If Microsoft Could Just Do ONE Thing Right with Lumia/Nokia/Windows on Smartphones

There is an excellent article by John Kirk about a month ago at Techpinions about Microsoft, and how in the past decade or so Microsoft has been the 'antithesis of strategy'. Microsoft have done quite literally the exact opposite of what strategic thinking would suggest. John often quotes from Sun Tzu in that article (and my readers will find some strong similarities to how I analyzed Stephen Elop's strategic blunders at Nokia two years ago using the same methodology). So when sound strategic thinking - consensus over literally thousands of years of writing about warfare has a clear rule 'you should not do this' or 'you should do that' - then Microsoft has done the exact opposite of that - with obviously disasterous results. Nowhere is that more clear than in Microsoft's catastrophic path in mobile.

Just for context, the very latest Strategy Analytics numbers just came out for smartphones Q2, and total Windows Phone smartphone market share (not just Nokia unit at Microsoft but all manufacturers on that platform including Samsung and HTC) is down to guess what.. 2.7%. Yes. 2.7%. Windows Phone on all devices in Q2. Nokia alone on Windows Phone had more than that a year ago this time.... Yes, Windows Phone is in its deathspiral. The Microsoft acquisition of Nokia has of course angered the last remaining 'Windows Phone partners' even more and making Windows Phone OS free will do nothing to change that anger. Those promised 14 new Windows Phone vendors are mostly so tiny nobody had ever heard of them and many of those will never even launch their smartphone on this platform, but they are happy to take Microsoft's money because Microsoft needs desperately the propaganda victories while they are losing the actual battle, badly.

Now, I am the first person to cheer when Microsoft exits the handset space. They have been a disgrace here not unlike they've been the evil empire just about everywhere in the IT space for as long as we've known the brand haha.. But... Lets be fair. If under new CEO Nadella Microsoft could re-invent itself, and become less evil and more normal as an IT company, it is very rich, and very talented, and very experienced and by far the largest software company on the planet. We - as the industry - could use a friendlier Microsoft helping this industry and giving us consumers a choice. It would not be good for the industry for Microsoft to die or disappear. And whlie I write often about how Microsoft lost the big war for the platforms (to Google's Android), Windows has a long life in it still especially driven by its dominating presence on the desktop and on traditional PCs (desktop and laptop PCs) even as Windows has failed in smartphones and tablets.

SO WHAT SHOULD MICROSOFT DO

So lets be fair to Microsoft (haha, that'll be a first on this blog, eh?). What should Microsoft do? I am seeing the advertising by Microsoft/Nokia/Lumia on business-enterprise oriented channels, saying something like 'your next business phone should be a Windows Lumia phone'... and they show a couple of different Nokia Lumia smartphones/phablets and a tablet.

Lets assume Nadella is in charge and not that idiot anti-Strategy buffoon Elop. Elop could not understand strategy if it was shot out of a cannon and redirected towards Elop with the new smart ammunition that can change direction mid-flight. No Elop will not get this. But Nadella will. And those near Elop - who read this blog - will get it of course. If we for ONCE did what strategic thinking suggests, there is a clear path for Microsoft now.

Strategic thinking says, don't attack the enemy where the enemy is strong (and worse, where you are weak). Use your own strengths, attack where the enemy is weak and you are strong. Duh. This is so basic, it makes me weep.

