Where Will Microsoft Find the Customers for Windows Phone 7?
Like many Windows Phone Thoughts readers I too have been reading the reviews over the last several days of the prototype Windows Phone 7 (WP7) handsets that Microsoft has distributed. This has got me thinking about the not too distant future when the WP7 handsets from various vendors will be available to all of us. A particular question I've been contemplating is "where will Microsoft find the customers for these new WP7 smartphones?" Let's analyze this a bit and see if we can figure out where they will come from
The sources of customers for a new product really fall into at least three categories:
- Existing customers that are going to switch from an older product to the new one.
- Customers using competing products that can be convinced to switch.
- Customers that don't currently have a product of this type which enter the marketplace and purchase your product
Let's look at each of these categories in turn.
Category 1: Existing Customers That Switch From an Older Product to the New One
Starting with first principles, I think any product vendor that wants to be successful needs to keep their existing customers, and, hopefully, have them switch over to their new product. For Microsoft, this means they will have to have success getting existing Windows Phone 6.x.x customers to move to WP7. Is this a slam dunk? Unfortunately, I think not as there will be some challenges here relating to WP7 taking a very different tack from the direction Windows Phone 6.x.x has been heading in the last few years. Whereas Windows Phone 6.x.x handsets are highly varied, enable and allow huge amounts of customization, and are a veritable toolbox of options for developers, the new WP7 platform is more restricted in hardware variability, has a controlled interface, and is a new, more restricted, and less mature platform for developers.
The net impact of this is that for some existing customers the new platform represents a step backwards, not forward. How many potential customers does this represent? It's hard to know for sure, but I don't think the numbers is insignificant. The commentary that I believe prevails is that while many existing customers believe they understand why Microsoft is making the moves it is, they are not super excited to give up the plethora of custom applications they have accumulated (or at least have access to) over the years. Clearly some will switch, but I'm not convinced it will be a wholesale movement over to the new platform.
Category 2: Customer Using Competing Products That Are Convinced to Switch
Let's be honest here. I don't think there will be a lot of iPhone users rushing over to the WP7 camp. With the iPhone 4 now out, and as evidenced by the sales numbers Apple is putting up with it, I just don't see a lot of people moving from that platform. So that means Microsoft will need to get BlackBerry, Symbian, Android and other platform users to make the move. Android users will be problematic as that platform is clearly on the upswing and, in my opinion, is showing compelling growth and interest. Ask yourself how many Android users you know that are anxious to leave their smartphones for another competing platform? That leaves us with BlackBerry, Symbian and a handful of other platform users that are ready to move.
There are a few problems that Microsoft will have with the BlackBerry users that they'd like to see switch over. First, many BlackBerry users have been issued their phones by their employer, and they don't really have a say in the matter anyway. I suspect these employers will take a wait and see attitude, and will be reticent to move from the BlackBerry platform they have comfort in supporting. Second, the BlackBerry platform has a strong hold amongst business users that have been well served by the platform's dexterity with e-mail. Where the door is open a crack is with BlackBerry users in small- and medium-sized businesses, or individuals who have purchased BlackBerrys, that have lost interest in where RIM is taking the platform. I believe there are a number of these customers (I am one of them) and I think RIM is not showing them a compelling enough future to stay around. Case in point: I know many people who are so fed up with the BlackBerry's Internet browsing issues that they are ripe to move on. The question, however, will these people be willing to move to WP7, or will they head to the iPhone or Android camps?
Category 3: Customers That Don't Currently Have a Product of This Type Which Enter the Marketplace and Purchase your Product
This category represents the great unknown. Despite the huge numbers of smartphone users "out there", if you look at the macro statistics there is still a huge nascent market to tap into. This category could also certainly include feature phone users that are ready to move up to a smartphone. Is this the great opportunity that awaits Microsoft? How big is this category?
First Release Has to be Very, Very Good, But Not Perfect
Regardless of which category customers are going to come from, I believe there are a few imperatives for Microsoft to "get right" if they plan to have success with the new WP7 platform. First, the core functionality of the phone has to be absolutely spot on at release. In my opinion the core functionality will include the phone application, e-mail, contacts, calendar, and web browser. If these core pieces falter at all, there could be trouble around the corner.
Second, The Total User Experience (see my article on TXI) will need to meet or exceed the potential customer's initial expectation. What does this mean? It means that their experience with the phone when they try it out for the first time must be a "wow" experience (because, almost certainly, their expectation is that using the phone will be "different and wonderful"), and thereafter as they try out the core functionality they can't walk away thinking "that won't work for me".
There's not much leeway here. Microsoft has a big challenge on their hands to find WP7 customers and it will be quite exciting to see if they are up to the challenge. I'll be honest, I'm torn about whether they can do it or not, but I will reserve judgment until I perform my own tests and experience the platform first hand. That experience will help me asses how many people I think will be swayed into purchasing a WP7 smartphone. The TXI factor will be important, and will include the potential customer's experience with Microsoft's marketing campaign, public sentiment, industry viewpoints, and, of course, their own experience. Join the discussion and let me know where you think Microsoft will find the customers for WP7.
Brad Wasson is a self-confessed technology enthusiast and management consultant living in Atlantic Canada. Brad dabbles in all things digital, and is looking forward to his next new smartphone, laptop, desktop, home theater, and any other gadgets he can fit in the house.
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