Friday, July 28, 2017

Microsoft’s Slow Creep Back into Mobile

This post was also published on TechCrunch.

Despite an early lead with Windows Mobile and Windows CE — and spending billions on Nokia’s mobile business — Microsoft has been on its heels in the mobile device market since the one-two punch of iPhone and Android launching in 2007.

Over the past five years, Microsoft has staked out a strong position in the pro tablet segment with its Surface Pro. Microsoft is aggressively expanding its Surface line into the notebook and desktop segments. The upcoming introduction of x86-compatible ARM chips and the rise of progressive web apps could drive a return to the mobile market for Microsoft.

Microsoft’s foothold in the pro tablet market

Back in 2012, Microsoft entered the tablet market in full force. While the ARM-based Surface RT failed spectacularly in the tablet market due to lack of apps, Microsoft invented a new category of pro tablets that were as powerful as laptops. Microsoft has had a very straightforward play with its pro tablets: set the expectation that a pro tablet can function as a laptop with a powerful processor, keyboard cover, pen support, floating windows and a dock.

It has taken five years for Microsoft to push through here, and it is working. Apple has been chasing Microsoft in the pro tablet category and recently introduced floating windows and a dock for the iPad Pro. The key for Microsoft has been to iterate on its Surface Pro line to maintain a foothold in the mobile device category and slowly gain market share. It’s difficult to compare iPad Pro and Surface Pro sales directly as both Apple and Microsoft don’t break out unit sales by product. In 2014, all iPads outsold Surface Pros 9x. In 2017, that number has dropped to 5x as Surface Pro sales increase and iPad sales decline.

Surface’s expansion into the notebook and desktop market

Over the past 18 months, Microsoft repeated the Surface Pro playbook into every category of Apple’s Mac OS product line. With the Surface Book detachable notebook, Surface Studio desktop and now the Surface Laptop, Microsoft keeps releasing new, innovative features like detachable screens and the innovative Dial input device.

Apple’s Mac OS products have been a low bar to hit for Microsoft, as Apple’s products have been stagnant in recent years. Apple has focused on changing plugs and weird features like the MacBook Pro Touch Bar. Microsoft will keep plugging away with each of these products until it gets to a fifth of Apple’s volume, at which point the products have achieved escape velocity.

Re-entering the light tablet market

Five years after the ill-fated Surface RT flopped, ARM chips are finally powerful enough to run Windows 32-bit x86 apps in emulation. Emulation is a trick Apple has twice used to move customers from Motorola 68K to PowerPC to Intel x86. The apps run a little bit slower, but they run. There are few complaints as vendors recompile popular apps over time into the new processor architecture. It probably took some strong-ARMing from Microsoft to convince Qualcomm to add x86 emulation to ARM chips, but Windows Server ARM support was likely a good trade to enable ARM growth in the data center.

Before re-launching an ARM-based Surface Tablet, Microsoft will likely ship a Surface Book with an ARM chip that runs apps from the Windows Store. Once Surface Laptops and its cheaper kin from Windows OEMs flood the market, Microsoft will have a successful cross-processor apps strategy that encompasses both x86 and ARM chips. At that point, introducing a Surface Tablet will be no surprise. The Surface Tablets will effectively be Pro tablets that run on ARM chips, with Windows S, Microsoft Office and an entire library of Windows Store-vetted 32-bit x86 apps.

Making progressive web apps Windows apps

On mobile, it’s really all about the apps. In previous efforts, Microsoft tried to pay app developers to port to the Windows Phone. It wasn’t a bad strategy considering there is definitely a power law in app usage and there aren’t that many apps needed to reach critical mass. However, it was quite painful to port apps to Windows Mobile 8, which made it hard to entice developers who were battling to get installs on iOS and Android. Microsoft recently finally ended support for Windows Mobile 8.

Google has been pushing progressive web apps that make desktop websites run virtually like native apps on tablets and mobile. Even media-intensive sites such as SoundCloud now provide an HTML experience that is on par with native apps and can downscale to a mobile form factor and include features like ongoing playback through navigation and a clickable sound wave. “Mobile first” apps have fallen by the wayside to what I like to call “mobile also” apps that can be used on desktops, tablets and mobile devices.

Progressive web apps are very easy to turn into Windows 10 Mobile apps, as Windows Universal Apps can simply wrap Microsoft’s new Edge browser. Now Microsoft can get developers to simply wrap their progressive web apps as Windows 10 apps, which is quite easy to do. And Microsoft can easily convince native x86 developers to make sure that their tablet apps can downscale to mobile. What’s the difference, really, between a 6.5” phone and an 8” tablet?

Microsoft can take its time before introducing a Surface Phone. It will take a couple of years to establish Windows 10 S for the ARM-based Surface Laptop, re-introduce an ARM-based Surface Tablet and let OEM’s like the HP x3 be the test ground for the new Windows Mobile. Microsoft knows people aren’t going to rush out and buy a Surface Phone. To Microsoft, it doesn’t matter. They just need a viable toehold that they can grow into market share over time. Don’t think it can happen? They’ve already done it before with the Surface Pro.



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