Windows Phone: a product with so much potential
that had everything going for it, and yet one that failed spectacularly. Despite the billions of dollars and the priceless
connections of Microsoft, the Windows Phone never took off and would go down in history
as one of Microsoft’s most expensive mistakes. In this video, we’re gonna look at the reasons
behind its failure and the actions Microsoft could’ve taken to possibly prevent it. This video is brought to you by Dashlane. Keep your passwords safe and strong across
all your devices by registering with the link in the description. When Steve Jobs announced the iPhone in 2007
he took the smartphone world by storm. Well, how do I scroll through my list of artists? How do I do this? I just take my finger and I scroll. Up until then, smartphones had a big problem:
they had small screens with interfaces that were hard to navigate, and the reason for
that was because half of the phone was occupied by a keyboard with tiny buttons you could
hardly press with any precision at all. What Steve Jobs showed to his extatic audience
was a game changer, but it wasn’t just Apple fans there were watching. The engineers at Google, which for the past
two years had been building a smartphone of their own, had to scrap their entire project
and to start over with a touchscreen design. Their final product, Android, would arrive
more than a year later, at which point the iPhone had taken the smartphone crown. The iPhone’s model was built on exclusivity:
it was entirely produced by Apple to establish maximal control over the user experience and
the quality of the product, which allowed Apple to charge a premium for their phones. To succeed Android would have to adopt a different
strategy: instead of going for exclusivity, Google tried to be everyone’s friend, partnering
up with as many phone manufacturers as possible with the selling point of their phones being
the fact that they were cheap, yet functional. For a time, the smartphone world was in balance,
with Android and the iPhone occupying very distinct segments of the market. And yet, this balance would soon be disturbed
by another tech giant, Microsoft. Now, out of the three companies, it was actually
Microsoft that had the most experience with mobile devices. Back in 1996 Bill Gates unveiled what he called
the handheld PC, which was really more of a tiny laptop. I’ve asked Tom McGill from the Windows CE
group to join me on stage and give us a quick glimpse of some of the neat things that are
built into the handheld PC. For those of you that might not have seen
one yet, Bill talked a little bit about the handheld PC and this happens to be the Casio
unit actually. The Casio unit is typical of the handheld
PC, so it’s got a physical keyboard, a 480x240 2 bit per pixel screen, IR, PC card, upgradeable
RAM, 2 AA batteries. So this is a pretty typical handheld PC. The operating system it ran was known as Windows
CE, which was basically Windows 3 modified to function on the lowest specifications possible. Over the next decade, Microsoft would add
features and develop this product line extensively, making another 6 full releases. Between 2006 and 2008 Microsoft’s mobile
devices claimed a 15% market share, greater than any of their competitors except Symbian
by Nokia. But this success is exactly what blinded Microsoft
to threat of the iPhone. When Steve Ballmer, the CEO of Microsoft at
the time was asked about the iPhone his reaction, well, let’s say it hasn’t aged very well. Steve let me ask you the iPhone and the Zune
if I may. Zune was getting some traction and Steve Jobs
goes to Macworld and 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. What’s even more priceless, however, is
the frankness of the next question. How do you compete with that though? He sucked out a lot of the spotlight in the
last few weeks because of what happened at Macworld, not only with the iPhone, but with
the new iPod. How do you compete with that, with the Zune? Right now, well, let’s take phones first. Right now we're selling millions and millions
and millions of phones a year. Apple is selling zero phones a year. Notice the stark difference between the two
men: the reporter very clearly sees the innovations of the iPhone as a threat to the old smartphone
establishment, but Microsoft’s CEO can barely look past the sales numbers. And just in case you’re thinking he’s
an exception, the CEOs of Blackberry and Palm were equally skeptical of the new iPhone. It took Microsoft a full year of declining
market share to finally realize that something had to be done. Unlike Microsoft, Blackberry’s sales were
still increasing, which gave them a sense of confidence they never recovered from. Now as they say, it’s better late than never
and when Microsoft finally got around to it, their development was actually pretty fast. Microsoft began developing a touchscreen based
mobile device in late 2008 and it took them only two years to get it ready for market. What Steve Ballmer unveiled was indeed a very
unique product whose advancement of smartphone design isn’t really widely recognized, but
it should be. At a time when the iPhone and Android were
stuck with static icons, the Windows Phone gave you tiles with live information. Overall, critics had much to praise: in terms
of design the Windows Phone user experience was right up there next to Apple and because
Microsoft had very strict requirements for the hardware used by phone manufacturers,
all of the early Windows Phones were very powerful machines for their time. And yet, Microsoft ran into a big problem
very early on. You see, Microsoft was trying to do something
very difficult: it was emulating Apple in trying to establish strict control over the
user experience and hardware, but unlike Apple it wasn’t actually making its own phones. This approach made the Windows Phone a very
refined product, but the degree of control Microsoft wanted made working with them much
more difficult for phone manufacturers compared to working with Android. Unsurprisingly, most phone manufacturers decided
to partner up with Google, which left Microsoft in a very bad position: it had a great product
and no one to make it. The only saving grace for Microsoft was a
lucky connection: when Nokia replaced their CEO in September 2010, the new guy, Stephen
Elop, was a former Microsoft executive and the first item on his agenda was to try to
