Why The Windows Phone Failed

Summary

The video script recounts Microsoft's missteps in the smartphone market, beginning with their skepticism towards the iPhone in 2006. It details the company's initial confidence in Windows Mobile, the subsequent rise of iOS and Android, and Microsoft's delayed response with Windows Phone 7. The partnership with Nokia and the eventual acquisition of their smartphone business are highlighted, culminating in the failure of Windows 10 Mobile. The script underscores the importance of timely innovation and integration of hardware and software in the competitive smartphone industry.

Takeaways

• 📱 In 2006, Microsoft dominated the smartphone market with their Windows Mobile platform, but failed to anticipate the iPhone's impact and potential success.
• 🤔 Microsoft's initial skepticism towards the iPhone was based on its high price and lack of a physical keyboard, which they believed were crucial for business customers.
• 🔄 Steve Balmer, then Microsoft CEO, dismissed the iPhone's potential, considering it too expensive and not suitable for business use, reflecting a broader industry underestimation.
• 📉 Microsoft's denial of the iPhone's potential led to a significant strategic misstep, as they continued to focus on Windows Mobile devices rather than innovating to compete with the new touch interface trend.
• 🚀 Apple's focus on convenience and user experience with the iPhone proved to be more valuable to customers than the technical specifications that competitors emphasized.
• 📈 The iPhone quickly gained market share, surpassing expectations and becoming a major player in the smartphone industry, outpacing companies like Palm and Microsoft.
• 🆕 The introduction of Android by Google provided another major competitor in the smartphone market, further challenging Microsoft's position.
• 📉 Microsoft's delayed response and reliance on outdated strategies led to a significant decline in their market share as they failed to keep up with the rapidly evolving industry.
• 🤝 Microsoft's partnership with Nokia was an attempt to revitalize their smartphone efforts, combining forces to create new mobile products.
• 📉 Despite some positive reception, the Windows Phone platform struggled with app ecosystem limitations and compatibility issues, alienating both developers and users.
• 🏁 Microsoft's acquisition of Nokia's smartphone business and subsequent releases like the Lumia 950 failed to gain significant market traction, ultimately leading to the discontinuation of their smartphone efforts.

Q & A

Which company dominated the smartphone market in 2006, just before the release of the iPhone?

Microsoft dominated the smartphone market in 2006 with their Windows Mobile platform.

What was the initial reaction of Steve Ballmer, then CEO of Microsoft, to the iPhone's introduction?

Steve Ballmer dismissed the iPhone, stating it was too expensive and lacked a keyboard, which he believed was essential for business customers and email functionality.

Why did some people, including companies, initially doubt the iPhone's potential success?

Some people doubted the iPhone's success due to its high price, lack of a physical keyboard, and the fact that it had similar functionalities to other smartphones at the time but at a much higher cost.

What was Apple's goal for iPhone sales in 2008?

Apple's goal was to capture 1% of the worldwide market share in 2008, which meant selling 10 million iPhones.

How did the introduction of Android by Google impact the smartphone industry?

The introduction of Android provided a new mobile operating system designed for touchscreen smartphones, offering an alternative to iOS and giving other manufacturers the opportunity to compete in the touchscreen smartphone market.

What was the significance of the iPhone 3G in terms of its price and international release?

The iPhone 3G was significant because it was the first model released internationally and was more affordable than the original iPhone, starting at just $199, making it accessible to a larger customer base.

Why did Microsoft struggle to gain traction with their Windows Phone 7 operating system?

Microsoft struggled because they were late to the modern smartphone OS market, had an underdeveloped app ecosystem, and faced competition from established platforms like Android and iOS. Additionally, they had issues with carrier support and hardware limitations.

What was the Nokia Lumia 800, and why was it considered a significant product for Nokia and Microsoft?

The Nokia Lumia 800 was a smartphone that essentially ran Windows Phone 7 and was considered significant as it represented the strategic partnership between Nokia and Microsoft, aiming to combine assets to develop innovative mobile products.

Why did Microsoft's acquisition of Nokia's smartphone business ultimately fail to revive their position in the smartphone market?

The acquisition failed to revive their position due to continued issues with app ecosystem development, an inconsistent and buggy operating system, and the strong competition from entrenched players like Apple and Android devices.

What was the final decision Microsoft made regarding their smartphone hardware business, and what did Steve Ballmer admit about their strategy?

