Apple and Microsoft’s quarterly earnings reports over the past week underscore the chasm between these two companies in terms of market share and consumer use of their mobile devices.
How big a chasm?
Apple sold 61 million iPhones this last quarter, while Microsoft sold 8.6 million Lumia phones. And while they’re not really direct competitive devices, Microsoft Surface sales were up for the quarter at $713 million while Apple sold $5.43 billion worth of iPads, and even though that’s down 29% over the previous years that’s… still… $5.43… BILLION… dollars.
The chasm is huge.
To be clear, Microsoft is still the dominant leader of desktop and laptop usage at 91.5% share compared to Apples roughly 7.2 % share, but the huge lead in mobile means developers think less and less about writing apps for Windows Phones, and without apps, you don’t really have a place in the market.
Microsoft recognizes this, and is doing several things to try to both gain traction in mobile, as well as continue it’s success in desktops and laptops. Will they succeed? That’s very unclear, there are a lot of “if’s”. This very well could be Microsoft’s last shot at mobile, and it may be too little too late, but looking at what they are trying to do gives us an idea both of where they are heading, as well as how computing may look in the future.
Let’s take a look at the “if’s”:
#1: If One Operating System Across all Types of Devices Really Works:
As I wrote in my earlier post “The iPad Pro, It’s About Time“, up until now Microsoft, Apple and Google have had different operating systems for phones/tablets vs laptops/desktops. For Apple they have iOS for iPhone and iPad and OS X for MacBooks and Macs, for Google they have Android for phones and tablets, and Chrome for netbooks and Microsoft has had Windows Phone for phones and Windows for laptops, desktops and, with Windows 8, now Tablets.
Historically there have been huge underlying hardware reasons for having separate operating systems primarily around processing horse-power, screen size/capabilities and power/battery life. However, with the current evolution of technology, the gaps between these are narrowing and it’s technically possible to have the same underlying operating system run across phones, tablets, laptops and desktops.
With Windows 10 releasing later this year Microsoft is attempting to do exactly that, and even extend it to game consoles like the Xbox, wearable’s like the Hololens, and even down to small computers that will connect our homes, cars and devices.
Why? Well certainly there are efficiencies for Microsoft in not having to develop and maintain different operating systems, but also for software developers and Apps companies, which we’ll discuss below, and also, hopefully, for consumers.
While technically one operating system could span all these devices, the key question is does it deliver a good experience for the consumer across all of them? Does the operating system “adapt” to the different screen sizes and ways we interact differently across devices including things like touch vs mouse/keyboard?
In computer terms this is actually called an “adaptive user interface” or “adaptive UI” for short . With Windows 10 Microsoft is working on making the operating system “adapt” across phone, tablets, laptops, desktops and more, and is delivering tools to help developers create apps that adapt to the different device types people use.
But there’s a big “if” here in how successful this will be. Certainly with Windows 8 on tablets the answer has been mostly “no”, and it’s even detracted from the previously strong adoption of Windows 7. Can Microsoft make this better with Windows 10? We’ll see.
#2: If Writing One Version of a Program Can Really Work Across Desktops, Laptops, Tablets and Phones:
One of the promises of a common operating system across different types of devices is that it greatly simplifies the work for Apps companies and software developers. With different operating systems, even from the same tech company, it means software companies and developers are required to do extra work for each of the devices they are writing for. And while Apple, Microsoft and others work hard to deliver tools to help minimize this, there is still duplicate effort required.
So if say, Bank of America wants to write an app for both the iPhone and the MacBook there is a percentage of the work that is unique to each device/operating system, so the development efforts, number of developers required and costs are all higher. But if there are enough customers on any given platform the cost is justified to reach those users.
Nirvana in this area would be the ability to write one application/program that could run across desktops, laptops, tablets and phones with little to no additional work being required. By writing say an app for laptops, and it also (almost) automatically generated a version of the app for phones, it would greatly reduce the cost and effort.
With Windows 10 Microsoft is attempting to do exactly this by enabling developers to write apps that run universally across different device types. And, in fact, Microsoft calls these “Universal Apps” and is going to great lengths to educate developers on how to write them.
