The tremendous success of the iPhone and other smartphones isn’t the only reason Microsoft is having such a hard time these days — but it certainly doesn’t help.
In July, Microsoft announced that it would be cutting 18,000 jobs. It’s tempting to tie that decision to the growth in mobile computing and Microsoft’s stubborn persistence in developing for the desktop. Like any established company, it struggles to adapt when its business model is disrupted.
But there are a number of factors at play here, as the computing landscape continues to shift.
The mobile division is what’s getting streamlined. Two-thirds of the announced layoffs will come from Nokia, which Microsoft purchased last year as part of its push to get into mobile more effectively. Nokia was already struggling mightily, because it was more directly affected by the rise of iPhone and Android. Like Microsoft and BlackBerry, it had its own phone operating system but didn’t evolve quickly enough in the face of slicker competition.
It’s not like Microsoft has never recognized the potential of mobile devices. Windows Mobile was pretty much a shrunk-down version of the desktop Windows, requiring a stylus to navigate tiny menus. BlackBerry used a nice roller ball to control a pointer on its screens. What Apple got so right was the sensitive multitouch screen, allowing direct interaction with the device and the content on it.
Everybody is building desktop software. Mobile apps get a lot of attention, but the desktop market hasn’t gone away. Tablets already outsell laptops, and the conventional wisdom is that they will outsell all PCs worldwide in 2015. So why would you bother making desktop applications?
Well, because while mobile computing is indeed growing like gangbusters, it’s largely as a complement to traditional computing, not as a replacement. Even people who’ve purchased multiple tablets and phones in the past few years still use laptops and desktops. Making more phones and tablets “dockable” with keyboards and larger displays might help kill off less-mobile computers, but it won’t happen overnight.
If anything, Microsoft has gotten flak for trying to make Windows too mobile-friendly. Windows 8 was basically made for touchscreens, but so many people still use keyboards and mice that Windows 9 will cut back on those touch features. Apple now releases updates to its OS X desktop operating system for free but makes millions from the hardware it runs on. Google has managed to make Chromebooks a thing, making an app-centric version of its Chrome browser into an operating system on laptops.
It’s more than just Windows. It’s even more than Office. Microsoft’s two core products have more competition than ever before, but it’s finding its place as one provider of services that many companies offer. Sure, most people can get by with Google Drive, but Office 365 combines cloud functionality with a ton more features that businesses find useful — you just have to pay for it. Just like you can pay for more features in Google Drive.
It’s true that Microsoft can no longer rely on the dominance of its Windows operating system to lock customers into other products. It will have to compete on a more level playing field.
Slimming down Nokia was practically inevitable, whether or not Microsoft or some other company purchased it. Will a mobile Windows operating system emerge that starts to take a bite out of the smartphone ecosystem? We can only wait and see.
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As seen in the September 18, 2014 issue of the Hippo.