The strongest player in the smartphone industry is... Apple. The iPhone has the highest loyalty. After three years of Lumia failure (most hated new phone on the planet, biggest return rates, highest dissatisfaction levels ever measured) - this is where the enemy is the STRONGEST and where Microsoft/Nokia/Lumia is WEAKEST. It is sheer madness, sheer madness, SHEER MADNESS, for Nokia/Lumia/Microsoft to try to create an iPhon-a-clone. We saw how Elop did this. Nokia before Elop made phones with larger screens than the iPhone. Elop? Refused larger screens, made smaller screens for his first Lumia and over-ruled his Nokia experts that consumers wanted larger screens, Nokia knew this, Nokia had been offering those before. No. Elop wanted the Lumia to be like the iPhone. Nokia had smartphones which had removable batteries - because in most markets where Nokia is strongest, electrical supply is not reliable. Elop wanted an iPhone clone so early Lumia didn't have removable batteries, just like the iPhone. Avoiding Nokia strengths and going against the strongest partner with now weaknesses. So microSD cards? Nokia smartphones had always had removable memory cards until Elop came along, noticed that the iPhone doesn't have those - so he removed that - staple - strength - of Nokia from the early Lumia. Then the best cameras of the business. Nokia had for YEARS been the best camera on any smartphone. Nokia was known for this. But Elop looked at what camera was on the iPhoen and DOWNGRADED Nokia's cameras on the top phones to the Lumia series. He has made this same error again and again and again. Note - Elop made these decisions AGAINST the advice he got from his team at Nokia. He overrruled his best minds on all these points (and many more that i don't now have time to go into).

Then - the customers spoke. And Nokia was forced to reverse those morning Eloppian mistakes. Now the Lumia series has larger screens than the iPhone, includes removable batteries, includes microSD slots, includes better cameras - including the monster 41mp Pureview sensor of Nokia's current flagship.

Those points were all aimed at the consumer market. Some have a significant impact also in enterprise (large screens) but mostly they are consumer-focused features and abilities. The good camera, the removable battery, the microSD card to share data and move data from one device to another. Enterprise IT managers want tight security and these are not high on their priorities.

MICROSOFT STRENGTH VS APPLE WEAKNESS

What is the one area where Microsoft rules over Apple? The Enterprise PC market on the desktop. Apple has been making regular slight gains with the Macintosh into the PC market but most of the gains by the Mac have been in the consumer market, not the enterprise market. 

In the enterprise space, where you find Macs as the PCs are either the marketing DEPARTMENT of any company, or else a company working in the advertising/marketing/media industries. Thats 3% of the enterprise/corporate/business PC market globally. And they are fanatical about their Macs and they clutch their iPhones and iPads and iPods (and probably secretly also still their old Newtons) with fierce commitment. But that is 3% of the enterprise market. Almost all of the remaining 97% of enterprise PC market is not Linux haha... its Windows. Windows on the desktop, Office Suite for the apps, and Windows on the servers.

Here is a smartphone market that is incredibly underserved by dedicated and useful devices. Blackberry used to own this space and Nokia's E-Series was the world's second most used OS in smartphones used by business/enterprise (globally, obviously). Windows Mobile - not Windows Phone - was for years the third leading business platform even as Windows Phone tried to enter that space. Windows Phone was built with business-oriented features and aspects but Windows Phone was a total redesign to target consumers (trying to become iPhone) and failed the enterprise customers so much, that many would continue on the old Windows Mobile platform for long long long.

Apple constantly issues press releases about what tiny victories they have in the enterprise space but the iPhone is incredibly badly suited for the enterprise. To begin with its too expensive at its bottom range, so its good for senior execs but no corporate IT department of a major enterprsise (over 10,000 empolyees) will go iPhone-only (except if serving advertising/marketing/media industries) because they'd then have to buy 600 dollar iPhones for their secretaries etc... They need a platform that also includes smartphones in the below 300 dollar range and ideally below 200 dollars by now. (remember I am talking of unsubsidised prices here, so without contract, and no, they won't be buying OBSOLETE devices that are more than a year old haha, they have to be new, when IT buys new hardware that needs to last years, so last year's iPhone now sold with a discount is no solution for enterprise IT buyers either haha)

In reality Apple's market share in the enterprise sector is single digits. That market is still strongly Blackberry - almost all new Blackberry sales now go to replensh enteprise customers almost all who are looking for some alternative. Nokia's Symbian E-Series had its strong share that was killed by Elop. Some of that did migrate to Windows Phone - usually it is hated, as Windows Phone doesn't even support such basic enterprise computing BASIC needs as VPN haha (something of course Blackberry did, and of course Symbian did, and of course Windows Mobile did). Some are going to Android and finding horrid threats to corporate security now with all the malware and spyware in free apps on Android.