This is the key strategy Microsoft is betting on to try and re-gain traction in mobile. At less than 4% market share for Windows Phone there’s simply not a big enough customer base for many software companies and developers to worry about. But if developers who are writing apps for Windows desktops and laptops can easily get tablet and phone versions with little to no extra effort then support for Windows 10 Mobile could draft off of those efforts and momentum could begin to build.
But again there is a big “if” here in how successful this will be. Attempts at universal app tools and environments have been attempted before. And it’s not clear that phone specific apps would necessarily have a laptop/desktop counterpart, but it’s probable in many cases like Facebook, Twitter, etc. Can Microsoft make this better with Windows 10? We’ll see.
#3: If Developers Really Haven’t Abandoned Microsoft’s Mobile Efforts:
There has been a lot made in tech circles over the past few months about companies such as Chase, Bank of America and a few others removing Apps they had written for Windows Phone from the Windows Phone Store. Many have claimed this marks the death knell for Microsoft in the mobile phone and tablet space, and it may very well be, but let’s take a deeper look.
To understand this you must first understand how Microsoft works with it’s enterprise and business customers as well as it’s software partners and developers.
These business customers are not, by choice, in the tech industry but technology is one of the key tools, and key expenses, required for running their businesses. And, as such, they want to predict and manage those costs and investments, and require road-maps and explanations of future directions from their technology providers. So Microsoft briefs these customers 12, 18 even 24+ months ahead of when technology is delivered on the coming changes and what that means.
Similarly, Microsoft works with software developers early in the product process so they can get ready for new products, and evolve their own software and services, to meet the coming changes in technology.
With Windows 10, Microsoft began briefing business customers and software developers over a year ago. They began readying them for the transition, educating them on the new operating system that would span devices from phones, to tablets, to laptops to desktops, the new development environment, and yes, the fact that Windows Phone as an operating system would be replaced.
So, put yourself in the shoes of say the team responsible for writing apps for Bank of America, or Chase. You have multiple teams working across not only Apple, Google and Microsoft platforms, but across the 2 different operating systems each of these companies provide. So you arguably have up to 6 different teams, or at least up to 6 different development efforts underway, and all of the associated costs.
Microsoft briefs you 6-12 months ago and explains that the while the App you have written for Windows Phone will still work on Windows 10 on mobile devices, the new “Universal Apps” you write for Windows 10 will work across all devices (phones, tablets, laptops, desktops). You look at Windows Phone’s current market share of < 4% and make the decision that you’re better off pulling your current app and ending support for it and consolidating your investment in the new Universal App approach.
And, uniquely in the most publicized cases of Chase and Bank of America, there are the additional underlying factors impacting the largest institutions in the financial industry coming out of the great recession. As part of their bail-outs they now have new cost-to-investment/reserve ratios. These institutions are now under even more pressure to reduce costs, which is why we’ve seen B of A and Chase dramatically slashing the number of physical branches they have, so it’s not overly surprising they are looking to reduce their software development costs, or at least consolidate them.
Given this, it’s hard to put too much stock in these two companies in particular pulling their apps, and it’s possible they, and others are instead investing in Windows 10 universal Apps that we’ll start to see being released later this year.
But again, there’s a big “if” here as well. Do the recent actions of Chase, B of A and a few others mean an overall abandonment of Microsoft Mobile efforts? Not necessarily. Does it mean their investing in new Universal Apps? No guarantees, but the promise of the efficiencies of Universal Apps on Windows 10 means there’s a much higher likelihood they are working on apps that will be available on Microsoft mobile devices in the Windows 10 timeframe.
So there’s Microsoft’s play in trying to recapture momentum in mobile devices and some of the “if’s” that will impact their success:
– An operating system that spans device types
– Universal apps that run (well) across those devices with minimal incremental effort by developers
– A re-kindling of interest from apps developers in supporting that strategy
Microsoft certainly isn’t placing a single bet; rumors exist that Microsoft will announce support for the ability to run Android apps on Windows devices potentially opening up millions of apps for the platform, and they’re investing heavily in making all of their own apps and services available across Apple, Google, and Microsoft based devices.
But there’s no doubt, Microsoft would love to regain relevance as a mobile operating system, and while this may not be the last shot, Windows 10 and the strategy above is certainly Microsoft’s last best shot at doing this.
clarkb... 