Microsoft decided to no longer sell or manufacture new Windows 10 mobile devices, effectively ending their smartphone hardware business. Steve Ballmer admitted that Microsoft would have had a stronger position in the phone market if they had integrated hardware and software sooner.

Outlines

00:00

📱 Microsoft's Misstep in the Smartphone Market

In 2006, Microsoft, with its Windows Mobile platform, was the smartphone market leader. The unveiling of the iPhone was met with skepticism, especially by Microsoft CEO Steve Ballmer, who dismissed its high price and lack of keyboard as significant drawbacks. However, the focus on convenience and user experience, which were initially underestimated, proved to be crucial. Microsoft's initial denial of the iPhone's potential success and their continued development of Windows Mobile devices with physical keyboards became their first big mistake, as they failed to adapt to the new direction of the industry, which prioritized touch interfaces and user experience over traditional business-oriented features.

05:03

🚀 The Rise of Android and Microsoft's Delayed Response

Google's introduction of Android in 2007, a mobile OS designed for touchscreen smartphones, marked a strategic move to capitalize on the emerging market shift. Microsoft, however, continued to focus on business customers and physical keyboards, missing the opportunity to lead the smartphone revolution. The release of the iPhone 3G in 2008 further solidified Apple's position, while the first Android device, the HTC Dream, also hit the market that year. Microsoft's strategy remained stagnant, and their market share began to shrink as they failed to recognize the importance of a unified hardware and software approach, which Apple had already mastered.

10:05

🔄 Microsoft's Struggle to Compete with iOS and Android

Microsoft's late entry into the modern smartphone OS market with Windows Phone 7 in 2010 was met with a positive initial response due to its innovative Metro interface and improved user experience. However, the platform suffered from a lack of app availability and a disjointed strategy that failed to convince carriers and manufacturers to adopt Windows Phone over Android and iOS. The high licensing fee for Windows Phone and the absence of popular apps like Instagram and YouTube further hindered its adoption. Microsoft's struggle to compete was evident in the market share statistics, with Apple and Android dominating while Microsoft's share plummeted.

15:05

🤝 Microsoft and Nokia: A Partnership in Decline

In an attempt to accelerate their smartphone strategy, Microsoft partnered with Nokia in 2011, aiming to combine their assets and develop innovative mobile products. The Nokia Lumia 800, released in 2011, was well-received for its design and features but was not available in the US market due to disagreements over 4G LTE support. The partnership faced challenges as the smartphone market had already matured, with customers firmly choosing sides between iPhone and Android. The Lumia 900, despite positive reviews, could not overcome the flaws in Microsoft's operating system, which failed to provide a smooth upgrade path for existing users and lacked a compelling app ecosystem.

20:06

📉 The Downfall of Microsoft's Smartphone Ambitions

Microsoft's acquisition of Nokia's smartphone business in 2013 marked a desperate attempt to regain market share, but it was too late. The release of the Microsoft Lumia 950 in 2015, running Windows 10 Mobile, was criticized for its downgraded design and underdeveloped app ecosystem. The decision to not allow upgrades from previous Windows Phone versions to Windows Phone 8 and later Windows 10 Mobile alienated loyal customers and developers. By 2016, Microsoft's market share had dropped to 0.4%, and in 2017, they announced the end of their smartphone hardware efforts, signaling the failure of their smartphone strategy.

Keywords

💡Smartphone Market

The smartphone market refers to the industry encompassing the production and sale of smartphones. In the video, it is highlighted as the competitive landscape where companies like Microsoft, Apple, and Google vie for dominance. The script discusses how Microsoft dominated this market before the iPhone's release, and how Apple and Android later reshaped it.

💡Windows Mobile

Windows Mobile was Microsoft's operating system for mobile devices prior to the iPhone era. The script mentions it as the platform that dominated the smartphone market in 2006, emphasizing its significance before the advent of iOS and Android.

💡iPhone

The iPhone is a line of smartphones designed and marketed by Apple Inc. The video script details the iPhone's introduction as a disruptive technology that changed the smartphone market dynamics, with its innovative design and user experience, ultimately outpacing competitors like Microsoft's Windows Mobile.

💡Steve Ballmer

Steve Ballmer was the CEO of Microsoft during the period covered in the script. His dismissive attitude towards the iPhone's potential success, as quoted in the script, is highlighted as a significant misstep that contributed to Microsoft's later struggles in the smartphone market.