The Enterprise/Corporate market is THE strongest suit for Microsoft. That market is where Microsoft Windows and Office are strongest. That market behaves DIFFERENTLY from the rest of the smartphone market, because it is served by professional B2B sales at the carrier side, and professional equipment BUYERS at the side of the enterprise. So the carrier/operator doesn't care one iota which handset brand is selected by its enteprise customer - if that enteprise sales rep at the carrier/operator gets the next year or 3 year deal from that corporate customer and its 10,000 SIM cards renewed on their network. So if that customer says 'I want the ZTE model Z' and that handset is not officially sold by the carrier/operator, you know what happens? The sales rep says 'ok, I'll get it for you' and next week ZTE gets an order of thousands of model Z smartphones from this carrier/operator... the ZTE salesdude will be thrilled but that is how corporate sales happens. The sale here is the telecoms TRAFFIC and the handset is only the vehicle to get there. 

So this is TOTALLY different from the consumer market where a given in-store sales rep's commission is dependent on those individual handset sales and their commisisons (and fear of returns, etc). So its TOTALLY normal, for a carrier who officially does not sell Blackberry, to actually supply Blackberry to a coupe of its enteprise customers who are Blackberry houses. Totally normal. But you won't find BB on their website or in their stores. This is how enterprise sales works in handsets.

THIS IS AN OPPORTUNITY for Microsoft/Lumia now. The consumer market for Lumia/Windows Phone is dead. It will never come back. The race in the price is so badly skewed against Microsoft - their current lowest price models are twice as expensive - TWICE - as the cheapest Android devices. All their significant partners admit Android is where all the market is - including Nokia until now Nadella shut down the Nokia X Series that ran on Android haha.. Google releases new Android versions far faster than Microsoft can with Windows. Android is far more backwards-compatible than Windows is. Android has a vastly larger app store selection. Android has far more handset makers and all carriers/operators provide Android handsets while many refuse to sell Windows/Lumia at all. Its a total vicious cycle which at every stage causes mroe death to Windows Phone. Its a death cycle.

BUT not in the enterprise. What is the one thing that Enterprise smartphones want? What is the one thing that enterprise-oriented smartphones always have? A full QWERTY keyboard. That is what Blackberry was made with. That is what Nokia did with the E-Series, a whole division that Nokia created to just make Blackberry-clones - with physical QWERTY keyboards either the narrow 'Blackberry' style or the wider full -width 'Communicator' style of folders and slider form factors. 40% of Nokia's smartphones sold in 2010 were ones with a physical QWERTY keyboard !!!! And so far after two dozen Lumia handset models launched, not one has a QWERTY keyboard?????

This again is Eloppian madness and his totally lunatic goal of copying the iPhone, of running away from Nokia strengths and rather going where Nokia is weakest. Nokia INVENTED the QWERTY keyboard smartphone with the original 9000 Communicator !! It was Blackberry who copied Nokia's idea, but did it in a narrow format. There are millions upon millions of loyal Nokia fans who still use their old E7 or other E-Series Nokia smartphones with those excellent QWERTY keyboards that are brilliant for emails and SMS and Twitter and all text entry.

Note how mad this is. Microsoft Surface, the tablet that was supposed to be the super-tablet that kills the iPad, does have a physical keyboard. That is the area where Microsoft is weakest - both in tablets and keyboards (never was a master at either). But with Lumia phones, where Nokia HAS had the BEST keyboards, and Apple iPhone has none Nokia/Lumia/Microsoft refuses to give us one??