restore Nokia’s declining market share by abandoning Symbian and pivoting towards Windows
Phone. Now, you can tell that this was a very premeditated
plan because this massive transition, during which Nokia completely changed their product
offerings, happened in the span of a single year. Nokia started selling their first Windows
Phone in November 2011 and I can tell you right away that this was possible thanks to
the billions of dollars Microsoft poured into Nokia as “platform support payments”. Nokia was supposedly paying Microsoft a licensing
fee, but in reality it was actually getting $250 million back from Microsoft every quarter,
which more than made up for their expenses. Of course, the other phone manufacturers knew
that this was happening, which pushed them even farther away from Microsoft. After all, why would they fund their own development
and pay a licensing fee to Microsoft, when Nokia was getting it all for free? Effectively, Microsoft had gone all in with
Nokia and there was no going back. But sadly for Microsoft, it was far too late. By the time Microsoft solved its production
issue, four years after the introduction of the iPhone, it had fallen to a 2% market share. Nobody was developing applications for the
Windows Phone and why would they, considering that Android and iOS were clearly the winners
here. For its first three years, the Windows Phone
App Store was empty: it didn’t have Instagram, it didn’t have YouTube, it barely had anything. By 2013 the stock price of Nokia had fallen
by 75% at which point angry shareholders were threatening to just fire Stephen Elop and
get rid of Microsoft altogether. In the end, that didn’t happen: Microsoft
instead just purchased Nokia’s mobile phone division for $7.2 billion in 2014. Here’s the funny thing though: the very
next year Microsoft wrote off their investment for $7.6 billion, and then to top things off
they fired almost 8,000 employees. Microsoft kept Windows Phone on life support
until October 2017, but it was clearly dead a long time before that. And yet, it’s easy to imagine the different
path Windows Phone could’ve taken had it only not been as greedy with its original
philosophy. Had Microsoft been willing to compromise on
its control over production, it would’ve easily convinced the big manufacturers to
use Windows Phone instead of Android. After all back then Google had practically
no ecosystem to speak of, while Microsoft had been a software titan for decades. There’s a lesson to be learned here about
the importance of compromising in business, but there’s one sphere in life where you
shouldn’t compromise and that is keeping all your passwords secure. Luckily for you, with Dashlane managing your
passwords is a breeze. Dashlane can generate strong passwords and
can store them safely across all of your devices, automatically filling them in when you need
them. Dashlane is available on every popular desktop
and mobile device, and it would’ve even been available on Windows Phone if Microsoft
hadn’t screwed it up. On top of managing your passwords, Dashlane
also offers a VPN for every one of your devices, and it also monitors the Dark Web to make
sure your data hasn’t been leaked by hackers. You’re probably catching my drift here,
but Dashlane really is great. So great, in fact, that I’m gonna give you
a free trial of Dashlane and 10% off their premium service if register using the link
in the description. Use the code ‘businesscasual’ to get the
discount. Anyway, thank you for watching. Make sure to like, subscribe, leave a comment,
check out both my Skillshare classes (I just released a new one) and we’re gonna be seeing
each other again in two weeks. Until then: stay smart.
There's a lot that this video doesn't touch on too much like the app gap, strong arming by Google, the push to Silverlight, or the development fee for Windows Phone early on. Pretty much the crass YouTube analysis I expect from most channels now. This video would have to be at least 30 minutes to take even a cursory look at those topics plus what it covered.
Honestly, I don't care anymore... I'm sad that it didn't keep going, easily my favorite platform but I had to finally give it up not too long ago and now I'm stuck on shitdroid
Apps are everything for mobile phones. At the end of the day Windows phone just didn't have the apps. That's the only reason I swapped out my 950XL. The OS was terrific, loved it.
Apps. That is the ONLY thing that could have saved it. Period. End of discussion.
The only reason that Windows Phone failed is because they got into a pissing contest with Verizon and every single Verizon sales person recommended an Android or iPhone.
I sincerely believe that Microsoft didn't agree to the revenue sharing split and Verizon, like any business, pushed people to their more lucrative profit margin on other devices.
Once sales figures showed up, developers ignored Windows Phone.
True fans know the history. A lot of you don’t think Windows Phone 7 was the first version of Windows Phone.
Die hards:
We suffered through Windows Mobile 6.1 which was supposed to be an answer to the iPhone.
We suffered through Windows Mobile 6.5 which was yet another failed answer to the iPhone (Android was a hot mess during this time period). New Start Menu which we could scroll and was finger friendly.
We get Windows Phone 6.5x minor upgrade to 6.5.
Finally we get Windows Phone 7, nice new interface and is die hards are told we must get new devices because our devices couldn’t support Windows Phone 7 which was a utter lie. Windows Phone 7 ran the same outdated kernel as Windows Mobile. Forced us to get new devices, which was awful.
Then we get a pathetic update to Windows Phone 7. I can’t remember if it was Windows Phone 7.5 or something like that, and told that will be the last update to Windows Phone 7 and we must get new devices to get Windows Phone 8. Screw that.
Didn’t even go over the App Store debacle. The Zune usage which they took away for no reason.
I loved the OS and it ran like a dream, even on low end devices. So it was definitely the apps.
Oh wow - I haven't checked this sub in ages and we're still having this discussion huh?
I feel so sorry for you guys. It is such a disgrace how MS fucked it up so bad. Not just for the existing users but also for how boring and bad the android/ios hegemony is. And for many other reasons. MS had so much potential with a third, new OS and their really good interface.. such a shame.