Microsoft brushed off iPhone’s launch in 2007. The then CEO, Steve Ballmer, scoffed at the prospect of the iPhone, saying the price is ridiculous, and it lacks a physical keyboard which is essential for business consumers.
Google was also building an Android phone with a keyboard back then and they abandoned it in favor of a touchscreen after iPhone’s launch and release in 2008, while also keeping Android open-source.
Both Android and iOS grew rapidly and smartphones started taking over the world. And Microsoft which dominated the mobile market, felt the heat as it dropped rapidly.
A healthy start
So Microsoft finally recognized the rise of mobile computing devices for regular consumers and began work on the windows phone. And the initial steps were quite good and in the right direction. Their tile interface was quite unique and ahead of its time, which Android replicated with their widgets. The UI was quite fluid, the on-screen keyboard was way better and it also gave good battery life. They had all major smartphone makers – Samsung, HTC & LG, making their first phone, windows phone 7. Scores of other companies joined the suit in making windows phones.
So why did it fail:
A bit late
iPhone was launched in 2007 and Android in 2008. By the time Windows phone was even launched, the incumbents already made headway and became prominent with a good app ecosystem. Android, especially, had a wide range of device options, thanks to its open source, most phone makers were launching multiple devices all throughout the year.
Vying for tighter control over User Experience
Microsoft wanted to emulate what Apple did with their iPhone. They wanted to exert more control on the design, specs, and functioning of hardware, but they didn’t actually make the hardware, their making partners did. whereas Google gave total flexibility with Android. So these phone manufacturers preferred Android over Windows Mobile in their devices, and Android phones were also selling quite well and growing in market share rapidly.
An app store with no apps
The Windows Phone store has been basically empty for most of the initial years. It didn’t have Instagram and even YouTube, till 2013, while iOS and Android had them for half a decade by that point.
And developers were reluctant to make apps for Windows Phone OS, as the userbase is minuscule and it didn’t seem worth the time and the efforts. Whereas Android & iOS are expanding their userbase and thereby the revenue grew further. And Microsoft didn’t do much to incentivize developers to make apps.
Things got so bad that Microsoft even went as far as to support Android apps on their OS, called Project Astoria.
The Nokia debacle
Nokia, once the king of mobile devices was losing market share rapidly to Android. Their Symbian OS, which was the most popular OS in the world, is slowly fading away. So Nokia finally switched to Windows Mobile OS on their phones in 2012.
Microsoft heavily partnered with Nokia, pumping a lot of money, called platform support payments, to prop up their Lumia series of phones. This angered other phone manufacturers, who paid licensing fees to Microsoft for the OS, invested money into R&D, and completely abandoned putting Windows Mobile OS on their phones.
Now Microsoft has total control over the hardware and software, just like Apple did. But by the time they got everything in place, consumers have already moved on and the Windows Mobile OS market share dropped to just 2%.
Microsoft eventually bought Nokia for $7.2B in 2014, which was eventually written off in 2015 itself, and the market share fell to 1% by then.
Microsoft continued supporting windows mobile OS for a while but they eventually killed it in Oct 2017.