LET ME SHOW YOU

So lets go back 3 years, to the last smartphone released by Nokia before the infamous Burning Platforms memo, and after Nokia's best-ever new smartphone launch, the award-winning N8 which even a year later would win all side-by-side comparisons with Elop's first Lumia 'flagship' the Lumia 800. The last really proper Nokia smartphone released that Elop had not had time to damage, was this, the E7 in early January 2011, sold just in time to reach China's gift-giving season, even as it missed the Christmas sales for the Western markets. Note the laptop on the bankground was a full-sized laptop that I had back then my lovely Fujitsu.




So the E7 was an iPhone-sized smartphone but had a larger screen than the then-current iPhone model. Had a bigger camera than the then-current iPhone model. Had almost all of Nokia's normal bells and whistles. It was yes, slightly bulkier than the iPhone or Galaxy but because of the tapered edges, it did not feel really much thicker than the top flagships by the rivals. And its party piece was the best keyboard ever created by Nokia on any phone, far far superior to what Blackberry had, or any other rival at the time like QWERTY versions of Galaxy etc. Note that for consumer type uses, like watching a video, the touch-screen obviously tilted so watching videos was now more pleasant too. So far so good. Now this is the relevant point to 'enterprise' and business customers, especially any CEO of those companies. This is the spirit of 'Communicator' in the E7. Look at this picture and understand what it has:





Yes. The E7 was the first mass-market consumer/enteprise smartphone sold, that had truly full pocket PC functionality so far, that it could connect via HDMI to a full screen (video projector or your plasma screen TV or any PC screen you have. I connected it in this 'laptop replacement concept' to a portable TV that had HDMI in and was battery operated). It could also connect, simultaneously, to USB drives - note, I do not mean that the smartphone can be 'used' as a USB drive - that is what almost all smartphones can do - but yes in 2011, you could take your thumb drive and plug it (via adapter) to this E7 and read all your business files on it, or transfer easily files between your desktop and this magical E7. And then look below the E7, both a full size Bluetooth keyboard and a Bluetooth mouse !!!

Remember this is Symbian so it has all the enterprise-level security features starting with VPN of course. And thanks to Elop earlier in his career when he still worked at Microsoft, of course Nokia E-Series had full Office Suite softare and compatibility, so all Microsoft software runs out of the box. This was THE solution to go capture the enteprise market. A

This was commercially available by Nokia E-Series in January 2011? This was the holy grail. This was what almost every highly-mobile executive dreamt about every night packing the carry-on bag for tomorrow's business trip. If only I could do it all with my smartphone and connect all the peripherals to it, including keyboard, including mouse, including high def screen and USB memory. This is Nokia competence in the enteprise three YEARS ago. Why hasn't Elop shown this concept to the world? Why hasn't he bothered to do this ever since his Lumia was failing in the consumer market? Microsoft owns the enterprise space. But the enterprise-oriented smartphone concept STARTS with a phone that is optimized for enterprise and that means it starts with QWERTY keyboards...

If you take this set-up to your corporate enterprise buyer today, and show what Nokia's E7 was able to do 3 years ago, it is still impressive today. How easy would this be to now update by Nokia/Microsoft/Lumia/Windows ???? (well, obviiously the early version of Windows Phone couldn't even support bluetooth keyboards far less a mouse and as Symbian of course was able to, Elop decided to kill Symbian instead, to help crash Nokia smartphone sales. He even stopped sales of Nokia's own Bluetooth keyboard - because yes, Windows Phone didn't support it, but Nokia's current enterprise customers on Symbian based E-Series loved that keyboard,,,)

MY SUGGESTION

My suggestion is, that Microsoft Lumia unit rush two devices with QWERTY keyboards to augment the Lumia line. One a genuine flagship, 6 inch screen and large physical slider-keyboard with the big 16mp camera etc... Top of the line specs but also the slider keyboard. Take the E7 form factor and update it. This prototype has to exist in Nokia's designs. They could rush this to the market before Christmas. It would be the rebirth of the Communicator. Price this as THE most expensive smartphone on the market! Say 800 dollars or 900 dollars. This is NOT for you and me who live on a budget. It is the Mercedes S Series that the CEO gets and it doesn't matter what it costs. Its for that guy who walks into the phone store and says simply - give me the most expensive phone. THAT phone. What the Communciator always was for Nokia. Priced far above the iPhone. Far more expensive than the iPhone because on every technical detail and aspect, it is better (and Microsoft will of course argue that the software now with Windows Phone 8.2 or whatever, is also supposedly better than the iPhone haha). Make it ridiculously expensive so that just its price is a shock and helps create buzz about Microsoft's flagship Lumia device. And ensure that this model, selling a couple of million units will actually be profitable to Microsoft's Lumia unit.

