UPDATED: Surface Phone: How Microsoft Can Push WP and Rescue HTC


Image Credit: Jonas Daehnert. Check out all his great work @ deviantart

The time is right for Microsoft to release the Surface Phone. The situation is also perfect for them to choose HTC as the ODM that manufactures it.

Whoa! You're probably saying. Wouldn't that ruin their relationship with Nokia?

My answer is an emphatic NO for several reasons. And here they are...

It Has to Be Somebody

Seriously, Microsoft would need to contract someone to manufacture the Surface Phone. Why Not HTC?

My first Windows Mobile device was an XV6700 on Verizon. It was made by HTC but branded as an Audiovox. It was a great device for the era and built like a tank.

HTC has the experience as an ODM to build a device to Mcrosoft's design spec. And as they've proven with the new HTC One, they can provide an amazing level of fit and finish.

Too Much Time on Their Hands

With their recent shift to scale back on the number of devices they release and market, HTC would have the time to dedicate to the Surface Phone. In fact, being the Surface Phone ODM fits right in with their new philosophy of one device on every operator. With the the design skill of Microsoft's Surface team and HTC's build chops, it could be a truly world-class device.

Cost Friendly for a Chash-Strapped HTC

It's no secret that HTC is coming of the worst quarter in their history. Their net profit fell 98% to just $2.8 million year-over-year. A combination of delays in releasing the One and the juggernaut that is Samsung clearly took it's toll. Now, the One should sell decently as it is a beautiful device, but the delays have put it up against the release of the Galaxy S4 and unfortunately I feel it willl severly hurt sales of HTC's newest flagship.

This is where Microsoft comes in. By contracting HTC to manufacture their design, HTC would have an opportunity to move a few million devices that are pure profit. No R&D costs, no testing costs, no OS license fees.

Think of it as similar to the support payments Microsoft is giving Nokia but instead of license fees, MS is getting devices in return.

Best of all (for HTC) if the device doesn't succeed, they loose nothing. And honestly, it couldn't be much worse than the 13% share of the Windows Phone HTC currently holds now (~1.2 million)

If you don't think HTC would benefit greatly from manufacturing a Microsoft-branded device, take a look at LG's sales pre & post Nexus 4.

What about Nokia?

Let's afce it, Nokia is the Samsung of Windows Phone. They have almost 80% of the platform and a Halo device similar to what Google does with the Nexus line won't knock them off that perch.

Nokia brings unparrelled imaging to the table, an amazing stable of exclusive apps, and their own stunning design & build quality to the table. And if a Surface Phone can generate interest in the Windows Phone platform it would be good for Nokia as well.

Even Elop agrees.

"We’re encouraging of HTC and Samsung and Microsoft or whomever to have devices in the market and to be making whatever investments that helps spur the ecosystem on"

Microsoft could also position a Surface Phone as an ultra-premium device and price it directly against the likes of the Galaxy S4-type devices at $249.99 on contract and let Nokia slide in to where it seems comfortable in the $199.99 range (as well as the great entry-level phones they're making).

Why Now

HTC is in trouble. Their profits have been declining year-over-year with this last being the worst in company history. The cash influx provided by a bulk of orders (and hopefully reorders & reorders) from Microsoft would go a long way to resurrecting this once dominant company. And from a nostalgic POV I would love to see HTC do well and make a Windows Phone device I would actually want to own. I've owned 8 HTC devices starting with that XV6700 (Touch Pro, TP2, HD2, Evo 4G and three Arrives (7 Pro) floating around my house somewhere). With the HTC One they've proven they can build works of art. Now please build one for Microsoft.

From Microsoft's perspective, while Windows Phone is growing (and primed for more growth), MS needs to do more to fix the spotlight firmly on the platform and maybe even stir up the same kind of controversy the did with the Surface tablet.

Besides, who wouldn't want to walk into a Microsoft Store and pick up a Haswell Surface Pro/Surface Phone bundle in a few months?

Update: Chris Ziegler Article...

Chris Ziegler posted an article last night detailing just how bad it is at HTC right now. Poor sales & executives leaving have the company in a tough position.

I'm reminded of a scene in "The Princess Bride" where Inigo Montoya says: "Vecini says when a job goes wrong you go back to the beginning".

It may be easy to forget now, but nobody really knew who HTC was until they released the Touch Diamond

Htc-touch-diamond-00_medium

via www.mobilterminalen.dk

Before that time they made their name as an ODM. Maybe it's time for them to go back to the beginning.