Yesterday the rumor hit that HTC was working on a Windows Phone variant of the HTC One. If I could YAWN any louder I would. This is the history of manufacturer support for Windows Phone. Take your flagship Android device and six months later, when it is beginning its way down the inevitable curve of decline into mid-range devicehood, put out a variant of it running Windows Phone. My original Windows Phone, a Samsung Focus, was a warmed over Galaxy S. It was on the market only a couple of months before Samsung relegated it to mediocrity by announcing the Galaxy S II. When I excitedly showed the Focus to people they inevitably pulled the Galaxy S from their pocket and showed me they’d had the same hardware for months. Microsoft was never going to gain traction with this kind of support from device manufacturers, and the manufacturers themselves were about to be blindsided when one of their own took a different approach.
Nokia, in committing their entire smartphone energy to Windows Phone changed the game. While the first generation of Nokia Lumia phones showed promise, the second generation positioned Nokia (and Windows Phone) on the front lines of the smartphone battle. Nokia isn’t just producing the best camera phones in the Windows Phone market, they are producing the best camera phones in the phone market period. And they aren’t running Android on them. Nokia isn’t just producing a very inexpensive low-end smartphone, they are producing one with better specs than high-end hero phones just over three years ago. And they aren’t running Android on them.
The vendors who gave lip service to Windows Phone such as HTC and Samsung have been pushed almost entirely out of the WP market, and they don’t look inclined to alter their strategies to change that situation. For HTC and Samsung, as well as others, “the plan” around Windows Phone appears to be to throw a model or two out on the market and move as many units as they can with as little effort as they can get away with. There is no strategic vision around their participation in the Windows Phone market. And as far as I can tell, the only reason for them to remain in it is so they won’t have to start over from scratch should WP really take off and becomes a competitive threat to their Android efforts.
It’s time for a little side story. Back in the 90s I’d do at least two customer tours a year visiting CIOs and other senior IT executives to talk about SQL Server. At the time a lot of those customers were existing Sybase customers and I was always being asked to justify their committing to SQL Server 7.0 versus Sybase System 11. Now Sybase had indeed done us a great favor by totally screwing up System 10, but they were promising great things for System 11. Meanwhile, of course, Microsoft was unproven in its ability to produce a database product independent of Sybase (as even SQL Server 6.0/6.5 were based on the technology licensed from Sybase). So I would proceed to explain our strategic vision, not just for SQL Server, but around Visual Studio, Data Access, Transaction Processing, Integration of Microsoft Office particularly Excel and Access, Windows Server, and various other technologies. And I’d end up pointing out that with Sybase you were buying a nice database product but with Microsoft you were buying an overall strategic vision for enterprise computing. I never lost one of those discussions.
Now let’s imagine a conversation between Nokia CEO Stephen Elop and AT&T Mobility CEO Ralph de la Vega. Elop presents Nokia’s strategy. How they are going to build a range of smartphones, each designed to be a leader in its class. He describes how Nokia intends to be the clear leader in photography on smartphones. He describes how Nokia is making major investments in higher-level software to differentiate their devices from Samsung and Apple. He talks about Nokia’s design language and how their devices will be as far from “me too” as any major manufacturer has dared go. He talks about how Nokia will have the perfect device for AT&T’s GoPhone pre-paid service as well as hero and mid-range devices for the post-paid service. He explains how Nokia will provide exclusivity, and differentiation, amongst devices (particularly higher end devices) for each carrier. At the end of all this de la Vega says something like “That’s a great story and we’d love to work with you to make the Nokia Lumia family a strategic part of our offering. Let’s have our staffs get together and put together a plan for the Lumia to be one of AT&T’s two or three top efforts in the coming years”.
Ok, now HTC CEO Peter Chou comes in for his annual discussion with de la Vega. Somewhere in the middle he devotes a couple of slides to their next generation Windows Phone device. He mentions that it is a variant of the HTC One that AT&T is already selling. de la Vega tells him AT&T is interested in carrying it and that AT&T’s buyer will contact their HTC Account Rep to make the arrangements. Then the conversation moves on to Facebook and the HTC First, or Last, or whatever other flavor of the month HTC is attempting to differentiate their Android offerings.
Is it any wonder that Nokia is blowing HTC and Samsung out of the water when it comes to Windows Phone?
Let’s now explore another aspect of strategic vision. One of Microsoft’s observations about the success of the iPhone, and about problems with its own Windows Mobile ecosystem, was that fragmentation of the user experience was a bad thing. Obviously the success of Android, despite this fragmentation, is a counter-example. But back in 2008 trying to minimize user experience fragmentation became an important goal for Microsoft, and so Windows Phone was designed to prevent skinning by device manufacturers. Microsoft would enable extensibility through hubs and other mechanisms, but all Windows Phone devices would retain a common look and feel. The device manufacturers balked and saw Windows Phone as preventing them from offering sufficient differentiation from their competitors. Meanwhile Nokia accepted these limits, knowing they could push Microsoft for more mechanisms for differentiation than existed in Windows Phone 7. And in my opinion, Nokia has validated Microsoft’s vision.
I’m not sure I’ll ever be able to switch from a Nokia Lumia to another Windows Phone because I’m locked in to what Nokia has added in the way of software. On the other hand, I can pick up a non-Lumia Windows Phone and have no problem at all operating it. That to me is the best of the world Microsoft wanted and the world that the device manufacturers wanted. The Lumia family is a highly differentiated set of devices.
The problem for device manufacturers like HTC and Samsung is that their idea of differentiation is so centered around changing the top-level user experience via skinning, an idea that they originated with Windows Mobile and then put at the center of their Android efforts, that they refused to see or invest in an alternative. And since Windows Phone was never a strategic priority for them, they didn’t have to.
Having a clear and compelling strategic vision counts for a lot in this world. Nokia has proven that having one, and executing against it, can turn you into the dominant player in a niche. Next up is for them to prove that the one they have can return them to glory in the larger phone market. The fact that they have the vision and appear to be executing well against it is a very positive sign in their ability to survive and thrive.
BTW, Don’t let low U.S. market share confuse the issue. Nokia was never a leading supplier of phones in the U.S., and had absolutely no presence with Symbian-based smartphones. That they are shipping devices on all four major U.S. carriers, with strong efforts at the two largest, and have any measurable market share at all, is a huge advance for them. But in any case, pay more attention to the progress they make in faster growing markets. That’s where their channel and other business strengths should best leverage the product-level work we are all so focused on.