Then do the 'karvalakki' cheap version of the above. A mid-price smartphone Lumia with 5 inch screen, 8mp camera, mid-specs, and still the full slider QWERTY keyboard. The 'lite' edition of the Communciator for the enterprise. The boss will want the top model with all the bells and whistles - like a Mercedes S series, and the mid-managers get the cheaper Mercedes model... This is the big seller. It should sell 5 million or more. The 'Junior Communicator' costing maybe in the 300 dollar range. This is the main engine of returning the Lumia unit to profits, as this becomes Microsoft's best seller, as most who aspire to own the amazing full Communicator, will settle for this junior model instead, with its reasonable price. This is the phone bought in bulk by enteprises, and only VP's get the full Communicator.

The two QWERTY mdoels are THE logical versions to include into the Lumia series for Microsoft now, because they ALREADY have that same strategy with Surface. And because Nokia ALREADY has this competence in-house. Because Nokia already has the exact physical components and competence from the E7 (and N950). This is what Nokia management pleaded for with Elop month after month, year after year, and Elop simply overruled them out of his total strategic ignorance. Elop preferred to abandon Nokia strengths and go where it is weakest, and against the rival who is strongest.  

Today if Nokia released a new pair of Lumia smartphones with slider form factor and full QWERTY keboards, they would be CREDIBLE in the enterprise segment and some consumers would give this Lumia line another look as well. Note - for the enterprise, the glaring faults HAVE to be fixed (like no VPN haha) on the software side. Make this a top priority now, and by year-end Microsoft could have a mild hit prodiuct on its hands, and could start to see some mild recovery to its smartphone business.

Note, ALL rivals in the enterprise space are weak and confused and do not offer a competitive product. MIcrosoft can come and own that space. It is far less than 10% of all smarttphones sold by now, and its share keeps shrinking but it is a HEALTHY niche and Microsoft must understand, Windows Phone can never become a mass market product, if they want it to become profitable and contribute to MIcrosof'ts strategy, its only path now is to become a niche OS that targest the enterprise. 

Go where you are strongest (enterprise). Serve them with what they desperately beg for - QWERTY keyboard high-end super smartphones with full-size touch screens too, what Apple the strongest rival will never give them. Use the assets you have that are the strongest (enterprise sales, handset design and components for QWERTY slider form factor). DUH....

This is the logical thing to do. Elop is the wrong guy to run this. The next VP who will replace Elop will OF COURSE do this as the last desperate act. The underlings below Elop ALL KNOW the strategic sense of this action, but Elop blocks them. Hey you at Microsoft - just go talk to Nadella or send him a note about this or send Nadella to come read this blog. This is so obvious but the ONLY reason it hasn't happened at Nokia is Elop. He has said in public he has overruled his underlings on this (and the other things too). This is the MOST obvious thing Microsoft HAS to do, but Elop wont' do it. So its time for Nadella to overrule Elop so that this Lumia unit can generate SOME profit contribution to Microsoft and will not be shut.

Was I correct in predicting original Lumia was designed to fail, and the original models could not sustain 1 to 1 transition from loyal Nokia smartphone owners on the old Symbian system (which everybody agrees was no longer competitive). So even as the old Symbian system was not good, the new Lumia smartphones on Windows Phone failed to even hold that share. Then was I correct in predicting Windows Phone version 8 will not fix the problem either. Was I correct that Nokia had to get to its strengths and return the parts that Nokia always had in the past - the big screens, even bigger than now larger new iPhone screens. Cameras even better than the newer better iPhone cameras. And yes, removable batteries, microSD slots, and the other things I clearly requested from Xenon 'real' flashes to haha, such basics as inward-facing second cameras... DUH. Nokia had all these before Elop deployed his mad ideas. 

