Windows Phone: while it's not the end of the road, it is

This article may contain personal views and opinion from the author.

In 2011, it all started with a memo for Nokia and Microsoft. Today, it all seems to end with a memo.

After acquiring Nokia’s handset division for nearly $7.2 billion last year under former chief executive Steve Ballmer, Microsoft now admits this was a costly mistake with a $7.6 billion write-off and massive lay-offs that will shatter four-fifths of Nokia employees.

Microsoft CEO Satya Nadella addressed the company in a memo (read the full memo at the bottom of this article) written in the best traditions of convoluted, lacking-specifics corporate lingo about “growing and creating a vibrant Windows ecosystem”. The essence of the memo, however, is about the opposite: it is about layoffs and admitting defeat.

The reaction to it was immediate with speculations that Microsoft is about to exit the phone business altogether. It won't (Bloomberg’s Microsoft insiders claim that the company will not exit the business for at least two more years), but rather than having a conversation about the future of Windows Phone and how great could a new PureView Lumia flagship be, the memo makes us wonder whether and when will Microsoft shut down Windows Phone altogether.

I can't help but wonder: is Microsoft standing on a burning platform?

#1: Osborne effect


Back in 1983, computing was at its infancy and growing in leaps and bounds. The Osborne Computer Corporation - a firm that set on to build a personal computer to challenge the leader in the space at the time, IBM - had its Osborne 1 portable computer on sale and largely depended on the machine for its revenues. Hopeful for the future, founder Adam Osborne decided to show the media several new computers that the company was developing, but that were still far from ready for the market - the Osborne ‘Executive’ and ‘Vixen’. These two more powerful models were to deliver better specs and performance for the price, so showing them to the media seemed like a good idea to build up hype. Instead, something different happened, something as monumental as to go in the history books as the ‘Osborne effect’: sales of the available Osborne 1 stalled. Dealers cancelled orders. Sales went down to nearly zero for a few months, forcing the company to file for bankruptcy in September of the same year. It was a disaster.

Bringing up non-existent, future products turned out to damage the sales of the current devices, and that is what is currently known as the Osborne effect.

This lengthy introduction would not be of much interest unless the same story repeated in the present and near past.

The Osborne effect is what effectively brought Nokia down to its knees after newly appointed CEO Stephen Elop repeated the mistake of Adam Osborne with the then largest phone maker. The ‘Burning Platform’ memo issued in February 2011 described all current Nokia phones as a part of a burning platform, while the upcoming Nokia Windows Phones were not to be sold for another six months or more. This sent a clear message to the market: don’t buy these current Nokia phones. The market got the message right away, and it was a disaster for Nokia, as the company lost nearly half of its market share in just two quarters, a negative record for a corporation the size of Nokia.


Today’s memo by Satya Nadella sounds similar in two aspects: first, the company clearly says it is moving away from (giving up on) growing a standalone phone business, and secondly, it leaves the much-advertized push for universal apps in hiatus.

Conflicting statements and lack of clarity about the future


The whole memo not only sets a negative tone for the Windows Phone conversation, but it is also filled with conflicting statements and paints a rather chaotic picture of what’s going on at Microsoft.


Nadella starts off the memo by clearly saying that “we will take a long-term view and build deep technical capability that allows us to innovate in the future” then a few paragraphs later he argues with his own statement, denying it at its core, by saying: “we need to focus our phone efforts in the near term while driving reinvention.”

Which one is it then: a focus on the long term or the short term?

Then, Nadella goes on to say that the company will focus on three areas with phones: affordable devices, business-oriented phones and flagship phones (all in the plural). Bloomberg’s inside sources say that there will be one or two new phones in each category every year, meaning a total of six or less than six Lumia phones for a year. Given the sore and apparent lack of a flagship-grade phone by Microsoft in the past year or so, this seems like an actual widening of the portfolio in that segment, yet it is confusingly portrayed as narrowing down the efforts.

So which one is it?

A quick guide to Microsoft corporate lingo


Then, there is the terrible corporate lingo that one has to wade through. I imagine having to read through the fake optimism and devoid of meaning phrases in this letter if I were a Nokia employee about to be laid off. In a triumph of corporate hypocrisy, Nadella talks about 'headcount alignment changes' and 'partnering to drive better scale and results'. Even though this is a letter to the Microsoft team, it sounds like a letter to the angry shareholders, a letter that refers to the employees in the non-human terms of big business.

