Android killed Windows Phone, not Apple

T-Mobile G1, the first Android phone

So Windows Phone is well and truly dead (excepting a tiny handful of Windows 10 devices). There it lies, buried in the graveyard of failed smartphone platforms. Cause of death: Android. Yes, really.

Apple changed everything in mobile, but in the chaotic years after its release, there was a massive opportunity to be the alternative that would ultimately dominate marketshare. It was Microsoft’s for the taking, but Google got there first.

I started reflecting on what happened to these smartphones as the 10th anniversary of the iPhone came and went. And the thought that kept occurring to me is how little everybody knew about what was about to happen to the smartphone industry before the iPhone came along. Nobody knew what they didn’t know.

That led to some hilarious quotes from competitors that are easy to mock now. BlackBerry CEO Jim Balsillie’s “in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it." Palm CEO Ed Colligan’s “PC guys are not going to just figure this out. They’re not going to just walk in.” Microsoft CEO Steve Ballmer’s “It doesn’t appeal to business customers because it doesn’t have a keyboard.”

After they said those things, all of those CEOs tried (and failed) to adequately respond to the iPhone. BlackBerry duct-taped extra software on its aging platform and tried to make the whole screen a giant button. Palm made a go of it with webOS but couldn’t get carrier support, nor make products good enough for consumers to go out and buy their devices.

Microsoft’s response was Windows 6.5, a hack on an old OS that wasn’t designed for full touchscreen devices. Then Windows Phone 7, which was an admirable reboot with genuinely new design ideas. It came too late, though, and floundered. Windows Phone 8 took a bad situation and made it worse by angering Microsoft’s surprisingly passionate fanbase when they learned existing devices wouldn’t get software upgrades. (The same thing happened with Windows Phone 10, though by then it hardly mattered.)

Oh yeah, one more thing: somewhere in there Microsoft bought Nokia and frittered away the most storied and trusted phone brand in history. Cool job.

So while Microsoft didn’t do itself any favors, I’d argue strongly that all these machinations and flailings weren’t a response (or weren’t only a response) to the iPhone. The real enemy was the company that had set its sights on Microsoft’s phone ambitions since before the iPhone was released.

That company was Google, of course, and it only tangentially wanted to take on the iPhone. Google’s real target was always Microsoft, and it hit the bullseye.

Google’s ‘Sooner’ prototype, killed by the iPhone

The best window into what Google was thinking about when it was creating Android is the 2012 legal fight it had with Oracle about Java. The deeply nerdy API details of that case don’t really matter now, but the process of a public, protracted court battle gives us a special and unique gift: testimony and documents.

Here’s some of what then-CEO of Google, Eric Schmidt, had to say about the creation of Android:

Q. And once Android came aboard and Mr. Rubin came aboard, was there a business strategy formed about what Android would be and how it worked?

A. Yes.

Q. Can you tell the jurors about that? What was it?

A. My recollection was that the the strategy that evolved over the first year, which would be roughly 2000 and — 2006, was to build a platform — which, again, we previously discussed -- that would be free and clear of some of the other licensing restrictions that were slowing down the industry, and that would, in fact, create a viable alternative to the then key players at the time. As you've earlier seen in the documents.

So our idea was that if we made something that was generally available, it would provide a lot of customer value; it could be a very large platform; and it would grow very quickly. All of which has, indeed, occurred.

Q: When you say open or alternative to what was out there, tell our jurors what you mean by that.

A. Well, at the time, we were quite concerned about Microsoft's products. It's hard to relate to that now, but at the time we were very concerned that Microsoft's mobile strategy would be successful.

It's also true at the time that the primary player in the industry was Nokia, who had an operating system called Symbian, which we were also concerned about.

This was before the iPhone was announced and before the whole iPhone revolution occurred.

This all sounds awfully precious now, with the benefit of hindsight. The very idea that Google was terrified of Windows Mobile is hard to wrap your head around. After all, we all know that was the iPhone that changed everything in mobile, it was the iPhone that made all those other companies launch half-cocked jerry-rigged products as a stopgap before remaking their platforms later on.

Indeed, that happened with Android, too. Andy Rubin famously revamped Android’s launch plan when we saw the original iPhone presentation:

Rubin was so astonished by what Jobs was unveiling that, on his way to a meeting, he had his driver pull over so that he could finish watching the webcast.