Now what happened when these things WERE deployed onto the Lumia line in 2013? The sales stabilized, as I suggested it would. It is not growth yet, but the rot was ended. Then, as I said back in 2013, the need was to get the loss-making unit back to profitable. I have been 100% correct in every fault I identified in Elop's mad strategy, and Nokia has vindicated me, that by doing those things, it has found that sales stability that for the past 5 quarters, Nokia's smartphone business has recovered from the bottom level of 6.1 million units per quarter, and now been living in a steady range between 7.1 million and 8.8 million for 5 quarters in a row. (note Microsoft's newest quarter only had 2 months of Lumia sales so when adjusted for 3 months, it is in line with this, at about 7.7 million smartphone sales). I know this industry and I have a clear track record as the most accurate forecaster of Nokia. This is the OBVIOUS strategy for Microsoft which Microsoft WILL do, either now with Elop in charge or by the guy who replaces him, because it is the STRATEGICALLY right thing to do. Go where you are strongest, and the enemy is the weakest. Enteprise smartphones at the top end, with flagship QWERTY slider-format touch-screen superphones that would be worthy of the 'Communicator' name back when that name was the gold standard for the ultimate CEO superphones used by princes and kings and billionaires proudly on the planet.

And if you want your QWERTY project to totally fail today, you do a Blackberry narrow keyboard wasting half of your phone size on the keys so the screen is tiny. Or you do the 'enteprise' phone only in the lowest end of the market without the flagship so this is always seen as the janitor's phone that nobody will want. No. It has to be as Nokia always did it when the E-Series grew every single year until it had taken a third of the global enteprise market till 2010: you have you flagship super CEO model ('Communciator') on the top like the E7 was in January 2011, and then have cheaper variants for mid-level business users. Because this strategy produced 40% of Nokia's profitable smartphone sales in 2010, and enterprise business customers still today 3 years later beg for those type of smartphones - this is something Microsoft has to try, the moment it gets a sane executive in charge of the Lumia unit, who understands what is strategy.

People argued before on the first Lumia that screen size didn't matter, or camera didn't matter or removable battery didn't matter etc. Now those all came into Nokia Lumia series and the sales collapse halted and has become stable. When the two QWERTY models will be released by Microsoft-Lumia (and they will, either by Elop now or his successor) they will be so obvious 'hits' that everybody says 'of course' just like now they try to say the large-screen Lumia was 'of course' what Nokia had to do, or the 41mp Pureview camera (from Symbian) was the obvious thing to do, etc... This is OBVIOUS and Microsoft will do this before they shut down the Lumia unit for good. The next guy will of course try it, because all the logic dictates that Microsoft has to try it - they ARE doing this with Surface for gosh's sake!

Ok. I've said my piece. I am not an expert on Microsoft in the same way that I am or have been an expert on Nokia. But it wasn't my article who suggested that Microsoft has consistently selected the 'anti-strategy' option and thus caused incredible damage to its business. Its time to try the correct strategy for once. If this strategy is 'dumb' - Microsoft can find out in one hour. Make ten phone calls. Call its biggest enterprise customers and ask would they want this. They all will say yes, the majority will say if you do this and the Lumia is as good as the E7 was, they will BUY ON THE SPOT. The E7 was the ultimate Blackberry-killer which Elop killed literally three weeks after it had phenomenally successful launch in China, the world's largest smartphone market. (Elop didn't kill the E7 specifically, just all Symbian based smartphones with his silly memo).

