Windows Phone news
The internet is all over the board on this one, with some claiming that Windows Phone is dead, others claiming it is anything but and everything in between. I'm actually surprised that the Platform could even garner this much attention. I still think just about everyone is getting it wrong though.
Firstly, the bad news, Microsoft IS investing less in the platform. Killing several thousand more jobs from that division and reducing the product line can be seen only as just that. And, any reduction in investment or even serious structural changes indicate that people aren't happy and believe something is wrong. And that leaves the door open to continue to downside.
Beyond that however, things aren't all that bad. Firstly, they are STILL making phones. While no one seems to be able to agree on the exactly the right number of phones they should release in a given year, everyone seems to agree that they had too many. So, in that respect, part of the bad news doubles as good.
Next, people tend to look at Lumia's 95%+ share of the market and look at this as MS throwing in the towel. THEY ARE STILL MAKING PHONES. Until we see what the new lineup is and what price points it hits, and more importantly how well they sell, there is no reason to believe that they can't maintain that saturation with a reduced set of handsets. Yes, cutting some price points will lose some customers. But as a percentage, will it really be all that bad? We don't know yet.
And, as I've said in the past, each unique phone has an overhead cost. And splitting efforts also drives up cost per phone and makes decisions harder for potential customs. While it is possible that reducing the lineup to 6 phones could drop them to, say, 50% of the market share, and yet result in them being more profitable than they were at 95% with the larger number of devices. And, at the moment they seem committed to both value phones and flagships, so it still seems unlikely that their share of the market will drop even that low.
I've also argued before that flagships are more important to the platform anyway. And with Lumia phones dominating the low end and there not being a large enough market for high end phones they were killing of hardware partners. Losing some of the market in the low end could allow partners a place to sneak in and add some diversity to the platform.
I still think a Surface like approach with no budget devices on a smaller scale of production makes the most sense. Higher profit margin phones in smaller batches will make it easier to provide good looking financials, promote the platform in a more exciting fashion and pave the way for your hardware partners to dole out the bulk of the phones. And, if demand is there, increase production and reap the rewards.
Firstly, the bad news, Microsoft IS investing less in the platform. Killing several thousand more jobs from that division and reducing the product line can be seen only as just that. And, any reduction in investment or even serious structural changes indicate that people aren't happy and believe something is wrong. And that leaves the door open to continue to downside.
Beyond that however, things aren't all that bad. Firstly, they are STILL making phones. While no one seems to be able to agree on the exactly the right number of phones they should release in a given year, everyone seems to agree that they had too many. So, in that respect, part of the bad news doubles as good.
Next, people tend to look at Lumia's 95%+ share of the market and look at this as MS throwing in the towel. THEY ARE STILL MAKING PHONES. Until we see what the new lineup is and what price points it hits, and more importantly how well they sell, there is no reason to believe that they can't maintain that saturation with a reduced set of handsets. Yes, cutting some price points will lose some customers. But as a percentage, will it really be all that bad? We don't know yet.
And, as I've said in the past, each unique phone has an overhead cost. And splitting efforts also drives up cost per phone and makes decisions harder for potential customs. While it is possible that reducing the lineup to 6 phones could drop them to, say, 50% of the market share, and yet result in them being more profitable than they were at 95% with the larger number of devices. And, at the moment they seem committed to both value phones and flagships, so it still seems unlikely that their share of the market will drop even that low.
I've also argued before that flagships are more important to the platform anyway. And with Lumia phones dominating the low end and there not being a large enough market for high end phones they were killing of hardware partners. Losing some of the market in the low end could allow partners a place to sneak in and add some diversity to the platform.
I still think a Surface like approach with no budget devices on a smaller scale of production makes the most sense. Higher profit margin phones in smaller batches will make it easier to provide good looking financials, promote the platform in a more exciting fashion and pave the way for your hardware partners to dole out the bulk of the phones. And, if demand is there, increase production and reap the rewards.
Comments
Post a Comment