Windows’ Last Ditch Attempt to Save a Dying Product
At Mobile World Congress in 2010, Windows made a very shocking announcement: they would release their own mobile OS to compete against Android and iOS, which had dominated the market for so long. In the tech world, a matter of months can be the difference between being considered state-of-the-art and obsolete, but Microsoft was late to the party by a few years. Yet, despite this red flag, Microsoft put its faith into its already enormous user base from the computer industry. The belief was that users of Windows on their computers would welcome a very similar OS on their phones simply due to the fact that they were used to using Windows already. This didn’t happen. Despite having a fairly streamline user interface that actually tied very nicely with the Windows OS on most laptops, the Windows Phone never gained a large enough backing to take off. Within a few months of launch, it was clear that Windows did not have the momentum to break into the market already dominated by Android and iOS (or even put a dent into this market). The question remains: how did such a technology giant fail so miserably?
Let us consider network effects, as we did in lecture. When it comes to how much a consumer is willing to pay for a good, there are two major factors at play: the intrinsic interest in the good (or how much it is actually worth to the user) and the fraction of the population actually using the product. In terms of intrinsic value, the Windows Phone had no problems. With its smooth integration with the desktop OS and streamlined UI, the Windows phone had clear draws for users of iOS and Android. However, the factor that lead to the downfall of Windows was its user base. Considering Windows came into the market several years late, the fraction of the population using neither popular OS that would be willing to shift to Windows was incredibly tiny. This posed two major issues. Firstly, the lack of people using the OS also lead to a small number of developers willing to program apps for the Windows OS. There is a direct benefit to having more users using an OS. Secondly, the lack of users meant that the reservation price was far below the tipping point. Because not enough users invested in Windows OS, those that did felt that they overpaid for the good, making it less likely for new users to invest in Windows.
Despite these issues, Windows continued pumping money into its mobile division, determined to make it succeed. Ironically, Windows has now turned to a new strategy. As reported by Ryan Whitwam in ExtremeTech, Windows 10 will be able to support Android applications. In essence, Windows is trying to gain a large enough user base to push past its tipping point, by leeching off of the current users of Android. Once they break past that tipping point, their user base will grow organically until it hits an equilibrium, so it makes sense for Microsoft to team up with Android despite the fact that they are rivals. If you can’t beat them, join them!
References:
https://www.thurrott.com/mobile/windows-phone/7004/only-android-can-save-windows-phone