Microsoft does not have an official presence at MWC this year and part of that is because just days after MWC Microsoft is going to be announcing Windows 8 plans and that is expected to have broader implications for the phone division as well. But for now we know a few things. For one, it seems like there’s not going to be any game changing Windows phone news for some time. Secondly, it seems like Tango is a true play to the bottom tier market and that’s actually something that’s brilliant even if it’s under appreciated by the blogosphere. Let’s get into it.
Both HTC and LG have stated that they are not talking about new Windows phones at MWC. HTC took it a step further and stated that their next phone line would be part of Apollo a/k/a Windows Phone 8. That’s anticipated to hit towards the end of this year and I presume Microsoft will call say it will be ‘in time for the holidays’ which means early November. So where exactly where we’ve been with Windows Phones. The Nokia 900 and the HTC Titan II are expecting to come March 18. Both are well spec’ed phones and the Nokia will come with lots of ads and lots of fanfare. The Titan II comes with the massive screen size and ups the game from the original Titan but it’s an evolutionary upgrade from the Titan. And then you have to look to the other US carriers that have no new devices at all and of course AT&T is already owned by the iPhone and Android is strong there. Yes, Nokia is a worldwide player and Nokia’s international market shouldn’t be underplayed at all but there’s a lot being left on the table here and if the manufacturers and carriers are waiting for Apollo then Windows Phones will remain silent for some time. That means Q4 can be strong but until then it’s all about getting the Marketplace stocked and getting some buzz and marketing in line with Windows 8 but again, there’s a large period of time between now and then.
But that doesn’t mean there aren’t going to be a few million Windows Phones sold during the next two quarters. The Tango rumors are solidifying (with only a few hours until we expect them to be confirmed) but put simply, they are closer to the first generation of Windows phones, with even less RAM required, some other lower specifications and there are less background services running. It’s intended to be less data intensive, unable to play the top Xbox Live titles and unable to use all apps that the existing line run. Sounds like a step backwards but if that’s what you think you’re wrong. One benefit of being so late to the market is that the first generation of Windows Phones run smoothly at 1ghz and that’s with a host of background services and the like running. Now Microsoft is aiming for phones that sell around the $200 mark (without subsidies), don’t have unlimited data plans and are meant for the masses. Take yourself outside of the US and it’s common to buy phones at retail price and to pay for your data as its used. The market for low end phones has always been Nokia’s sweetheart but brining an optimized OS to a low end market can pay huge dividends. Microsoft doesn’t need to make much on each license. They need to get people to use the OS, to server ads, to buy apps, to use their services. This is part of building an ecosystem but it’s always a way to move a lot of phones at a speed that $600 phones don’t move. Just look at what the Kindle Fire has done by targeting such a low price point and you’ll have a better sense as to what we’re looking at here but of course, the Fire is running an older version of Android (not ICS) and is a lot more fragmented than Tango is (it doesn’t have the full Android Market and apps are greatly limited across the board from email up). And this is intended and slated to be a play in markets like India where Nokia can move phones and Microsoft can get some sales figures finally. This is like releasing the iPhone 4 now while you know the 4s is out there. There’s a market for both phones and the last generation iPhone didn’t stop working overnight.
I hear the word fragmentation coming from everyone but this is limited fragmentation. It’s a clear cut difference in the phones and buyers will know that from day one. This isn’t like buying a Droid and finding out that it isn’t getting a software upgrade. You’ll know you’re buying a device that has limitations just like anyone buying a first generation Windows Phone would know that it won’t have a front facing camera. There’s no slight of hand here and this really just leaves two targets for developers (the full OS and the Tango OS that has less resources). And for some developers that may mean that they need to optimize their code or that they cannot target the low end devices. For most it’s still the same core OS and from what we’re hearing it shouldn’t be culture shock like Android where apps just crash the device. If the phone can’t support the app, it won’t be available to install so it’s still not the Wild West like Android is where you buy first and then find out you got burned.
For me, the bottom line is that Microsoft isn’t there with Windows Phone 7.5 yet. The carriers and the manufacturers have made a statement on this point. Nokia will make some sales with the 900 but the high end devices are otherwise waiting for Apollo. But Nokia will keep itself busy selling to an international market where it should see significant inroads and that will pave the way for it to keep Nokia and Windows Phone relevant in terms of sales.