Why Windows Phone Was a $7 Billion Failure

Key Takeaways

[Music] hi welcome to another episode of cold fusion on october 11th 2010 english actor and comedian stephen fry stood on a stage in london he would talk fondly of a new phone operating system by microsoft called windows phone even though he was a long time iphone enthusiast stephen fry would relay his moments of delight that the refreshingly new windows phone provided him and he had good reason to be so enthusiastic windows phone was radically different and in many ways ahead of its time it was much more polished than android but was better designed than apple's ios windows phone could have still been here today but some unfortunate blunders destroyed the project the remnants of nokia also built the kitchen sink on windows phone and pretty much sunk with it when all the dust had settled only a 7 billion failure remained so what went wrong you are watching cold fusion tv when steve jobs announced the iphone in 2007 the world had changed forever without the public knowing it yet smartphones were now actually intuitive gone was the cumbersome navigation with a keyboard taking up half the device at all times an all-encompassing multi-touch display could transform the device to do any task he wanted though at the time not everyone was convinced some thought that this new touchscreen phone was just a novelty that would fizzle out in a couple of years chief among them was microsoft ceo steve bulmer steve let me ask you about the iphone and the zune if if i may zoon uh was getting some traction and steve jobs goes to mac world 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 how do you compete with that though he sucked out a lot of the spotlight uh in the last few weeks how do you compete with that right now we're selling millions and millions and millions of phones a year apple is selling zero phones a year so how could steve bulmer be so confident that the iphone wouldn't succeed it may have to do with the fact that microsoft had had a lot of experience in mobile computing as far back as 1996. in that year bill gates would unveil the handheld pc it was running windows ce which was basically windows 3 tuned down to run on simple hardware through the years microsoft would revise the mobile version of windows by the time the iphone was released in 2007 microsoft were the second biggest player in the mobile software space aside from nokia symbian they saw no threat from apple until they saw the sales numbers of the iphone in late 2008 microsoft realized their mistake and got to work building their own multi-touch device google had also done the same in 2010 the windows phone software was revealed to take on the iphone this is a navigation animation that we call turn style so it's a animation into the panorama that the concept appears to give the user context that they could go left and right to the panorama and as they pan through you'll see that things kind of move in a different uh there's a little bit of parallax as we slide through uh the panorama calendar this is actually one of the simpler animations in the system but it's also one of my favorites it's just something really kind of i don't know beautiful and powerful about the thought of just being able to tapping on on a day within your month view and then just zooming directly in into that day view and then back out again taking styling cues from 50 year old swiss design it would be typography simplicity and motion that was at the forefront of the design right from the get-go from its outset in 2010 windows phone was the boldest and most original reimagining of what a smartphone could be three years after apple's iphone introduction unlike android windows phone was not a recreation of the standard ios icon grid and also unlike android windows phone was slick it was fast and fluid on all hardware also remember that back then iphone icons were still skeuomorphic and samsung at the time were just copying apple android was pretty drab if you didn't know how to customize ironically that's how this channel got its start at the very beginning i even made an app to change the android interface ideal booted windows phone 7 and android from an htc phone so for a couple of years i got to know both operating systems quite well the very first thing that one would notice from windows phone back then is just how responsive it was everything was a fluid motion enhanced by tasteful animation there was also some depth to the ui the dynamic tiles were efficient yet practical you could make them as simple or as complicated as you wanted the on-screen keyboard was a delight to use it was the very best of any smartphone os and there was some thought behind everything all the important stuff was near the bottom of the screen and this made it easy for one-handed use overall it felt like software that was five years ahead of its time this was a solid foundation for microsoft [Music] the platform had a strong launch with a star-studded list of partners from htc to samsung and dell every large brand in 2010 was there but there was one brand in particular that looked like the perfect partner for microsoft in a serendipitous moment in 2010 former microsoft executive stephen elop became nokia ceo microsoft saw an opportunity and in an effort to save both mobile brands they joined forces and nokia would stake its entire future in windows phone