It's been nearly five months since Microsoft (NASDAQ:MSFT) closed its $7.2 billion deal for Nokia's devices, and as the dust settles the responsibility for the Redmond-based company to turn its smartphone position around becomes clearer.
But tackling Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android and Apple's (NASDAQ:AAPL) iOS is no easy task. There's no quick fix for the Windows Phone OS, but there are three ways Microsoft can steer its OS toward success.
Close the app gap
This isn't a new idea. Everyone knows it, but Microsoft has yet to woo enough developers to its platform to make this happen. Right now, Windows Phone has 300,000 apps compared to more than 1 million for Apple's App Store and the Google Play Store.
Numbers clearly aren't everything, but Windows Phone also has problems securing some of the most popular apps. According to July data from App Annie, Windows Phone only offered six of the top 25 iOS apps -- though some of those were less-than-neccesary apps like Kim Kardashian: Hollywood.
But even the lack of popular games on Windows Phone points to a major problem. Data from Flurry shows people prefer to use Android and iOS for gaming more than any other category.
Which leads us to the question: if Windows Phone doesn't have the most popular games or much of the same popular non-game apps, what are people using the OS for?
Of course Windows Phone has its own games and even work-around apps for popular apps that aren't available, but it's hard not to see that both of these problems are part of what's keeping Windows Phone so far behind the competition.
So with a lack of gaming apps and popular apps, why not cater to the business sector and lock-in existing Windows users?
Get down to business
OK, so Microsoft's smartphone isn't winning the app popularity contests, but it's probably a real workhorse that's tearing iOS and Android apart in the business sector, right? Unfortunately, no.
According to a new report by Good Technology, Apple's iPhone is absolutely killing it when it comes to enterprise smartphone activations, while Android handsets take the No. 2 spot and Windows Phones barely register in the category.
The Good Technology data shows that for the past five quarters Windows Phone hasn't moved beyond its 1% enterprise activation share. It's a bit stunning that Microsoft -- of all companies -- can't convince businesses that it makes the best utilitarian smartphone OS.
To win over enterprise users, Microsoft will have to circle back to it's app problem. Good Technology mentioned a quote from Forrest Research that said, "At the end of the day, we may talk about mobile devices, but in reality it's all about the apps."
To get more apps Microsoft needs more developers, and to do that it needs to sell more phones. This will happen when Microsoft finds the right avenue to move its devices.
Flood the market
There's a strong case to be made for Microsoft to steal some of Samsung's marketing strategy and simply flood the smartphone market with a wide range of devices at different price points.
It may seem like a desperate move, but Windows Phone is walking a fine line right now. In the second quarter of this year, the company shipped just 7.4 million smartphones, a 9.4% drop year over year. That pushed Windows Phone OS to 2.5% of worldwide marketshare, down from 3.4% around the same time last year.
In a recent letter to employees, Stephen Elop, Microsoft's VP of devices and services, said the company will focus on the "more affordable smartphone segments" to drive Windows Phone sales. That may work in part, but the company needs to target the mid and high-end markets as well if it wants to get developers to create apps for its devices and make real gains against iOS and Android.
Right now, Microsoft has nothing to lose by offering a plethora of devices and then axing the ones that don't work. By focusing too much on low-cost devices, Microsoft risks losing the mid-range and high-end markets for good, as Apple and Samsung users become further locked in to those app ecosystems.
Microsoft has a tough road ahead, and we can't pretend any of these strategies will be easy. It'll take more than a few quarters to see any of them realized, if it can pull them off at all.
I think there's room in the smartphone world for three strong OS platforms, but the window of opportunity is slowly closing for Windows Phone. If Microsoft can't convince users that it has the best apps, the best productivity software, or the best array of devices, than what does it have? That's the question facing Windows Phone right now, and it's high time Microsoft answered it.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.