💡User Experience

User experience (UX) is the overall experience a user has while interacting with a system, in this case, a smartphone. The script underscores the importance of UX in the success of the iPhone, which prioritized convenience and a seamless interface over the traditional business-oriented features of smartphones at the time.

💡Market Share

Market share represents the percentage of the market a company holds in its industry. The video discusses the shift in market share among smartphone companies, particularly noting Apple's ambitious goal to capture 1% of the worldwide market and its eventual rise to a significant share.

💡Android

Android is an operating system developed by Google for touchscreen smartphones. The script describes Android's rapid development and release as a response to the iPhone, which positioned it as a major competitor in the smartphone market, eventually capturing a significant market share.

💡Nokia

Nokia is a Finnish multinational telecommunications, information technology, and consumer electronics company. The script mentions Nokia's partnership with Microsoft and the development of the Nokia Lumia series as a strategic move to compete in the smartphone market against iPhone and Android devices.

💡Lumia

Lumia was a line of smartphones from Nokia, running on Microsoft's Windows Phone OS. The script discusses the Lumia series, particularly the Lumia 800 and 900, as Microsoft and Nokia's attempt to regain market share in the smartphone industry, despite facing challenges such as app ecosystem limitations.

💡Windows Phone 7

Windows Phone 7 was Microsoft's mobile operating system, introduced as a successor to Windows Mobile. The script points out the initial positive reception but also the critical issues, such as the inability for users to upgrade to subsequent versions, which hindered its long-term success.

💡Market Strategy

Market strategy refers to the methods a company uses to compete in its industry. The video script illustrates Microsoft's evolving market strategies, from its initial confidence in Windows Mobile to its partnership with Nokia and the development of the Lumia series, in an attempt to compete with the iPhone and Android.

Highlights

In 2006, Microsoft dominated the smartphone market with their Windows mobile platform.

Many expected Microsoft to compete aggressively with Apple's iPhone after its 2007 reveal, but they didn't.

Steve Balmer, then Microsoft CEO, dismissed the iPhone as too expensive and not appealing to business customers due to its lack of a physical keyboard.

The iPhone's initial price of $499 was significantly higher than the average $200 smartphone, causing skepticism about its success.

Apple's focus on user experience and convenience with the iPhone was a key differentiator, similar to their earlier success with graphical interfaces in computers.

Apple set a goal to capture 1% of the worldwide mobile phone market by selling 10 million iPhones by 2008.

By June 2008, Apple announced they had sold 6 million iPhones, on track to meet their market share goal.

In 2007, Google introduced Android, recognizing the shift towards touchscreen smartphones.

In 2008, Apple launched the iPhone 3G at a much more affordable $199 price point.

By 2009, Windows mobile's market share had shrunk from 14% to 9%, while iPhone and Android gained ground.

Microsoft introduced Windows Phone 7 in 2010, which was well-received but criticized for its lack of security features and business focus.

Microsoft's strategic partnership with Nokia in 2011 aimed to boost their smartphone presence by using Windows Phone 7 as Nokia's primary OS.

The Nokia Lumia 900, launched in 2012, received positive reviews but struggled against established iPhone and Android devices.

Windows Phone 7 users were unable to upgrade to Windows Phone 8, causing frustration among customers.

By 2016, Microsoft's smartphone market share had plummeted to 0.4%, leading to their exit from the market.

Transcripts

in 2006 just one year before iPhone the

company that dominated the smartphone

market was Microsoft with their Windows

mobile platform so naturally when iPhone

was revealed many expected Microsoft to

compete with apple aggressively and

protect their Market position but what

turned out to happen was one of the

biggest missteps in modern tech

[Music]