Here are just a few excerpts of that letter and how I would interpret them if I were to be the employee to be laid off.

Translation of Satya Nadella's convoluted corporate lingo to its actual meaning



"headcount alignment changes" = "you’re fired"
"I want to discuss our plans to focus our talent" = "JK, I want to discuss you being fired LOL"
"we’ll partner to drive better scale and results" = "you’re fired kthxbye"
"we will take a long-term view … that allows us to innovate in the future" = "in the present, though, you’re fired"
"I want to update you on decisions impacting our phone business" = "yes, you. F-i-r-e-d."
"reduction of up to 7,800 positions globally" = "7,800 humans will be fired. My bad: laid off."

I hate to say it, but I’d rather read Donald Trump writing those ‘you’re fired’ memos.



#2: The end of the universal app


Microsoft has gone the extra mile to reach the dream of the ‘universal app’. An idea coined at the times of Steve Ballmer, the universal app would allow developers to code once for all Windows devices - desktops, tablets, phones, virtual reality, and so on. It is an alluring proposition given the strength of the Windows desktop platform and the possibility to bring those plentiful developers to the scarcely populated Windows Phone Marketplace.

However, by narrowing down the phone efforts (and be assured, Microsoft and formerly Nokia Lumia devices represent over 90% of all Windows Phone, there are no other phone makers willing to make WP devices in meaningful volume) and sending a signal that the platform might be abandoned at some time in the not so distant future, why would developers even bother about Windows mobile?

Why not just stick with the good old Win32 API that is well known by devs and offers broader capabilities?


Let’s not forget that scale is the primary concern of developers when choosing a platform, and with no prospect for sales on mobile, coders will be discouraged to start projects. Especially when you have iOS and Android selling millions (billions in the case of Android) of mobile devices.

Microsoft’s share of that market? 3%.

Expectations for the future? Let’s just put it this way: Will Stofega, program director at market research firm IDC, projects that Windows’ mobile market share will evaporate from about 3 percent to zero within a year.

“It’s not looking good.”

#3: Wrong time


Finally, I am just genuinely perplexed with the awful timing of this memo.

Windows 10 is not even out yet, and expectations are that Microsoft is about to unveil the first major new Windows Phone flagship at IFA 2015 in September (in just two months). Rather than using the proven old tactics of ‘accidental’ leaks and slight tid-bits that would keep phone aficionados waiting for ‘the next big thing’, all we get is some corporate talk about narrowing down efforts, restructuring and optimizations.

That’s simply not what users want to hear when you are about to unveil your most important product for the year.

The truth is usually simple, and after all that talk, it just seems that Windows Phone is no longer a priority for Microsoft. Yes, new flagships are coming, but there are no huge expectations, no hype.

It didn’t work out in the beginning, and it seems that even Microsoft has lost faith now.

Finally, here is the full text of Satya Nadella’s memo:

FEATURED VIDEO

70 Comments

1. shaineql

Posts: 522; Member since: Apr 28, 2014

Id love to see WP succeed, windows 10 is step in right direction.

2. shaineql

Posts: 522; Member since: Apr 28, 2014

Beside WP10 being ugly as hell , i liked the new Win phone 10 preview and its synchronization with win 10 desktop. It could turn into something bigger once win 10 desktop gets more popular

6. theguy2345

Posts: 1216; Member since: Jun 24, 2014

Ugly is one of the most suggestive words. It can be butt ugly to one person, while beautiful to another.

26. shaineql

Posts: 522; Member since: Apr 28, 2014

You are retard if you find thishttp://www.phonearena.com/news/Windows-10-vs-Windows-8.1-The-changes-so-far-in-pictures_id71387 anything more than 2/10 which is f**king disgusting ugly. It looks like Win98, blocky 1 color fill buttons, no actual UI elements just bunch of blocks in settings and everywhere you go. Never bought WP device and never will untill i see final product and how well it behaves once in Sync with Windows 10 Desktop (which i will most definitely buy on 29th).If i have good sync with data , sms, notifications ill take it.

27. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

Yes because android icons are so 2015...you know...windows 95 and all... http://i.imgur.com/VTLgR4j.png I also have more with tile art

42. sgodsell

Posts: 7369; Member since: Mar 16, 2013

But at least with Android you can use different launchers. So if you like WP, then download a WP launcher. If you don't like WP tiles, then use another launcher. BTW there is a Windows 95 launcher for Android now. There is even an iOS launcher. With WP you are stuck with what Microsoft gives you.

49. semipro1337

Posts: 111; Member since: Oct 01, 2012

"But with android you can use different launchers. They are all basically a rip off of another company's ideas, and most of them are horrible and run like crap on the newest hardware. But for the people who need to pretend their galaxy is an iPhone or a windows phone you have that ability" Fixed that for you.

59. sgodsell

Posts: 7369; Member since: Mar 16, 2013

Clearly you reaffirmed a critical point that WP is more restrictive and closed then Android. You say that most of the launchers are horrible and run like crap. Well clearly you haven't used Android in quite some time or any of the latest hardware. The other thing you showed was your ignorance and lack of technical knowledge. There fixed that for you.

70. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

I like launchers, problem is, haven't found one that has kept me on it for my Z3, and a lot of them have crashed on me or icon packs working funny and not showing icons. The two phones we use here for 3rd party launcher stuff, regularly have problems. However, my two friends phone have lovely simple launchers and have no issues. Still looking for the one that stands out for me. So far my favorite has been a LCARS launcher.

72. semipro1337

Posts: 111; Member since: Oct 01, 2012

Nexus 6 too old for you? Maybe my G3, oh wait its a year old so scratch that. Guess what they all ran aftermarket launchers like crap, the g3 struggles with its stock launcher....6 seconds to launch the phone app after unlocking the screen? Happened more than once. I'll take the snappiness' of WP any day over that. And also, where exactly did I show lack of knowledge?

51. semipro1337

Posts: 111; Member since: Oct 01, 2012

And I'm sorry but really nobody buys something for the way it launches something. It's the other things that WP does that android or ios doesn't. I'm not going to list any but there are definitely things that you ca get with WP that you can't with other OS and that goes for all 3 off the major ones and I would expect the others have things that appeal to customers other than what the launcher does. Launcher is 1% of a phone OS, nothing more.

46. iliketech

Posts: 78; Member since: Aug 17, 2011

nice screen shot

29. StreetNerd

Posts: 870; Member since: Dec 08, 2010

sms in 2015? wtf

30. theguy2345

Posts: 1216; Member since: Jun 24, 2014

If anyone is a retard, it is yourself. Don't hide it, embrace it. You're the one who believes that if it is ugly to you, it is ugly to everyone else. That is short-sighted, and is a quality that only people that can't think beyond themselves have.

18. waddup121 unregistered

WP10!!!

32. medicci37

Posts: 1361; Member since: Nov 19, 2011

It's about time!

64. corporateJP

Posts: 2458; Member since: Nov 28, 2009

ROFLMAO! Karma finally came, the Grim Reaper is about ten minutes behind! And next year, you'll be able to buy Nokia-designed and branded phones running a working OS.

3. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

Sadly, the brand ''WINDOWS'' is a stigma to some (or most) people...hence, the failure Zune, Vista, 8.1 , IE , the list goes on

12. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Wrong CEO for Nokia. Conflict of interests at every levels at yet the Nokia board still approve his appointment. Perhaps there are more than meet the eyes.

52. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

Nokia talked with google before they decided on Windows. Everyone sees Elop as the big bad wolf, but the entire Nokia board, with their resources, knew one thing. They did not have the cash or ability to compete with Samsung on an android level. Look at it today, who controls Android in the major markets? HTC? Lenovo? Samsung. They knew this back in 2009 - when they talked with google. MS allowed them to stop bleeding ink like they were, to offload a failed OS division in Symbian and Meego, and have no worries about OS production. This allowed them to concentrate on Devices. Something that failed. Was MS the right choice? hindsight is always a kick in the butt.

