Weekly Update

Android is great, but Microsoft musn’t abandon Windows Phone

The Wall Street Journal reported this week that Nokia will use Mobile World Congress later this month to trot out its first Android phone. The handset, which was being developed while Microsoft was conducting due diligence on the Nokia acquisition, will be a low-cost smartphone aimed at emerging markets, as my colleague Kevin Tofel recently predicted.

The Journal’s report comes amid a flurry of advice from tech pundits regarding how Microsoft should address its mobile business, which continues to disappoint more than three years after the launch of Windows Phone. Charles Arthur of The Guardian last week suggested new CEO Satya Nadella should move to kill Android and follow Amazon’s lead by creating a forked version of Android. (Arthur isn’t the first to call for the death of Windows Phone, of course; Stratechery.com’s Ben Thompson did the same last fall when he claimed “The war is over, and iOS and Android won.”)

Android is forkable for Microsoft and Nokia

Peter Bright of Ars Technica responded with a lengthy piece arguing that Nokia and Microsoft – and everyone else, for that matter — should steer clear of Google’s mobile operating system because Android is unforkable. While the underpinning of Android (Android Open Source Platform, or AOSP) is a solid native operating system that is freely available to anyone who wants it, access to the proprietary Google Mobile Services (GMS) – which includes the company’s cloud-based apps and services like Google Maps and location-tracking, and the APIs that let developers leverage them – requires Google’s certification. That certification process reportedly costs 75 cents per device, as Bright noted. (Google developer Dianne Hackborn offers an insightful response to Bright’s post here.)

And Google has become increasingly willing to flex some muscle to bring its manufacturing partners to heel and reduce the effects of forking, as it recently demonstrated with Samsung. The dominant manufacturer of Android devices had spent much of the last year working to co-opt Google’s platform by creating its own user interface and homegrown apps, as well as the enterprise-targeted KNOX program and a partnership with Electronic Arts to develop and distribute cutting-edge mobile games through Samsung’s app store. But Re/code reported two weeks ago that the two companies had inked “a series of broad agreements” that will result in Samsung ease up on its own Android-based software and services and focus once again on showcasing Google’s offerings in its devices.

Unlike Samsung, though, Nokia and Microsoft have vast experience as providers of mobile apps and services. They both have broad developer relationships and substantial libraries of apps – like Nokia’s Here – that could be used to replace the GMS offerings that help make Android so attractive to consumers.  Which is why I wrote earlier this week that Microsoft is one of the few companies that might be able to take AOSP and make an attractive Android handset without leveraging Google Mobile Services.

Windows Phone has some momentum. Really.

But Windows Phone continues to grow its audience – at an admittedly modest rate – and Microsoft has come too far to abandon its own platform. Worldwide shipments of Windows Phone devices nearly doubled from 2012 to 2013, according to recent data from Strategy Analytics, and the platform’s worldwide market share grew from 2.7 percent to 3.6 percent, cementing its third-place status behind Android and iOS. Jana Research recently reported that Windows Phone is surprisingly popular in some promising emerging markets such as India and Brazil, and Kantar Worldpanel once again reported that it continues to gain traction in key Western European markets. And while a limited app portfolio has long shackled the growth of Windows Phone, the platform now offers more than 200,000 titles.

There’s no question that Microsoft has made huge missteps as it tries to regain its standing as a major player in mobile. It has failed to market the platform effectively, it was slow to cultivate development of titles that have been popular on other OSes, and it has yet to tap the enterprise market that should be low-hanging fruit. Co-opting Android to extend its own apps and services to the nation’s dominant mobile operating system is a savvy move that could help it reach more users, particularly in emerging markets. But it’s still too early to abandon the Windows Phone platform in which it has invested so much.