Microsoft Corporation (NASDAQ:MSFT) is in trouble in the smartphone market and it needs the Surface Phone to save its ship from sinking. It is no longer news that Microsoft missed the mobile revolution when it focused all its energy on the PC market. The firm has tried getting a foothold in the smartphone market with its Windows phones and its ill-fated purchase of Nokia. Of course, the firm wrote off its Nokia expense and it has killed its Lumia line of Windows phones.
Microsoft has consistently maintained that the death of the Lumia line doesn’t mean its (the firm) exit from the smartphone market. Of course, the firm has refused to reveal its plan for staying relevant in the smartphone market and it has deflected questions about its smartphone plans to the HP Elite X3. Interestingly, there’s no shortage of rumors and ‘leaks’ on the Richmond’s firm plan to build a Surface Phone. This piece seeks to explore why Microsoft must launch the Surface Phone and fast, if it wants to remain relevant in smartphone market.
Microsoft Windows Mobile OS is almost dead
Microsoft’s Windows Mobile OS operates at a distant third behind Apple (NASDAQ:AAPL)‘s iOS and Google’s Android OS. The latest market report from Gartner however suggests that Microsoft is only struggling to score a toehold presence in the global mobile market. Gartner’s report on worldwide smartphone sales to end users by OS in 4Q16 shows that Android OS now has an 81.7% market share. Apple’s iOS has a 17.9% market share. Microsoft’s Windows Mobile OS has a measly 0.3% market share.
Microsoft (NASDAQ:MSFT) is losing market share in the global smartphone market at an alarming rate. In Q4 2015, the firm had a 1.1% market share; hence, its current 0.3% market share. In Q4 2016, OEMs sold Android 353M devices, Apple sold 77M iOS devices, and Microsoft only sold a measly 1.92M devices.
The rumored Surface Phone can however help the firm halts its alarming decline in the global smartphone market. Rumors about the Surface Phone suggests that the device will come in three variants to appeal to the Enterprise, Premium consumer, and mid-level consumer markets.
CEO, Satya Nadella has also revealed that he wants the Surface Phone to be the “ultimate mobile device“. He notes that he is not planning to build another run of the mill smartphone. In his words, We don’t want to be driven buy just envy of what others have… What can we bring? That’s where I look at any device form factor or any technology, even AI.”
When can we expect the Surface Phone?
The Surface Phone appears to have the makings of an incredible smartphone that could improve the fortune of the firm in the global smartphone market. The problem however is that the firm has refused to confirm or deny any of the rumors about its plan for the Surface Phone. The rumor mill once submitted that the Surface Phone will debut t this year’s WMC but the device ended up being a no-show at the event.
Microsoft (NASDAQ:MSFT) needs the Surface Phone if it wants to remain relevant in the smartphone market. Yet, the fact that the firm hasn’t been able to articulate its plan suggests that Surface Phone might be suffering from an ‘expectation paralysis.’ Microsoft wants the Surface Phone to be a game changer and its fear of making mistakes seems to be stalling the debut of the device.