Stated in the article, “Rather than creating a premium device to rival Apple and Samsung in the developed world, Microsoft plans to rely on partners to mine emerging markets with budget smartphones.” Microsoft’s CEO stated that the company as a whole wants to stray away from being strictly a software company to a entity that will focus on devices and services more this the mind set of it yielding more market share. Alternatively, it seems Microsoft is afraid to enter an extremely profitable and competitive market. This market is the smartphone market. Numerous companies have tried to take a piece of this plentiful pie but failed miserably. Microsoft will only take this risk if it’s partners jump off the cliff first. “Microsoft recognizes that the cost of creating a premium handset to compete at the high-end of the smartphone market against Apple’s iPhone and the Samsung Galaxy S3 is an enormously expensive and risky proposition.” Moreover, the company feels that investing in a market like this isn’t the best use of the company’s resources so instead Microsoft looks to gain this lost ground in, equally as risky, emerging markets. In markets like these they will be focuses on partners like Nokia to establish this.
Some make think that Microsoft surface may have stumbled but the company intends to build devices when its numerous partners aren’t trying to produce gadgets that resonate with the consumers. Markets like that smartphone market in the U.S are extremely developed markets. Some may think this is a perfect chance for Microsoft to take a dive in but the task of displacing Apple and Google with a Microsoft-made product is near impossible. The game with competing with Google and Apple is one Microsoft just doesn’t want to play.
I thought Microsoft’s plan was an extremely thought out and strategic one. Microsoft will be under the radar in the technology game for just a little bit but then will capitalize on the right technology or gadget at the right time. Competing with companies like Google or Apple is near impossible in an already established market. The only way to win this innovation battle is let them win this “fight” and focus on the “war” or the next mind blowing thing. With Microsoft taking all the focus off this market they can truly succeed in a new market and get there before Google and Apple. At the end of the day, it started with Microsoft. Lastly, I feel the quality of Microsoft’s products are on the line if the company attempts to come out with a smart phone because customers are extremely picky about products like these
Questions to consider
1. Is Microsoft making the right choice by taking a safe route and losing market share?
2. How much market share could Microsoft actually capture come Apple and Google?
3. Are there any emerging markets that Microsoft has missed or do you know of any they could capitalize on in the future?
4. How is Microsoft managing its quality?
February 2013 Smart Phone Market Share
Google’s Android: 51.7%
Apple’s iOS: 38.9%
10 thoughts on “Why Microsoft isn’t so hot to enter the Smart Phone market”
This article made me think about Blackberry. It was released, a few months ago, that they would no longer try to improve their phones because they felt that they could not grow any market share that was dominated by Apple and Google. With Apple and Google already being the two innovative, leaders of technology, I can understand where both Blackberry, and Microsoft come from. It wasn’t too long before Blackberry reconsidered their decision, because they have just recently released a new phone with competitive features they usually don’t have, such as touch-screen, updated applications, and more. I have been hearing a lot of good things about this new “Blackberry”. Who knows how the phone market will shift now? I just hope Microsoft does the same, because their phones have great potential, in my opinion. It just sucks that so many consumers are too brand loyal to consider something that could possibly be better.
In today’s volatile economic times emerging markets such as Brazil, China, India, and Russia are some of the most prosperous, and I think that targeting these markets where the smart phone industry might be less competitive is a smart move for Microsoft. Although I think that it would be interesting to see a Microsoft phone to rival the iPhone and S3, it is not necessarily the best move for Microsoft to make. Even though the Xbox was a very successful product, I still do not think that people think of Microsoft as a device-driven company. Possible rebranding is still needed to change this reputation, yet I would be curious to know how consumers view Microsoft in the targeted emerging markets.
I agree with you in the fact that if Microsoft wanted to enter an already competitive market with Apple and Google they would get squashed. Android phones have a hard enough time keeping up with the Apple phones. Sure their are consumers that love Microsoft products, but switching plans and or devices may be the main problem for Microsoft not striving. Microsoft’s rep is completely on the line. If they come out with a product that is completely garbage consumers will always remember the first smart phone they made and feel as the proceeding ones may not be at great. Microsoft should just stay with the gaming consoles they are very successful with and possibly revamp their computer line before they enter the smart phone market.