“Holy crap,” he said to one of his colleagues in the car. “I guess we’re not going to ship that phone.”

But go back to Schmidt in that trial for a second. The thing he and Google’s other executives were worried about was ensuring that mobile users continued to have access to Google search. He saw clearly that there would end up being a software platform that lots of different manufacturers would license and use to make phones, and he wanted Google to be on it.

Rather than trust Microsoft and Nokia and everybody else to keep their platforms open to them, Google just went ahead and made the open platform itself. And then it released it to anybody to use for free, undercutting Microsoft’s licensing fee for Windows Mobile.

What killed Windows Phone was getting beat to market by Android. It took way too long for Microsoft to release a viable competitor to the iPhone - it didn’t really land until 2010. By then, Android had already been around for two years and Verizon was selling the Droid for a year.

Back then, despite the disruption in the market that the iPhone brought, US carriers still had the power to determine winners and losers. And since only AT&T had the iPhone, the other three in the US were casting about for their competitive product. Verizon, in particular, was going to be the kingmaker.

In 2008, Verizon tapped BlackBerry’s Storm, which was a colossal failure. In 2009, Verizon looked at what else was around. Palm hadn’t been able to convince Verizon to pick up the Palm Pre and Windows Phone 7 was still a year off. So Verizon went all in on Droid and the rest is history.

This is obviously an oversimplified timeline. Nokia woulda-coulda-shoulda made a move, for example. Palm and BlackBerry and everybody else made enough mistakes to fill books.

But in mobile, there’s no greater woulda-coulda-shoulda than Windows Phone. Everything that made Android successful was stuff that Microsoft was basically already trying to do. It’s just that Microsoft did it not quite as well, not quite as free, and way too late.

Comments

I’m kind of glad Android came out ahead, it’s certainly turned out to be the best of the lot. I would like to see another player gain market share, but I think this would only happen in a new product category and so it’s unlikely at this stage.

To think I used to be an avid WP user.

Relevant humour:

Same here. I had 2 Windows CE PDAs and 4 WM phones.
Back them it was really clear Rubin was targeting Microsoft and that was probably why Google bought them. MS gaining dominance in mobile was going to severley curtail thaier search and ad business.
I bough the HTC Desire out of interest when Android launched in teh UK but always saw myself getting the next Windows device When that came out (HTC HD7 and 7Pro) it was such a crock I stuck with Android until my work gave me an iphone

There was a couple of years there where I thought Windows Phone would become the popular "feature" phone. If you went down the prepaid aisle or looked at anything under $150 at the time, Windows Phone was the clear option. There were multiple nokias and maybe a HTC or Samsung to choose from that all provided the same surprisingly buttery smoothness. Next to them on the shelves were android phones that just simply weren’t ready for the hardware they were on. This was still before the Moto e and g, and even their first year it still wasn’t always quite there. It sold, but clearly not enough to convince developer support further dooming its existence.

Thought the same. We didn’t take into account where the money was, and how developers chase the dollars, not the user count. Android sold some flagships on top of the massive amount of feature phones so it limped along for a while with iOS being dominant. Lumia never got any traction like Galaxy did.

This. I keep my old Lumia 521 as a backup phone. It’s built like a tank, lasts all day, has a nice and loud earpiece, and supports VoLTE for higher-quality voice calls. And the entire interface is responsive and a perfect smooth 60FPS at all times (though responsive only applies to basic functions, fire up some third party apps and things take a pretty long time to load). Perfect candidate for a backup device. Cost $30 brand new. The camera isn’t half-bad, either. Better than some of my later Android phones.

I believe Microsoft killed Windows Phone.

When they announced WM6.5 changes, it only came in at end of the year. By that time, everyone has already forgotten about 6.5 and its changes.

Same goes for Windows Phone 7. And came the killer when WP7 phones can’t be updated to WP8. DOA & RIP Nokia flagship phone. 7.8 came too late.

Just way too many misfires and unclear directions that even HTC and Samsung took a cautious approach in supporting WP.

As they said, hindsight is 20/20. But still good to see they are still aiming for that unified OS ideology.

Their OS is all they really have so it’s the only logical direction. All of the products they create fail to succeed in the mass market. With their biggest exception being the Xbox 360 & arguably the Xbox One. Surface products don’t look to ever pierce the top 10 in PC marketshare. Their only successful product is Window’s & that’s thanks to its proliferation in the 90’s & Apple’s decision to remain a silo even into the 2000’s & not allow 3rd parties to use their OS in their PC’s. They have no other choice but to make their primary cash cow better. How long that will last is anyones guess.

you’re cute. this post was cute.

