Microsoft makes a big smartphone push

Microsoft, which bought Nokia’s handset business last year, has only 3% of the global smartphone market. By contrast, Android phones, led by Samsung, control 81% of the market and Apple 15%, according to Strategy Analytics. But in recent months, it has become clear that Microsoft is pumping in a lot of juice to change the momentum of its mobile business and drive itself towards the low-end, budget market segment to stay right in the middle of the competition in emerging markets like India.

The strategy continues to yield results as analysts say that nearly 78% of market demand is for phones in the sub-R10,000 range. This strategy has forced the Redmond, Washington-based technology firm to put out competitive low-end devices, like the Lumia 520 and Lumia 535. In other words, Microsoft is not just trying to stay relevant, it wants to takeover the segment altogether, at least in a high growth market like India, where people are increasingly looking to upgrade from a feature phone to a smartphone, with a growing aspiration for smarter experiences.

“With our devices, we are trying to give users the best experience even in the budget category. The operating system and the ease of use will remain the same across devices, be it in the premium, mid-range or the budget category,” Raghuvesh Sarup, director—marketing, Microsoft Devices India told FE in a recent interview. According to him, Microsoft had done a survey and found that users across categories are looking to have a hassle-free integrated platform that aids them in their daily lives. “We at Microsoft believe that the smartphone is the new PC and a PC helps any user to multi-task and to do more with one device. Bill Gates used to say that Microsoft’s aim was to provide a PC for everyone; Satya Nadella’s aim is to provide a smartphone for everyone,” he said.

When asked whether Microsoft has become its own competition by letting partners use the Windows OS and put several of its flagship features on the Google Play and the iOS App Store, Sarup said, “No absolutely not. We are telling the world about our capability. They can try the apps individually but when all of it comes together under our flagship operating system, the experience is entirely different. It is naturally faster, smarter and easy to use.”

Microsoft has also adopted several strategies to make their device acceptance in the market easier. As per their go-to-market model, it is tying up with several app firms whose content are India specific and with several network operators to offer free 3G data for consumers, Sarup said. “We are trying to learn from the users—what they need? What they would like to consume? Hence our tie ups and present app bundle out of the box reflects that. Plus it will help us to expand our app ecosystem as well because technically speaking our phones are capable of doing wonders for any kind of users,” he added.

Microsoft’s takeover of Nokia has barely faded from memory as the former has continued to release new phones under erstwhile Nokia brand and is currently in process to re-brand all the Nokia stores. “We are also looking to make our delivery and supply system stronger than ever,” Sarup said.

According to IDC, Windows Phone had the smallest year-over-year increase among the leading operating systems, growing just 4.2%, well below the overall market. Microsoft relied primarily on a long list of entry-level Lumia devices to maintain its position in the market, and relied on its partners HTC and Samsung to provide cover on the high-end of the market, it said in a report.

With the launch of Windows 10 later this year, Windows Phone stands to make a more concerted effort to return to the high-end of the market, the analytics firm has predicted. While Android pushed past the one billion unit mark in 2014, iOS saw its market share for 2014 decline slightly even as volumes reached a new record and grew at nearly the same pace as the overall smartphone market. IDC explained Apple’s position saying that this was due to the strong demand for Apple’s new and larger iPhones and the reception they had within key markets. BlackBerry posted the only year-over-year decline among the leading operating systems, falling -69.8% from 2013 levels.