I think it is very smart of Microsoft to decide not to enter the smartphone market. It find it respectable of any company that not only pushes itself to be better but when it knows its potential and its strengths and weaknesses. It takes a lot for a reputable company to admit that they CANNOT penetrate a certain market right now because of the competition. Also, I am not sure if I am the only one that thinks this but, I think we have reached the height of innovation when it comes to smartphones. I am not saying that there can be no improvements made but unless a phone can magically transport smells or something, I will not be looking for the next groundbreaking smartphone (hence why the Iphone 5 didn’t have as many takers as expected).
I think Microsoft is very smart for learning from Blackberry’s mistake. Blackberry spent a lot of money and resources trying to create the next best smartphone and failed. If Blackberry couldn’t penetrate the market, why would Microsoft even try? Instead, Microsoft did they right think by stepping back to search for a market that wasn’t being fulfilled. If they can listen to the needs and wants of people in this market, I’m positive Microsoft can come out with a revolutionary product that can change the industry forever. As a result, Apple and Samsung might become jealous.
I think Microsoft is making the right decision. There is no chance they can compete with Apple and Google in developed markets like the US. In my opinion, it will be easier for them to chip away at Apple’s market share abroad. Apple devices have high mark-ups and people are beginning to lean towards phone’s that are nearly as good as the “best” ones but half the price. Google however, has numerous different phone’s to work with, of which can be found at the high-end and low-end of the smartphone market.
I think the windows mobile operating system is in its infant stages. It hasn’t had time to develop into something that is as likable and well-functioning as Android or iOS. At the same time, the number of apps available for windows phones is still small. If people cannot get the apps that they love to play with on their phones, then why should they move to that phone?
I would have to agree with the summary and all of the above comments about how Microsoft is too young and less well-known of a company to try and produce a product that can compete with Apple and Samsung. Although Microsoft is well-known by the public for their computer systems, their phone publicity is minimum. If and when they decide to compete with the most wanted phones, Microsoft will need to take their time and get their name acknowledged with a popular phone that’s “hot” on the market. Someone above mentioned how if the company really listens to the consumers and made what they actually wanted then they may have a higher chance of competing; I completely agree with this statement. I also never thought about the blackberry phones and how they tried to promote their phones. Microsoft can really learn from their mistakes and expand on the successful decisions that blackberry made.
I also agree that Microsoft should steer away from this market. It costs a lot of money, time and resources to try to make the next best product and if they are considering to sell it at a budgeted price they will not make any money. And again Google and Apple dominate this market already so I agree that it is risky to enter the already established market. Windows tried to enter another established market with the iPad recently and the Microsoft Surface has been doing alright but not as good as Microsoft wishes. I have played around with the Surface and it is pretty cool but there are things that needs to be worked on and it just doesn’t exceed the Apple iPad. With such brand loyalty that Apple has it is hard to get consumers to try something new unless it is amazing and at the same time affordable.
I believe Microsoft is making the right decision here. The first windows phone that came out was extremely unprofitable for them. The cost to compete in this industry is enormous and would cost them more than they are willing to spend on an investment that may actually be another failure. I believe a better strategy in this situation is to wait for a new technology market to come out and try to compete in that market. It would be much easier to join in on a market that is fairly new rather than to try and catch up on a market that is already extremely well developed and dominated by two major players. In conclusion, it would most likely be a better idea to try and enter a under developed market as mbator stated above.
I do believe that Microsoft should play it safe here. Yes there is a lot to win, but also a lot to lose. They are a young company when it comes to smart phone operating systems and have a lot of ground to cover if they want to release their own smart phone to compete with Apple, Samsung, and Google. They should focus on partnering with smart phone manufacturers and perfect their operating system, but even there, Microsoft has a lot of ground to cover to win a favorable market share.