Microsoft only has windows?

you should try reading their financial statements for a start if you belive that:
https://www.microsoft.com/investor/reports/ar16/index.html

Some highlights.
85 Billion Revenues with 17Billion in net Income. With a total assets of 190Billion.

Their products and income recognized from the following categories

Productivity and Business Processes

  • Office Commercial, including volume licensing and subscriptions to Office 365 commercial for products and services such as Office, Exchange, SharePoint, and Skype for Business, and related Client Access Licenses ("CALs").
  • Office Consumer, including Office sold through retail or through an Office 365 consumer subscription, and Office Consumer Services, including Skype, Outlook.com, and OneDrive.
  • Dynamics business solutions, including Dynamics ERP products, Dynamics CRM on-premises, and Dynamics CRM Online.

Intelligent Cloud

  • Server products and cloud services, including SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure.
  • Enterprise Services, including Premier Support Services and Microsoft Consulting Services.

Personal Computing

  • Windows, including Windows OEM licensing ("Windows OEM") and other non-volume licensing of the Windows operating system, volume licensing of the Windows operating system, patent licensing, Windows Embedded, MSN display advertising, and Windows Phone licensing.
    * Devices, including Microsoft Surface ("Surface"), phones, and PC accessories.
    * Gaming, including Xbox hardware; Xbox Live, comprising transactions, subscriptions, and advertising; video games; and third-party video game royalties.
  • Search advertising.

your mistake here is looking at Microsoft from the Consumer’s eyes. You think that they operate like Apple. Microsoft is a completely different beast. And they have had some failed products in both consumer and enterprise, But to think that Microsoft of today is JUST windows is like believing Google is ONLY android, or Apple is only the iPhone.

Microsoft has billions of dollars worth of successful products. Many of them power the worlds infrastructure.

Microsoft are the most diverse of the big five in terms of their revenue.

Office/Window’s is STILL their biggest cash cow for the mass market…

You think I’m not well aware of the software/services/enterprise offerings they have or their net value? I was CLEARLY speaking about the mass market & the products they deliver to the mass market. It just looks like you wanted to name every avenue in which they make money to beef up your argument completely ignoring my point.

I’m clearly speaking about products they sell directly to consumers. The mass market. I don’t give two craps about the many other ways they make money. That clearly hasn’t been enough to make Surface a top 10 PC. They have still failed to create a physical product that the mass market jumps on, despite being the 5th most valuable company in the world. They own 90% of the PC OS market but can’t pierce the top 10 in PC sales, yet a company like Apple who sells premium PC’s, just as they do, has been a top 10 PC manufacturer for over a decade with less than 4% of the OS marketshare.

While their proliferation is the reason for their success in the software business, the mass market clearly has little interest in them in the world of physical devices.

It’s not a mistake to look at Microsoft from a consumers eyes, I do not care about the other avenues they earn revue from, nor do most consumers. That’s not helping them have mass market appeal. That’s not selling physical products. I’m not saying they don’t have an infrastructure bringing them plenty of revenue, my argument was clearly that they cannot create products that do well in the mass market. Regardless of if they are "powering the worlds infrastructure."

In the end though, Microsoft (unlike Apple for instance) is far more focused on the software side of things. They don’t WANT a top selling physical hardware product. The Surface line serves the same purpose as the Nexus line of phones.
They are a services company, and they are good at it.
That said, I’m not sure why you think Surfaces aren’t successful.

They don’t WANT a top selling physical hardware product.

Where are you guys getting this statement from? You think if the mass market said "oh shit, we want this!" that Microsoft would be like "nah, chill B. We don’t want all of you to want this. We’re just doing it for the kicks." HELL NO. They would double down. So no, I don’t buy into that.

They have OEMs (just like Android) for a reason.

Comparing MS and Google to Apple’s ‘mass market’ physical products approach is like comparing apples to oranges. Like complaining that Apple doesn’t have a search engine or barely makes any money off advertising. Duh, they all have different avenues for their revenue.