history when iPhone was originally

revealed many people were impressed by

its new technologies but there was also

a substantial amount of what you might

call haters I remember a couple of my

friends in high school saying no one

will want an iPhone since it'll get

fingerprints all over the screen and as

silly as that sounds today many

companies were equally as skeptical

about iPhone's potential success in fact

listen to what then Microsoft CEO Steve

Balmer had to say Steve let me ask you

about uh the iPhone and the zoom if if I

may The Zo uh was getting some traction

then Steve Jobs goes to macor and he he

pulls out this iPhone what was your

first reaction when you saw

that

$500 fully subsidized with a plan I said

that is the most expensive phone in the

world and it doesn't appeal to business

customers because it doesn't have a

keyboard which makes it not a very good

email machine now it may sell very well

or not I you know we have our strategy

we've got great Windows mobile devices

in the market today we you can get uh a

Motorola Q phone now for

$99 it's a very capable machine it'll do

music it'll do uh internet it'll do

email it'll do instant messaging so I I

kind of look at that and I say well I

like our strategy I like it a lot that

denial was Microsoft's first big mistake

although it's much easier for us to

recognize it looking back at the time

not having a physical keyboard on a

smartphone seemed as silly as not having

a keyboard on a laptop and the price of

iPhone was much higher than usual at

$4.99 or about

$756 today with inflation it was 2 and 1

half times more than the average $200

smartphone that alone was enough to

question the product's success since no

company had ever charged that much for a

phone no one was sure how many people

could afford it Not only was iPhone more

expensive but it essentially had the

same functionality of other smartphones

if you just looked at a spec sheet

iPhone appeared to be a ripoff one

button One camera no keyboard same email

phone messaging music and internet

features at more than double the price

it's no wonder that people like Balmer

dismissed it but what companies like

Microsoft and blackberry failed to

consider was convenience and user

experience two things that have proven

to be Priceless to customers when done

correctly with computers we went from

command lines and keyo keyboard arrows

to graphical interfaces in the mouse

something that companies at the time

found childish to include on a

sophisticated computer until Apple

proved customers not only preferred it

but would actually pay more for it and

do you know which company was late to

the graphical interface and mouse

revolution of the80s IBM who in 1990 6

years after Macintosh finally introduced

a personal computer with a mouse this

delay gave competitors like apple HP and

Dell time to establish themselves and

steal market share away from IBM

ultimately leading to the company's

Decline and exit from the PC market with

smartphones Microsoft saw a similar fate

they were understandably confident about

their Windows mobile platform and the

devices that ran it but they were in for

a shocking surprise because when Steve

Jobs introduced iPhone he shared a graph

that showed unit sales in 2006 of

various Industries game consoles were at

the bottom at 26 million units while

mobile phones which included basic

feature phones were far in away the top

seller at

957 million and he set a goal for Apple

to capture 1% of worldwide market share

in 2008 which meant selling 10 million

iPhones this was actually pretty

ambitious considering it took Apple 22

years to reach just 5 million Mac sales

in a single Year Steve balmer's reaction

to Apple app's sales goal was again

denial saying there was quote no chance

that the iPhone's going to get any

significant market share no chance so

how did Apple do well at their worldwide

developer conference in June 2008 jobs

announced that apple had sold 6 million

iPhones putting them on track to surpass

that 1% worldwide mobile phone market

share by the end of the year more

impressive was iPhone's worldwide

smartphone market share which stood at

6.5%

by the fourth quarter of 2007 Ty

Motorola for fourth place but the most

shocking statistic of all was iPhone's

us smartphone market share which at 28%

put Apple ahead of palm and

Microsoft unfortunately Balmer never

issued an updated response about iPhone

6s but talk is cheap anyway what

Microsoft really needed to do was

respond with a strategy shift so that

they could compete with what appeared to

be the future of

[Music]

