Industry News

RIP Windows Phone: Death by App-phyxiation

by Lewis Leong on Oct 19, 2017

By all accounts, Microsoft built a great mobile platform with Windows Phone. It was robust and connected to Microsoft’s core services, including the company’s bread and butter, the Office suite. The UX was bright, logical, and unique, and the company had the cash and marketing muscle to attack key global markets. Yet, somehow, Windows Phone failed to ever gain meaningful market traction.

Windows Phone was obviously late to the party—the first version didn’t hit the market until October 2010, a full three years after the first iPhone and a full four years after the first Android phone. When Windows Phone launched, Apple’s App Store already had about 200,000 apps and games, a strong developer community, and a clear business model backed by what would become a premium lifestyle brand.

By June 2015, Microsoft had all but conceded the global smartphone market to Apple and Google, though it took until October of 2017 for the surrender to become official. Quoting TechRadar:

“This has been on the cards for a long time. Phones running Windows Phone or Windows 10 have been heavily in the minority for a number of years, and nothing was coming to change that. The reason – and one that (Microsoft’s corporate VP for Windows) Joe Belfiore confirmed – is simple: There weren’t enough apps.”

That’s pretty straightforward, but it does raise one question: How could Microsoft, one of the most valuable, savvy and well-known consumer technology companies on the planet, fail so miserably in mobile?

After all, this is Microsoft we’re talking about, a company that, for a long time, has been run by Steve Ballmer—someone who is famously all about the value of developers. Microsoft has done a nice job of monetizing their core solutions across other mobile platforms like Office 365, but failed to create a lasting mobile platform and developer ecosystem of their own. Why?

“But the crux of it may be that, as much as Ballmer and Microsoft “love” developers, they loved their licensing business model even more.”

There’s a number of reasons, but the crux of it may be that, as much as Ballmer and Microsoft “love” developers, they loved their licensing business model even more.

Licensed to ill

Over its short lifespan, Microsoft experimented with ways to grow the Windows Phone ecosystem, but was met with little success. At one point, the company tried wooing Android and iOS developers to build Microsoft products and services for those platforms, but Google and Apple shut that down in a hurry—Apple was no fan of Windows Phone, period, and Google was intent on breaking Microsoft’s licensing paradigm—so the developers never came.

Microsoft’s business model has historically been based on a few key revenue streams, the most significant being licensing fees collected for Windows and Microsoft Office. More recently, the company found success in gaming with the Xbox platform, and through the Surface Pro, which shows strong legs as an iPad Pro competitor.

But, like the once mighty BlackBerry (yep, they’re still around), Windows Phone simply never built the tools, market share, or app economics to pique the interest of mobile developers.

The CrackBerry parallel

Microsoft isn’t the only major mobile platform to fall short of its potential. Another one-time competitor in the handset space, RIM/BlackBerry, has been reduced to a shell of its former self for many of the same reasons that the Windows Phone failed.

BlackBerry has always been a poor platform for developers. Apps were always hamstrung by size requirements. Forbes summed things up this way:

“Research In Motion may have had a five-year head start on Apple, but they failed to build out a developer community and made the BlackBerry platform too complex for third-party developers. For end-users, navigating web-based applications on the BlackBerry browser was cumbersome at best.”

BlackBerry KEYone smartphone

BlackBerry has transitioned to using Android in order to survive.

Even today, with BlackBerry pivoting to using Android OS, the BlackBerry World app store is small and uninspiring. It’s difficult to use and the apps are few and of spurious quality. All but a handful of developers have abandoned it, both for the poor economics and BlackBerry’s perplexing hostility towards them (until 2014, the company often competed head-to-head with third-party app developers).

Of course, BlackBerry’s long-time walled garden approach was more akin to Apple’s app-roach than Microsoft’s, but the complete failure to engage app developers is common to each. In both cases, the company’s failure to adapt its business model for apps ultimately led to the demise of its core mobile business.

How Apple and Google avoided the same fate

One of the reasons that Apple and Google lead the planet in mobile is that they have found a way to leverage their core business strengths in the app economy.

Apple has built its walled empire on the basis of risk, category dominance, fierce pursuit, and protection of patents (at one point, the company spent more on litigation than research and development). The other thing that Apple does (and has always done) really well is provide a great experience for developers. That has meant more and better apps that helped attract users to its mobile platform, making Apple a preferred premium mobile brand. Apple can get away with selling $1,000 smartphones because it offers the consumer a great experience, and developers a $20 billion annual opportunity.

What Google is really good at, on the other hand, is search—a free, but wildly pervasive solution that is now intuitively understood by the whole planet. Google’s whole monetization strategy is in a) ads in search results and, more importantly for our discussion, b) the enormous amount of data produced by searches.

This “free” model isn’t just profitable; it was also incredibly damaging to Microsoft, which, while simultaneously struggling to attract developers from its larger rivals, was forced to invest in finding ways to charge consumers for things that Google is only too happy to give away as a loss leader to gain access to the consumer’s search data.

T-Mobile G1

Google’s first Android phone, the HTC Dream, aka the T-Mobile G1.

Google also learned what developers want a lot more quickly than Microsoft. A lot of developers really didn’t like the Android platform when it first came out, and with good reason. The first Android phone (T-Mobile’s G1), which lacked an on-screen keyboard and multitouch capability, wasn’t particularly attractive for users or developers, and the tools Microsoft provided simply didn’t match up. Bugsense put it this way:

“This is the most disappointing thing about Windows Phone. No rich notifications…no custom widgets, no live wallpapers, no true multitasking, no broadcast receivers and content providers, no openness, no abilities.”

In the beginning, there were very few apps available for either platform. But, while Microsoft meandered, Google acted quickly to improve the opportunity for developers by tying the then-Android Market (now Google Play Store) into device marketing.

By doing so, Google managed to make apps an integral part of the user experience, which made the phone an enabling tool, not the end product. Google capped the value proposition by ensuring Android phones were pervasive and inexpensive. Millions of global consumers bought in, and the developers followed. The rest is history.

In memoriam

Ultimately, the Windows Phone and much of Microsoft’s mobile aspirations died from a series of complications:

  • First, Microsoft was late to market: three years’ advantage was simply too much of a lead to stop Apple.
  • Second, they never got the price point of their devices right (because of Microsoft’s antiquated licensing model, Windows Phones were cheaper than iPhones, but not as inexpensive or easy to get as Android devices).
  • Third, Microsoft spent far too much time messing around trying to carve out dominance in the realm of stylus-based interactions, thereby failing to gain traction in multi-touch.

Most significantly though, the death of the Windows Phone can be attributed to a lack of developer support. Microsoft tried to buy their way in by paying developers to create for their platform, but even that wasn’t enough.

In the end, Windows Phone was abandoned by users and developers alike, not because Microsoft’s mobile platform was bad, but because its app economy wasn’t strong enough to survive.

Lewis Leong is AppLovin's Content Marketing Manager.

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