Why Windows Phone isn’t going away anytime soon

Windows Phone Market Share Analysis

No sane person would argue that Windows Phone is a powerhouse in the mobile world, because it’s clearly not. However, I think that BGR contributor Tero Kuittinen takes things too far when he says that Windows Phone’s failure to gain traction in the United States, China and other key markets means that we’re seeing the “death knell” of Microsoft’s mobile platform. There are a lot of reasons for this, but the biggest one is that Microsoft simply can’t afford to ditch Windows Phone unless it wants to get out of the software platform business all together.

When Microsoft outlined its grand vision for the future during its Build conference earlier this year, one of the most important projects it unveiled was a new development platform whose aim is to make it incredibly easy to develop apps across multiple platforms, including PCs, smartphones, tablets, wearable computers and even the Xbox One. We’ve also read reports that Microsoft’s Windows 9 will essentially be one platform that adapts itself across multiple device types so that it serves as a desktop interface on laptops and as a mobile interface on smartphones.

Rightly or wrongly, Microsoft is investing considerable resources integrating Windows Phone with traditional Windows so that the two platforms eventually become interchangeable. You may question this course of action but it’s what Microsoft is doing and I can’t see it dropping all this work just because Windows Phone’s market share dipped in key markets.

Things would be different if we were talking about, say, Palm or BlackBerry whose major business has been selling mobile phones. But Microsoft isn’t BlackBerry or Palm — it’s an enormously profitable company that can print money from its enterprise software and services. This is particularly important because it means Microsoft has the flexibility to keep pouring money into money-losing projects longer than most companies could ever dream of doing. Let’s be honest: If Microsoft has stuck with Bing this long, there’s no way it’s giving up on Windows Phone.

And is Windows Phone really doing that poorly? In the United States, Germany and China it certainly is, but in other key markets it’s captured a fairly respectable share. Kantar reports that in the U.K., Windows Phone’s share has climbed from 7.8% in May 2013 to 9.1% in May 2014. In France, its share has climbed from 8.7% last year to 10.5% this year, while in Argentina it’s climbed from 5.2% last year to 10.9% this year.

Don’t get me wrong, I’m not arguing that Windows Phone has been a success because it clearly hasn’t been so far. But given Microsoft’s deep pockets and its willingness to stick out projects that aren’t immediate money makers, I can’t see it calling it quits on the mobile platform market anytime soon, especially not when its new CEO has adopted a strategy of prioritizing both mobile and the cloud as his two chief initiatives.

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