smartphones in November 2007 about 10

months after iPhone's reveal Google

introduced Android a mobile operating

system designed for touchscreen

smartphones the project was conceived

after Google's CEO Eric Schmidt saw the

iPhone and instantly realized the

industry would move in that direction

there was an opportunity for new

companies to to enter the space and

compete and that's what Google did they

aggressively developed Android with a

goal to reveal a nearly finished product

by the end of 2007 that way Google could

begin providing the operating system to

smartphone manufacturers in 2008 but

Microsoft didn't think smartphones

without a physical keyboard was the

future because at the time they were

mainly used by business customers who

Microsoft felt needed keyboards for

email so they continued to develop the

Windows Phone OS for these devices then

2008 arrived which turned out to be a

defining year for the smartphone

industry Apple introduced iPhone 3G

which was the first Model to be released

internationally and it was much more

affordable than the original iPhone

starting at just

$199 the first smartphone running

Android also shipped in 2008 the HTC

dream which was exclusively sold through

T-Mobile in the US and that's an

important concept to understand because

today things are much different you can

buy any phone you want and pretty much

use it on any network you choose but in

the 2000s network carriers had a huge

amount of control over manufacturers and

one aspect of that control was selling

Network exclusive phones that's why if

you bought an iPhone in 2008 you

automatically entered into a 2-year

contract with AT&T this was obviously

beneficial for networks but it was also

good for manufacturers since the carrier

would subsidize or partially cover The

Upfront cost of a phone making it easier

for customers to afford so manufacturers

could sell more phones and carriers

could acquire more users but carriers

don't just choose any phone to

exclusively support they want one that's

likely to be a best seller so when

iPhone started gaining momentum Verizon

and T-Mobile scrambled for a horse in

the touchscreen smartphone race hoping

to achieve the increased user base that

AT&T was enjoying from iPhone so

T-Mobile partnered with HTC since they'd

be bringing the first Android device to

Market in 2008 and Verizon partnered

with Blackberry since they'd already

established themselves as a market

leader and were about to release their

answer to the iPhone the Blackberry

Storm a touchcreen device that delivered

haptic feedback when you touched a

button but Microsoft wasn't part of the

conversation since they hadn't even

released their own phones yet instead

their Windows mobile OS was still being

licensed to third- party manufacturers

in 2008 and those devices were looking

more dated with each passing month by

2009 the smartphone landscape had

changed even more the Blackberry Storm

had been a catastrophic failure costing

the company $500 million so Verizon was

in need of a new partner and seeing as

how T-Mobile had sold over 1 million HTC

Android phones accounting for 2/3 of the

devices on their 3G network Verizon went

all in on Android with the platform

capturing 3% worldwide market share up

from zero the year before meanwhile AT&T

was beefing up their cellular towers to

accommodate the millions of new users

joining their networks with iPhone

worldwide Apple had sold over 20 million

iPhone 3G units boosting their

smartphone market share to 14% up from

9% by the end of 200 2008 but they

wanted to boost sales even more by

introducing iPhone 3GS and disc counting

the previous iPhone 3G from $200 to just

$100 making the device accessible to

millions of new customers Windows mobile

on the other hand had shrunk for the

first time from 14% in 2008 to 9% in

2009 that was a 36% decline in a single

year Microsoft was finally getting the

message bomber himself admitted they'd

quote screwed up with Windows Mobile

smartphone users whether they typed lots

of emails or not wanted a big

touchscreen without a physical keyboard

so they finally got to work on an

operating system to compete with IOS and

Android that would be released the

following year in October

[Music]

