As phone revenue keeps shrinking, Microsoft should put a nail in the coffin

Madalina Dinita
by Madalina Dinita
Managing Editor
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Although Microsoft hoped that it could somehow resuscitate its phone revenue, things did not worked out as expected. In Q3 2016, phone revenue dropped by 46%, compared to the 49% drop from the previous quarter. Better, but not good enough.

The tech company adopted a successful recipe for its Surface Book and Surface Pro 4 devices and managed to obtain a 61% revenue increase. Unfortunately, things did not go as smoothly for its phone fleet. What could explain this downward spiral of Windows-powered phones?

Many people complain that Windows phones do not offer access to as many apps as other platforms, especially social apps. For example, Snapchat is still unavailable. In addition, the Windows platform is the last one to receive popular or new apps and does not support as many file formats as Android does, preventing users from accessing specific content.

Its gaming experience is not as rich as on other platforms but the people who support this idea probably have not tried out these games from the Windows Store — and we only covered 100 games.

If Microsoft wants to reach more buyers with its Windows phones, it should also focus more on marketing. Apart from its 2012 attempt to promote its phones with the help of celebrities, the company has not used this type of marketing strategy ever since.  Other manufacturers continue to use this strategy with success.

Secondly, if Windows phones don’t sell, why keep them on the shelves? Microsoft could offer a major phone discount to those customers who buy high-end devices such as the Surface Pro 4. For example, if you buy a Surface Pro 4, Microsoft offers you a Lumia 950 for free.

The main issue with Windows phone is mediocre marketing. Microsoft is constantly working to improve the features and capabilities of its phone fleet through massive updates and Cortana support, but it stubbornly sticks to the same marketing strategy that obviously does not work very well.

You can read the press release for the Q3 2016 results here.

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  • How much good money should be thrown after bad? This is the question I suspect is holding back the marketing. I believe Microsoft has given up on Windows Phone (or whatever they decide to call it next) and is now looking for the least costly, and most graceful way to exit the market. Everything they have tried thus far has failed, and I see no reason to believe this is going to change.