the next year in 2011 the microsoft nokia partnership would result in the lumia series these phones would have striking designs with a heavy focus on camera functionality would you mind moving your enormous phone you mean the enormously awesome galaxy search one trick pony aren't you a little young to have an iphone you want to go i sheep copy bots autocorrect this you think if they knew about the nokia lumia they'd stop fighting all the time i don't know i think they kind of like fighting the windows phone nokia lumia 920 engadget's reader's choice smartphone of the year [Music] windows phone was looking strong the phones were a refreshing addition to the market and they ran beautifully but there was a problem staring at a beautiful phone all day gets pretty boring pretty quickly if there's no apps for it from the perspective of app developers windows phone was too late app developers were already entrenched in ios or android so nobody wanted to make apps for a new system with a smaller user base and it was pretty rough for windows phone consumers for example instagram and youtube took three years before arriving on the platform and this was a major problem what user in their right mind would buy a phone with basically no apps it was looking grim but for a moment there was at least hope you see microsoft was about to launch project astoria it was supposed to make android app ports a piece of cake but unfortunately it would ultimately fail as microsoft and google never really saw eye to eye and after this point things only went downhill from here when the windows phones didn't sell well hardware manufacturers lost faith in the ecosystem making phones for android was much safer with all of microsoft's partners turning their back on windows phone microsoft decided to double down their nokia involvement microsoft was putting ever-increasing investment into the partnership and the other brands increasingly felt like they were being abandoned and this sentiment would only grow [Music] nokia's mobile division was bought for 7.2 billion dollars microsoft basically rebranded nokia hardware with embossed microsoft logos to strengthen the brand image but still the lack of windows phone apps had already driven a lot of would-be customers away but even within the corporate relationship there were fundamental conflicts that couldn't be resolved microsoft wanted to take on the iphone directly and this would involve a tightly controlled lockdown system on the other hand nokia wanted to go after developing markets in india and other areas of asia in the end it left both sides frustrated and unable to even gain enough focus and stability to tackle the competition to make matters worse microsoft changed ceos from steve bulmer to their current ceo satya nadella in 2014. nadella saw windows phone as a loss and decided to shift the company's priorities away from it by 2015 microsoft only had a 2.5 market share the consumers had spoken and they had chosen apple and android later in the year 8 000 employees were fired from nokia it was looking like the writing was on the wall as time went on company resources bound for the windows phone project dwindled and later releases became increasingly unstable even microsoft continuum a software feature that turned your phone into a windows pc couldn't save the project in 2017 it was curtains microsoft stopped development of windows phone it was all over in one of the most beautiful failures still getting that oled display you're still getting great battery life you're still getting powerful enough performance because the great thing about windows phone is it didn't require a lot it was it was really well optimized both with battery life and power the best on screen keyboard there is right here for messaging when i was just typing out a couple emails on this earlier and just doing some simple google searches it was a pleasure and it is it pains me going back to other on-screen keyboards when i know something like this existed in the past and just has not been carried forward but that's what makes it that much more depressing going back and using windows phone because you love the live tiles you love the keyboard the oled panel way ahead of their time and the usability of it and the fact that you're just like why couldn't this have survived why didn't anybody pick up on some of these things and run with them in 2022 because these are still valuable features that we'd enjoy having in a phone today if microsoft had been earlier to the game successfully engaged developers gave equal attention and incentives to other manufacturers and allowed for a less lockdown system perhaps windows phone would have survived but hindsight is 20 20. i do think it would have been cool to see windows phone become successful they did a lot of things right really early and it would have been very interesting to see what it evolved into today but ultimately consumers didn't see the value in the whole windows phone package if you like this episode and you want to see another microsoft failure check out the cold fusion episode on the microsoft kin i'll leave a link to that below feel free to have a browse of this channel for any other content that may interest you anyways thanks for watching my name is digogo and you've been watching cold fusion and i'll catch you again soon for the next episode cheers [Music] cold fusion it's new thinking