What is there for Microsoft to lose. The consumer space is lost. The incredibly costly strategy of going where you are weakest, and with that against the enemy who is strongest - this total 'anti strategy' path has been proven to yield a world-record collapse in the market. Microsoft just fired half of its Nokia staff. Isn't it now time to try something truly logical, strategically sound, go where you are strongest Microsoft, combined with where Nokia is/was strongest, and attack where the strongest enemy is weakest, and where other enemies are all weak. Time for two QWERTY slider Lumia phones (finally, after I have been begging for these for three years!!!) But what do I know haha...   :-)

Comments

[Winter]

@RottenApple
"These may all well be honest efforts to get away from Microsoft, but so far it hasn't mattered much - and that's not due to MSFT lobbying, that's mostly because the vast majority of customers has no interest in these things."

So, it is the victims fault?

There is this old joke: "I get sick and tired from all those customers asking for X. Day in day out I have to tell them we do not sell X because there is no demand for X."

@RottenApple
"As for clouds et.al., sure. The cloud is everything. God lives in the cloud. The thing is just: For many things the cloud is impracticable. "

Like, Office365?

@RottenApple
"To be honest, I am sick and tired of everyone preaching the virtue of The Cloud. You can't just offload all the computing to server farms somewhere else in the world and expect it to work."

You mean, like Google search and Gmail? Or, say, Office365?

The point of the Cloud is that it offloads maintenance to an online company. Because, you know, people cannot maintain their own computers.

@RottenApple
"No, the desktop world belongs to Microsoft and it'd require a major scale earthquake to change that. "

Like, say, people moving away from computers to using phones and tablets for their work? Could happen, you know.

[RottenApple]

@Winter:

You are weird. If Microsoft fails it's because the market was against them. If they win it's because they are corrupt. In reality, it's the same both ways. The forces that keep them out of Mobile are the same that keep everyone out of the desktop market. Thinking differently is delusional.

"Like, Office365?"

Yeah, gods like that one. :D

"You mean, like Google search and Gmail? Or, say, Office365?"

As I said, the cloud isn't everything. As a direct conclusion, serious working machines are not going to disappear. The fact that some low data tasks can be done in the cloud doesn't change that simple fact.

Try running a C++ compiler from an online directory, for example.

"Like, say, people moving away from computers to using phones and tablets for their work? Could happen, you know."

SOME work, that's very limited. There's still a lot left that's never going to be done on mobile or the cloud, like, for example, software development. You need fast turnaround times here, which require a powerful stationary computer.

Again, as a direct conclusion of this very simple and obvious fact, desktop computers are not going to disappear any time soon. Even Tomi admits to that, if you read his recent blog. So all the doomsaying is nonsense of people who don't have a clue. The market will shrink, for sure, because in the past even mundane tasks that can easily be done on a tablet or mobile phone had to be done on a desktop/laptop. And this inflated portion of the market will indeed go. The rest is still large enough for making a comfortably profitable business.

[winter]

@RottenApple
"The rest is still large enough for making a comfortably profitable business."

No one claimed anything different. But MS are in the tens of billions at 80% margin. A comfortably profiyability will not be enough.

And the desktop market is shrinking in absolute numbers. All not good oomens.

[Simon]

Microsoft doesn't have the technology to make a sucessful "Enterprise" phone, because I don't think that there is any more than a tiny niche market for Enterprise phones. No one wants to carry two phones, which means that any phone must support apps for banking, brokerage, angry birds, etc..

That CEO buying his "Mercedes" phone is going to return it within a week when he finds that the game app he wants to play isn't available, or his brokerage app isn't available (or the Windows version of the app is much less usable than the IOS version he was used to), or even his kids can't play the game they like on it. Microsoft can't solve that problem before Christmas.

I know that many people foolishly think that higher price always equates to higher quality, but the quality problems with Windows Phone run far too deep for such people to ignore.

[RottenApple]

@Winter:

"No one claimed anything different. But MS are in the tens of billions at 80% margin. A comfortably profiyability will not be enough."

