tl;dr: Microsoft’s new CEO must make mobile work, and since Android and iOS have a huge lead, the best strategy is to buy the top 100+ apps on competing platforms while making Windows Phones zero margin like the Kindle.
Microsoft dominated desktop computing by relentless iteration.
Word, Excel and Windows were far behind WordPerfect, Lotus 1-2-3 and the Mac when they launched. But Microsoft grinded it over twenty years from the mid eighties until the 2000s.
And they won. Big time.
It’s time for Microsoft to grind it out again, and there is a clear analogy here: people don’t buy operating systems, they buy the apps that run on them.
For a time, typically early in a technology cycle, people are obsessed with hardware. But when hardware parity is reached – as it is today in smartphones – folks tend to focus again on apps.
In the ‘80s and ‘90s, people bought PCs based on their hard disk space, memory and CPUs. People actually knew the names and speed of their CPUs!
Now folks buy based on color.
Nokia was a great purchase for Microsoft because they got it at half price (they used offshore money that would have been taxed to all hell if repatriated), and they got a really sexy phone line in the Lumia.
Lumia phones blow the hardware profile of the iPhone out of the water, what with wireless charging and Carl Zeiss lenses.
Carl. Zeiss. Lenses.
They’ve had these awesome features for well over a year. They are stunning.
But they trail Samsung’s and iPhone’s by a significant margin.
It’s the apps.
Microsoft needs to drop everything and buy the top 100 apps on their competitors’ platforms. So, whatever the top apps are on Android and iOS, snap them up!
After you do, you keep building them for iOS and Android.
Things like Evernote, Sunrise and Tinder come to mind.
1. Because if you buy them, you’ve instantly infected the iOS and Android ecosystems!
2. They’re proven.
3. You get talented people on your team who can build the next generations of apps.
4. You can start releasing new features first on Windows and get the halo effect for your platform.
Now, this is a five-year strategy, with the first two years buying and the last three exploiting.
If you have the brass to spend $7b on hardware that’s largely commoditized, you better have the brassier ones to double that on apps.
Apps are what matter.