Microsoft(NASDAQ:MSFT) Windows Phone is just 5 years young, yet the software giant is killing off the brand. Just like they say, out with the old and in with the . . . older.
That's right: Microsoft is resurrecting its old Windows Mobile brand as part of its broader platform strategy with the forthcoming launch of Windows 10. The company is ambitiously planning on unifying all of its platforms with the new release, which it has said will be the last major version. Future updates will be more incremental.
That is a lot of versions
There will be seven different versions of Windows 10, each targeting a specific market: Home, Mobile, Pro, Enterprise, Education, Mobile Enterprise, and IoT Core. Each version will come loaded with features tailored to their respective markets, as you would expect.
Home is meant for typical consumers; Pro is designed for small businesses; and Mobile will power smartphones and small tablets. Enterprise, Education, and Mobile Enterprise will be available to volume-licensing customers.
The shift back to Windows Mobile (the full name is Windows 10 Mobile) is a bit peculiar, though, since Windows Mobile had a rather poor track record in the market during the earlier days of the smartphone. To be fair, Windows Mobile boasted a respectable market share back then, peaking at 42% in 2007 (the year Apple launched the iPhone). But the issue was that mainstream users had yet to adopt smartphones -- Microsoft had a huge slice of a small pie.
With the seventh major release, Microsoft rebranded its mobile platform as Windows Phone. It took some time for Windows Phone to gain any semblance of traction, as iOS and Android quickly became dominant. Windows Phones accounted for just 2.7% of the market in 2014, according to IDC. That might not sound like much, but it earned Microsoft the No. 3 market spot. It helps that nearly all other smartphone platforms, such as BlackBerry (0.4% share), have effectively evaporated.
What Microsoft did not say
However, Microsoft did not elaborate on pricing for any of these Windows 10 versions. That is a pretty important piece of the puzzle that has major implications for investors.
The company has vaguely discussed the idea of implementing a Windows-as-a-Service model for quite some time. While Windows 10 will be a free upgrade, and there will not be any ongoing licensing fees, its monetization strategy will shift toward search, games, and apps. That will be particularly true for Windows 10 Mobile, as Windows Phone was one of the first Microsoft operating systems to become free for OEMs.
It is worth pointing out that the free upgrade to Windows 10 only applies to Home, Pro, and Mobile. The Enterprise, Education, and Mobile Enterprise versions will not get a free upgrade path, which makes sense considering that commercial licensing remains the bulk of revenue, comprising nearly half of sales last quarter.
Windows Mobile quickly fell by the wayside the first time around, but can it succeed this time?