2010 now it's important to consider just

how fast the smartphone industry was

moving during this time four years worth

of changes today is less significant

than 4 years years of changes in the

2000s by 2010 Apple was introducing

iPhone 4 a device that was dramatically

different from the original model in

2007 so for Microsoft to be introducing

their first generation modern smartphone

OS 4 years after apple and 3 years after

Google was a huge disadvantage so how

did they do well their release was

called Windows Phone 7 which replaced

Windows mobile 6.5 and users response to

the new software was mostly positive

reviewers enjoyed the new Metro

interface which delivered a fresh clean

look and an original take on what a

smartphone home screen could look like

the virtual keyboard was praised for its

touch precision and accurate auto

correct while the overall responsiveness

of gestures like pinch to zoom and

scrolling were quick and smooth but

there was criticism mainly about

Microsoft's Focus shifting from business

customers to Everyday consumers for

example the industry deleting security

features of previous Windows mobile

operating systems was missing a crucial

oversight that prevented many companies

from adopting Theos plus Microsoft

Office implementation on the phone was

severely lacking with thirdparty office

apps delivering a better experience

these issues made Microsoft's user base

which mainly consisted of business

customers feeling left out it was clear

that Windows Phone 7 prioritized

everyday smartphone users who mainly use

their device devices to socialize and

consume content and that was a good

strategy since there were a lot more of

those customers than business users but

there was one glaring issue many

everyday users had already chosen

between Android or iOS and convincing

them to jump ship for a new operating

system that hadn't yet proven itself was

a big ask but it wasn't just customers

that needed to be convinced carriers and

manufacturers needed persuading too AT&T

was focused on selling iPhone while

T-Mobile and Verizon were selling

Android devices and unlike Apple

Microsoft only had six retail stores at

the time that meant they'd be relying

heavily on carriers to sell Windows

phones to retail customers smartphone

manufacturers like Samsung LG and

Motorola had already begun using Android

on their devices adding a second

operating system to their product lines

only complicated things Plus android

could be used with no licensing fee

whereas Microsoft charged $15 for every

device sold running Windows Phone 7

discouraging manufacturers from

including it on too many of their

products and this is where Microsoft's

plans started to fall apart despite 20

phones running Windows Phone 7 at launch

carriers weren't sure what made them

better than existing Android devices and

iPhones and customers weren't sure

either and fact when you looked past the

shiny surface of Windows Phone 7 there

wasn't much substance underneath

developers had hardly prioritized the

platform with only about 2,000 apps

available at launch compared to Android

which offered 200,000 and iOS which

offered 300,000 in fact some of the most

popular apps weren't even available

games like Angry Birds and social media

apps like Instagram and YouTube were

missing from Windows Phone 7 this came

as a surprise to many customers who

bought the phone through their carrier

only to find out they couldn't use their

favorite apps this resulted in higher

return rates than Androids or iPhones at

carrier stores whose employees were then

incentivized to discourage customers

from buying a Windows Phone 7 device in

order to minimize their storees return

rate not to mention there were problems

with certain device Hardware that

Microsoft had no control over like the

Samsung Focus which was widely

considered the best Windows phone

available at launch but suffered from

issues with its micro SD card slot not

only could users only only insert cards

with specific read and write speeds but

the device had to be reset to factory

settings after inserting a new SD card

which deleted everything on the phone

needless to say customers weren't happy

about complications like these and

Microsoft began to realize something

Apple understood long ago that they

needed to control not only the software

but also the hardware so Microsoft began

to formulate a new strategy that could

turn around their Fortunes in the

smartphone market and reestablish their

dominant

[Music]

