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What Windows Phone needs: A truly fabulous flagship phone

Mark Hachman | Dec. 8, 2014
As Microsoft floods the market with cheaper handsets, it's ignoring the power of one, great phone to lead the platform.

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Apple has the iPhone; Google the Nexus line. Microsoft has a bunch of numbers that don't mean much to anyone.

It's not that Microsoft's Windows Phone platform is heading in the wrong direction. It's not really headed anywhere at all. Microsoft needs to figure out what Windows Phone stands for, fast--and capitalize upon it with a flagship phone that embodies all of those features.

That's the upshot of a report on Windows Phone, released Thursday, that paints a dim picture of the future as the company embraces the midrange and low-end phones. Anemic developer support compounds the problem, the report's author added.

And to a large degree, he's right.

In the report from Jan Dawson of Jackdaw Research, Dawson recommends that Microsoft continue to identify differentiating features that distinguish Windows Phone from Apple's iOS, which dominates the high end of the market; and Android, which eats up everything else. Windows Phone appears to be attacking the same portion of the market Android is, with quality hardware at bargain prices--but with a fraction of the user base. Dawson recommends developing an iconic flagship phone, and I agree with him on that.

Dawson almost implies it's too late to save the Lumia line, in part because of the vicious circle of app development: A lack of users means less potential revenue, which means developers hold off developing apps for the platform, which turns off consumers who might be interested in the platform.

The report notes that Windows Phone's market share peaked at 3.4 percent in the fourth quarter of 2013 and has declined ever since. In part, that's because shipments have remained flat at about 34 million units for the last year.

So what needs to be done? Here's the problem and some solutions.

The problem: low-end hardware and knockoff apps
Unfortunately, it's hard not to come away from the report without feeling that Windows Phone represents the Walmart of the smartphone market. The cheapest Windows Phones--the 500 series--represent about 40 percent of the Lumias in the market today, according to AdDuplex. For the past 24 months, the Lumia 520 was by far the most popular Windows Phone device, outselling the next most popular model (the Lumia 625) by almost double, data from Counterpoint Research shows. And that's not surprising, because the 520 costs about $30 on Amazon, or $80 unlocked. 

"The clearest explanation appears to be that the low end is the one area where WindowsPhone has really found a way to set itself apart, as a low-cost but not low-quality alternative to cheap Android devices," Dawson wrote. "Both Microsoft and Nokia have effectively articulated their key selling points against the other major platforms at this end of the market, and they've had significant success there as a result."


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