56. sgodsell

Posts: 7369; Member since: Mar 16, 2013

Bull s**t. Microsoft came in there and paid Nokia to be exclusive for WP ONLY. That is why Microsoft paid Nokia 250 million per quarter and was promised more from Microsoft if they would be exclusive. Clearly you forget about that part. Nokia even announced back in February 2011 that they would drop meego and symbian for WP. Nokia's first Meego device didn't show up until later that year in September 2011 which was the N9.

62. jroc74

Posts: 6023; Member since: Dec 30, 2010

"Look at it today, who controls Android in the major markets? HTC? Lenovo? Samsung. They knew this back in 2009 - when they talked with google." If they knew this back in 2009....they should be playing the lottery every day. Because HTC and Motorola were the top dogs in Android land in 2009, 2010. Samsung was no where near as big in Android in 2009 as they were in late 2010, all of 2011. Unless they had insider info about Samsung's future plans. Samsung didnt get big in Android land until the GS 1. And that series didnt really take off until early 2011.

50. semipro1337

Posts: 111; Member since: Oct 01, 2012

Zune is a brand name, not necessarily hardware. It's now Xbox music or whatever but you know its still same thing that Zune for deaktop was. The Zune media player failed because of poor advertisement which caused poor sales. Everyone that I know that ever owned one, the original or like myself the Zune HD, liked it. The UI was way more fun to use than most today, especially the iPod line. Microsoft has great ideas with half assed execution.

4. SitiNurbaya0

Posts: 153; Member since: May 22, 2015

@Victor !!!!!!!!!!!!....... I only see 1 phone.... !!!!!!!!!!!!! "We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love." "We’ll bring business customers the best management, security and productivity experiences they need" ----- not a phone.... "value phone buyers the communications services they want" ----- not a phone "Windows fans the flagship devices they’ll love." ---- device = phone

5. theguy2345

Posts: 1216; Member since: Jun 24, 2014

Look at it this way. They are doing a surface with the phones. To attract OEMs, the are going to release six or less phones a year. These are going to set an example of what they want. And even though the surface lost a billion dollars, it's still here and now, you see two in ones and full on tablets with windows 8 from OEMs. And where they not late to the party there too? Another thing. You said that they are now treating windows phone like a side project. Well, it's the exact opposite now. While for all these years, it has been a side project for them, they just got serious with it. They just ate scaling back to have what I'm going to call the surface effect.

10. Victor.H

Posts: 1062; Member since: May 27, 2011

The Surface analogy actually appears in the words of Microsoft COO Kevin Turner, or you can call it 'doing a Nexus' in a sense. Your point that they just got serious, though, is hard to proof: Microsoft is quitting markets, firing people and unlike Google has no other significant partners that would make Windows phones. Who will make those Windows Phones when practically the whole team responsible for that is laid off? When you want to build great devices, you invest in them -- don't just get rid of the whole department. It seems inevitable that already low market share will suffer, and when market share goes down, it's hard to see developers building for Windows phones.

17. theguy2345

Posts: 1216; Member since: Jun 24, 2014

Well, they are firing people to scale back. Nokia had eight series of phones. That is way too much. Nokia wanted as much as the windows phone pie as possible, while Microsoft wants the opposite to attract OEMs. And honestly, the do have trouble with OEMs, but I can seem to count on HTC. I have an M8 for windows, and it is a brilliant device. As for people to build the phones, I believe the Surface team will help. I really do think the Lumia 940 could easily turn into a Surface phone.

35. runzlord

Posts: 245; Member since: Oct 13, 2013

the surface team won't just do it like nokia, microsoft is falling fast, any point proved does not still hind the fact microsoft needs a new C.E.O, the need it like, this night!

41. theguy2345

Posts: 1216; Member since: Jun 24, 2014

No matter where their stance is, they are not falling by any means. They have the biggest desktop OS. Their product portfolio is humongous.

63. runzlord

Posts: 245; Member since: Oct 13, 2013

true, but they are very slow, google is catching up quickly and very soon people would prefer to get a chromebook than a pc, even at now lite users prefer an android tablet than or ipad than a pc. just like devices are now being made with 64 bit. microsoft needs to hasten up like release a major update like windows 10 twice a year. ok im just exaggerating, but they still need to hasten up and a new ceo that is passionate about windows could help cos im sure this present ceo does not love windows at all

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.