position creating a hardware division

from scratch takes time and Microsoft

had no time to waste they were about to

enter 2011 without a formative product

to challenge Android and iPhone so to

FastTrack the process Microsoft decided

to partner with the hardware company

instead and they were eyeing one in

Finland called Nokia that fit the bill

perfectly not only did they create the

Nokia N9 which in gadget called possibly

the most beautiful phone ever made but

one of Microsoft's Executives had just

been brought on as their new CEO giving

the two companies a unique opportunity

at collaboration the partnership was

also beneficial for Nokia who were

having struggles themselves with

software you see the operating system

that ran on most Nokia phones was called

Symbian and it didn't have the advanced

functionality and smooth user experience

that iPhone and Android delivered with

help from Microsoft they'd have access

to a modern operating system so in

August 2011 the two companies announced

their strategic partnership aiming to

quote combine assets and develop

Innovative mobile products on an

unprecedented scale this meant Nokia

would use Windows Phone 7 as its primary

operating system while Services between

both companies would also be merged like

Microsoft's Bing search engine for

search services on Nokia devices

Microsoft ad Center for search

advertising Services Nokia maps

integration with the Bing search engine

and the merging of Nokia's content store

with Microsoft Marketplace the corporate

structure of Nokia also Changed by

separating its mobile phone Division and

reorganizing its leadership to more

closely align with Microsoft's so the

two companies got to work developing a

new smartphone strategy that could

finally take on iPhone and Android who

by this point in 200 11 had achieved 19%

and 48% worldwide market share with

Microsoft dropping to just

1.4% so they needed to release a new

product fast and in November 2011 they

did it was called the Nokia Lumia 800

which was essentially a Nokia N9 running

Windows Phone 7 Nokia's CEO called it

the first real Windows phone

unfortunately it wasn't very real for

customers in the US since theice Dev was

never available there the reason why it

had to do with their partnership with

AT&T the carrier demanded the phone have

4G LTE but Microsoft didn't think it was

a priority so they released the product

they had ready the Lumia 800 in markets

like Europe and Canada then fast-tracked

4G support to be included on the Lumia

900 3 months later in January 2012 but

by that time their phone was being

released into a smartphone market that

had already matured Samsung with their

Galaxy S2 and apple with the iPhone 4S a

month earlier smartphone customers had

spent the last 5 years choosing sides

between iPhone and Android so Microsoft

would have to provide a very compelling

product to win over entrenched customers

so how did they do well the Nokia Lumia

900 was pretty well received at one

cnet's best of CES award while Forbes

called it the best Windows handset yet

Digital Trends said if you're looking

for a good phone for a reasonable price

this is it Gizmodo said the Lumia might

save Windows phone that it's so quick

and elegant and that the screen

absolutely sings many customers were

also happy with the device it was one of

the most affordable modern Smartphones

at just $99 with a 2-year contract its

live tiles offered a practical benefit

over competitor's Frozen home screen

icons and its am OED display measured

4.3 in much larger than iPhone 3.5 in

screen they also loved having a choice

of vibrant colors which matched the live

tiles on the home screen a concept Apple

adopted more than a year later with the

iPhone 5c so the Lumia 900 was pretty

impressive especially considering how

quickly Microsoft and Nokia brought it

to Market but it was undeniable that

certain aspects of the product were

flawed which would eventually lead to

its demise

[Music]

while the hardware of the Lumia 900 and

eventually Lumia 920 were very

competitive its operating system was not

customers who'd purchased a device

running Windows Phone 7 were shocked to

find out they wouldn't be able to

upgrade to the next operating system

Windows Phone 8 this was due to a lack

of foresight at Microsoft when designing

the initial OS they built it on the

Windows C kernel which was never

optimized for modern smartphones it was

bad at memory management letting apps

run in the background instead of

automatically suspending them eating up

valuable CPU cycles and battery power

installing and writing apps was also

cumbersome and complex making it a

difficult platform for developers to

create apps that's why Windows Phone 7

still didn't have Instagram or YouTube

after 2 years and reviewers were quick

to point this out with wired saying it's

not like the store is empty there's more

than 120,000 apps available they just

aren't the apps you want and with apps

being one of the top reasons people buy

smartphones Microsoft wasn't giving

customers what they wanted to remedy

this they wrote Windows Phone 8 on an

updated Windows NT kernel which

dramatically improved multitasking and

allowed developers to easily Port apps

from Windows 8 but again the drawback

was existing Windows Phone 7 users

wouldn't be able to upgrade and this

wasn't the first time Microsoft made

this this mistake back in 2010 existing

Windows mobile 6 users were not able to

upgrade to Windows Phone 7 now keep in

mind Windows Phone 6 came out in 2007

Windows Phone 7 came out in 2010 and

Windows Phone 8 came out in 2012 that

meant you had to buy three different

phones in a 5year span just to run

Microsoft's latest operating system this

was a slap in the face to customers who

took a chance on a Windows phone and it

created Bad Blood between Microsoft and

their most loyal users who were then

more likely to choose iPhone or Android

in the future there was also still

serious issues with carriers

discouraging customers in their retail

stores from buying a Windows phone still

by 2013 Microsoft had actually recovered

some worldwide smartphone market share

jumping from 1.6 to 3% although still

far off from Android's 78% so in

September 2013 Microsoft made one final

push

purchasing Nokia's smartphone business

outright for $7.2 billion marking the

end of Nokia's involvement in the mobile

phone market at the time from then on it

was up to Microsoft to make it work and

as you might expect they didn't the

first phone Microsoft developed after

purchasing Nokia was the Microsoft Lumia

950 released in 2015 it was their first

to run Windows 10 mobile which replaced

Windows Phone 8 and while the device did

deliver some good features many felt its

design was a downgrade it felt less

premium than other Flagship smartphones

and it didn't have the same colorful

charm as previous Lumia models reviewers

criticized its underdeveloped app

ecosystem and buggy operating system The

Verge said Windows 10 mobile felt

unfinished and that its user interface

was inconsistent Microsoft received so

many complaints about the operating

system that they eventually allowed

users to downgrade from Windows 10

mobile back to Windows Phone 8 by 2016

Microsoft's worldwide smartphone market

share had plummeted by

79% making up

0.4% of the market in just 10 years

they'd fallen from the top spot with 34%

of the market to virtually zero the

writing was on the wall as it became

clear to everyone that Microsoft simply

had no future in the smartphone market

in October 2017 Microsoft announced that

they' no longer sell or manufacture new

Windows 10 mobile devices with the Lumia

950 being their last Flagship smartphone

looking back Balmer admitted that

Microsoft quote would have a stronger

position in the phone market today if I

could redo for example the last 10 years

the thing I regret is that we didn't put

the hardware and software together soon

enough so that is why the Windows Phone

f failed I'm Greg with apple explained

thanks for watching and I'll see you in

the next video

[Music]