO features a dual-core Intel i5 and a 10.6" 1080p screen.  Both tablets have 2 keyboard options, a USB port, and access to the Windows Office suite of  apps.  The Surface seemed like a viable laptop replacement.  Other tablets like the Asus Transformer had offered keyboards before, but access to the Office suite of apps, a USB port, and the option to get an Intel powered Surface made it feel more like a real computer than a tablet.  No release date or pricing information was given but speculation was it would be announced at the June 20th kickoff event.

Publicly WP8 partners supported Surface, but privately it was rumored many of them were unhappy with Microsoft's decision to enter the hardware market.  Many of the partner OEM's were also readying WP8 tablets and now they had to compete directly with Microsoft.  When Google produces a Nexus product they choose a partner to make it.  That way Google isn't directly competing against the manufacturers they rely on.  They also spread the wealth around as Asus, HTC, LG, Motorola, and Samsung have all gotten a chance to produce Nexus products.  This keeps the partners happy while allowing Google to give users the pure Android experience.  Microsoft's decision to compete directly with its OEM partners during WP8's infancy seemed ill-advised.

Two days later on June 20th Microsoft officially announced Windows Phone 8 without a release date.  The Surface also didn't get a release date or pricing.  That information would have to wait four months until October 16th to be revealed.  The WP8 release date wasn't officially announced until yesterday. 

It's unbelievable that companies make this mistake over and over.  When Apple announces a product it's typically available for pre-order that day, and ships a week or two later.  They create buzz and then immediately take advantage of it with a product launch.  Meanwhile companies like Google, Microsoft, Motorola and Samsung hold product introduction conferences and don't announce release dates or prices.  By the time the product comes out months later the excitement from the announcement is long gone.  Why not wait to announce until shortly before consumers can actually buy the product and take advantage of the positive press?  The answer is unclear, but I'm positive the vast majority of people have forgotten all about those first WP8 and Surface press conferences back in June.

A few months passed and then on September 5th Nokia announced the Lumia 820 and 920 smart phones.  For all intents and purposes, the 920 is the flagship WP8 device.  It features the same dual-core Snapdragon S4 as Android flagships, a 4.5" "PureMotion HD+" 1280 x 768 screen, an 8.7MP PureView camera, 1GB of RAM and 32GB of internal storage.  The camera and screen tech were particularly impressive.  It finally looked like WP8 had a device that was different and technologically strong enough to warrant serious attention.  Sadly the press conference once again ended without a release date or pricing.
On October 4th AT&T announced the Lumia 920 as an exclusive.  That's when I knew WP8 was in trouble.  Look, the Samsung ATIV S and the HTC 8X (announced September 19th) are great smart phones, but they don't stand out.  The ATIV-S is basically a Galaxy S III in a different case, and the 8X is a hybrid of the HTC Rezound and One X.  Why would a consumer entrenched in the Android or iOS ecosystem switch to either one?  Put simply, they won't. 

The Lumia 920 is a stand out product though.  The camera is superior to those in other smart phones, the screen is beautiful , and the design is fresh and interesting.  Would the 920 have swayed large numbers of Android and iOS users to switch to WP8?  Probably not, but it had a much better chance than any other WP8 handset.  The exclusivity agreement effectively killed any chance of that happening though. 

Microsoft announced Surface tablet pricing on October 16th and that's when I knew WP8 was done.  The entry level 32GB Surface is $499 and doesn't come with the touch keyboard cover.  To get a keyboard you have to step up another $100 and get a bundle, or purchase one separately for $119.99.  The price of entry was officially too high. 

Why would anyone spend that kind of money and switch product ecoystems when they could buy an iPad or Nexus 10 for the same price?  Sure the Surface has some unique features and having Office on a tablet would be useful, but not enough to pay more for an inferior product.  The iPad and Nexus 10 have better CPUs, GPUs, and much better screens.  That's not even taking into account that a 16GB Nexus 10 costs $100 less than the entry level Surface.

Windows Phone 8 isn't a bad product by any means.  It actually has some really cool features, it's snappy, and it's different.  But it's also late to the party and doesn't do anything that warrants switching from Android or iOS.  Getting customers to switch product ecosystems is not an easy task.  The new product must either work substantially better than existing products, be sufficiently different to get consumers attention, or offer the same functionality at a lower price point.   Windows Phone 8 doesn't do any of those.  Microsoft should have announced WP8 at the beginning of October, aggressively priced the Surface tablets and made sure the Nokia 920 was available on all carriers.  Put that all together and WP8 would have had a fighting chance.  Instead it's D.O.A.

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