The Lumia 950 XL. Image source: Microsoft
Windows Phone has been a failure.
Despite spending billions to acquire Nokia's handset business, Microsoft (MSFT 0.64%) hasn't been able to drive interest in its mobile operating system. Windows Phone's market share hovers in the low single-digits -- far behind Apple's iOS and Alphabet's (GOOG 0.19%) (GOOGL 0.15%) Google Android. Microsoft wrote off the bulk of its handset business in July. It will continue to make Windows Phones, but according to Bloomberg, the company will produce far fewer models than it did in the past.
Yet Microsoft isn't giving up on mobile computing -- just the opposite. Although the company may not control the operating system, it's offering an increasing number of mobile services and apps. A recent innovative promotion serves to highlight Microsoft's new mobile strategy.
Get paid to download apps
Last month, Microsoft gave out $25 gift cards at its retail stores. The gift cards were free, but carried one catch: Those who wanted them had to allow an associate to install three of Microsoft's mobile apps on their smartphones. They didn't have to be Windows phones -- they could've been iPhones, or Android handsets from one of Alphabet's many hardware partners. Simply download some Microsoft apps and get paid.
Microsoft has a large and growing number of mobile apps. It's a top developer on both the iTunes app store and Google Play. Microsoft's mobile offerings include messaging stalwart Skype and its Office programs (Word, Excel, PowerPoint), but also OneDrive, Bing, and Cortana. In recent months, Microsoft has acquired popular productivity apps Wunderlist, Acompli (now known as Outlook), and Sunrise, and released experimental apps, including Tossup.
Microsoft brings its ecosystem to other platforms
Many of these apps have been widely praised: The Verge labeled Outlook the top email app for iPhone users. Despite its name, Outlook supports third-party email services, including Alphabet's Gmail -- but most of Microsoft's mobile apps serve as conduits to its online services, and even its Windows operating system.
Cortana, Microsoft's digital personal assistant, is available for Android in beta form and will make its debut on iPhone in the near future. It's powered by Microsoft's search engine, Bing, and it interfaces with Microsoft's other services, including Xbox Live. Like Siri and Google Now, Cortana is capable of setting reminders and relaying relevant information. It's also directly embedded into the Windows 10 task bar. By using the same Microsoft account, iPhone and Android handset owners can link their smartphones to their Windows PCs.
Microsoft's Office mobile apps are free to download, but work best when they're paired with an active subscription to its Office 365 service. Using the included 1 terabyte of OneDrive cloud storage, users can easily handle their Office files between their Windows PCs, smartphones, and tablets, and edit them on whichever device they choose.
Bing is profitable and Office 365 continues to grow
These initiatives are already benefiting Microsoft's bottom line. As of the end of September, 18.2 million consumers subscribed to Office 365, up from about 15 million in July. Last month, Microsoft CEO Satya Nadella highlighted the performance of its mobile apps during the company's earnings call, noting that "[Microsoft] surpassed 200 million downloads of Office Mobile, more than 1 billion to-do lists have been created so far in Wunderlist, and more than [500 million] people manage their documents and photos in OneDrive."
Bing could offer more upside if Microsoft can convince mobile users to download Cortana. Fueled by its Windows 10 integration, Microsoft's search engine achieved profitability last quarter for the first time in its history. Greater usage of Microsoft's mobile apps could propel Bing even further.
Microsoft may not own the platform, but through its apps, it's still finding a way to succeed in mobile.