They are trying with Surface. It’s been around for what? 4 years tops? You think XBox as a brand was killing it after 4 years? Guaranteed if Microsoft didn’t allow Windows to be sold on any laptops but just their own, they would smash Macbook sales with their Surface line, and be in your illustrious ‘top 10 PC manufacturers’ list.

We get it, Apple makes the most money with smartphone profits (and maybe laptops too?). So should everyone else just give up and stop because they aren’t #1 (for physical mass market products)?

All of the products they create fail to succeed in the mass market.

Funny, I thought you were talking about Google for a second… Another ‘weak company’ with ‘only 2 products that ever succeeded’.

That’s a BS excuse. They could indeed be a top PC manufacturer. Poor marketing & poor targeting of the average Windows user is why Surface isn’t in the top 10. If over half of the top 10 make Windows PC’s & Microsoft owns 90% of the PC OS install base, they have every bit of leverage to create products that people will want.

Xbox as a brand was doing fine after 4 years. They were never "killing it" as they were never the market leader. PS2 outsold them pretty much month to month, Wii outsold them, PS4 is outselling them, Switch is outselling them since its release.

Did I say anyone should give up? I’m simply stating my opinion.

You seem to think you’re such an expert.

Poor marketing? What do you call all the product placement, the Surfaces that were given to the NFL to use, all the commercials, the celebrity endorsements, their own physical stores…

Like, what else do you want them to do? Do you even see marketing for any of the other PC manufacturers? Because I sure as hell never do. People want a laptop, they walk into a Best Buy and see what’s there and buy one. That’s it. Hell I can’t even remember the last time I even saw an ad for a Macbook. Marketing may mean something with mobile, but not with laptops anymore.

Xbox was nothing until the 360. It was basically laughed at the whole first generation (I had one btw). It only started to see any decent numbers (which you could define as success I suppose) near the end of it’s cycle. Not to mention, no competition! It was basically a 3 man race in console land (2 at that point since the Gamecube was an even bigger flop – a deciding factor for anyone looking for a Playstation alternative, certainly helpful to the Xbox).

You can’t say the same thing about laptops. Which is why your comparisons are bad. Obviously the Surface line isn’t going to be as much as a huge seller as it could if there are 30 other companies selling laptops and convertibles.

You think people aren’t buying Surface Pros because they don’t want them? You really think if someone is in the market for a hybrid, they are not even going to consider a Surface Pro? There are obviously other factors at play, and I’m willing to bet pricing is one of them.

Also, I still feel most consumers still want laptops when they think Windows. MS just released a laptop. Give it time to become successful. I think it will surpass the Surface Pro line personally. It will be their ‘breakout success.’

One of the most important aspects of marketing along with product placement and commercials, are the price points.

By the way GameCube sold 21 million units Xbox sold 24 million. So it’s nonsense to say it was ever only a 2 man race. Both of those consoles sold relatively equal and paled in comparison to PS2. Similar to when Wii demolished its competition last generation and the two more powerful consoles were neck and neck with much lower sales.

Well then I guess the original Xbox was as much of a flop as the Gamecube then. Kind of proves my point.

Consider the following:

  • Microsoft avoided building a laptop or pc of any kind for most of their history when they easily could have.
  • When they did enter the productivity space, they did so cautiously – the original Surface from 2012 was positioned as an iPad competitor, not a PC. Crucially, it could not run traditional x86 Windows applications.
  • It’s taken them 5 years since then to actually build a traditional laptop.
  • The new Surface Laptop is the closest competitor to their existing OEMs. It’s also the only device in the lineup that runs Windows 10 ‘S’ by default (i.e. cannot run traditional x86 apps).
  • Pricing of the Surface line starts at $799 for the basic Surface Pro, $999 for the Laptop, $1,499 for the Surface Book, and $2,999 for the Studio. The bulk of the PC market is around $299-$799.

You don’t avoid building a laptop for decades, then when you eventually do price it at the premium end of the market and hobble its ability to leverage your built up app ecosystem if you’re just trying to sell the most hardware you can.

Microsoft is in reality treading a fine line between cautiously growing hardware revenue, attempting to diversify, and creating halo products – all while trying to avoid cannibalizing existing licensing fees.

All in all, they’re succeeding. Microsoft is rapidly changing the platform’s image from a buggy pack-in OS you get with a cheap, plasticky laptop to a modern, powerful OS that can be paired with genuinely exciting hardware. And capturing an increasing share of the premium, profitable end of the hardware market to boot.

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