They'll have to learn to accept their place in the new scheme of things eventually. Those good days are over and as the market shifts they need to adjust.
As I said before: They are bound for a major shrinkage, that's completely inevitable and if they don't accept this inevitability they'll go down the drain with all their futile efforts.

"And the desktop market is shrinking in absolute numbers. All not good oomens."

Yes, it's shrinking - not because it's dying but because it's expelling the bloat and waste that doesn't need a full desktop. What's left is the power users that really need their computer for serious stuff - better treat them seriously and not as an afterthought!

[Vitali]

"Windows Phone was built with business-oriented features and aspects but Windows Phone was a total redesign to target consumers (trying to become iPhone)..."
Seems to be typo? (1st Windows Phone)

[R]

I disagree that Microsoft has been weak in keyboards. Microsoft has a well-respected hardware division that churns out models ranging from the basic, utilitarian Wired Keyboard 200 to the swoopy Sculpt Ergonomic Desktop. It's not a big revenue generator, but it has its fans.

[Spawn]

http://finance.yahoo.com/news/why-microsoft-stop-producing-surface-224932886.html

"Microsoft's Surface Business Has Lost An Estimated $1.7 Billion Since Debut"

"Surface is one, not growing sales; two, losing money; and three, not creating a market, what’s the point ultimately?”

Now that's only Surface. Add the billions spend during Nokia including the marketing, human resources and results plus the billions when taking over Nokia plus the billions in the future.

There is no single reason to not shut down devices as soon as possible but many reasons to do.

[EmmanuelM]

Hi Toni,

I agree with you that Microsoft should focus on the Enterprise market which is its 'sweat' spot and stop trying to do what Apple is doing better than them...

Regarding the keyboard thing, I have to say that I *loved* my E7 at the time (and also my E61i) but in 2014 you have large screens (5 inches) and smart auto-completion features which makes touch based keyboards now very pleasant to use.

One thing I would like to ask you is to have your view in a blog entry on what Nokia should do to re-enter the mobile market ? Which general approach (smart phones ? tablets ? internet objects ?) Which OS ? Which differenciators ?

Thanks for the writing this very relaxing read in this vacation period :-)

Cheers from Paris
Emmanuel

[AtTheBottomOfTheHilton]

Microsoft actually had 15% of the mobile market with their Windows Mobile (WM) operating system but they killed it. Talk about shooting your foot off. WM was sort of the opposite strategy of Windows Phone (WP). WM incorporated many parts of the Win32 architecture and programs for Windows could ported to WM with a small effort. There was even less effort porting .Net programs to WM. WM was popular among the corporates and had several models, including the popular SonyEricsson Xperia X1 and X2. The Xperia X1 and X2 had a slide out keyboard just like the Nokia E7.

Then the capacitive touchscreens came with Apple and the UI if WM was not adopted for this kind of input. What I think they should have done is to put a lot of efforts in adopting the UI of WM to touch input rather than to remake everything. Instead they decided to base their new WP on a failed product (Zune). This led to that they lost the corporate customers as well failed to get into the consumer market. With the Nokia E7 example by Tomi, it is clear that if Microsoft has continued on their WM path it would have been much easier to create the example setup than with WP. WM also have many features that WP still lacks today.

The story of Microsoft is similar to the story of the dog who sees his reflection in the water and loses his bone trying to get the bone in the reflection.

[RottenApple]

@AtTheBottomOfTheHilton:

I doubt it. WM had lots of the same problems as Symbian and Blackberry, i.e. it was a crusty old platform from another generation that just had outlived its usefulness. I have developed software for it and it was a nightmare. The compiler was garbage (and highly incompatible with desktop Windows(!), the systems were unstable and so on and so on.

Granted, Microsoft could have done something better as a follow-up, but had they stuck to WM they wouldn't be in a much better position today. I think Blackberry tells us that lesson quite clearly what happens if you bet your future on outdated software.

[tomR]

One weakness of Microsoft products is that Office is not really frequently used:
http://news.techworld.com/security/3514565/microsoft-office-applications-barely-used-by-many-employees-new-study-shows/