Kill Windows mobile before buyers finish the job themselves
Posted: 2013-09-05 16:29
Steve Ballmer gets his $7 billion man.
Very interesting read:
Very interesting read:
...if the incoming Microsoft CEO doesn't have a clear plan for reviving Windows mobile, that executive should consider killing it off, before consumers finish the job themselves.
Evidence of that includes the latest price cuts for the company's Surface line of computer tablets, made permanent last week, and Ballmer's own admission that Microsoft made too many of the devices.
But with the proposed acquisition of Nokia's mobile device business, Ballmer may have re-hired the company an executive who gives it the best chance at reviving its fortunes in the consumer device market - if that person can make some difficult but necessary choices.
Nokia CEO Stephen Elop had been on a fast career track at Microsoft before Nokia hired him away three years ago to try to reverse its market share losses to rival devices made by Apple Inc., Samsung and others.
At Nokia, he did what should have been done years before: dramatically reduced the company's operating costs via massive job cuts; and restructured the Finnish giant to shift its product development efforts away from its own mobile software, called Symbian.
None of that helped much, though, as Nokia's share of the smartphone market fell to a niche-like 3% in the first half of this year, down from the same period in 2010, just before Elop arrived.
During that same time, Apple has taken most of the profit out of the U.S. mobile device market, thanks to its iPads and iPhones, while Google has taken control of two-thirds of the global mobile market, thanks to its free Android software.
Nokia missed out on the explosive growth in the smartphone market because of Elop's biggest mistake during his CEO tenure there: choosing to make the company's devices run on the mobile version of Micrsoft's Windows operating system.
Ballmer helped seal that deal by paying for billions of dollars worth of Nokia's marketing costs, an agreement which many Nokia employees and developers saw as a sellout to the software giant.
Yet the move also bought Elop some time - and solidified his position as a friend of Microsoft.
Now, Ballmer brought Elop back as head of devices and services within weeks of saying that Microsoft needs to be more of a device and services company.
So who at Microsoft looks more suited to run that business, if not Elop?
The problem with that question for Microsoft shareholders is that whoever is named its next CEO is going to face a difficult choice.
The first painful alternative would be to spend billions of dollars more on mobile software development, in an attempt to take on both Android AND iOS devices.
Yet both Microsoft and Nokia have a poor track record over the last three years in their attempts to compete for mobile consumers. And that massive investment in software would suppress profit margins.
A second option might be better in the long term. That is, to focus only on hardware, slash thousands of jobs, and leave the mobile, consumer version of Windows on the dustbin of history.
Elop has proven that he can do exactly that by firing thousands of workers and abandoning Symbian as a smartphone platform.
But would he have what it takes to abandon Windows as a mobile OS - even with its dismal track record - when so many jobs and vice-presidential fiefdoms in Redmond depend on it?
The consumer market has been sending that signal for several years now, as iOS and Android have taken over the world of smartphones and tablets, while Microsoft and its partners have failed to generate any market excitement outside of Xbox gaming software.
Ballmer, too busy evangelizing about Windows to hear that very loud message, is now on his way out.
Elop now looks like the favorite inside candidate for the job.
Either way, if the incoming Microsoft CEO doesn't have a clear plan for reviving Windows mobile, that executive should consider killing it off, before consumers finish the job themselves.