[dropcap]M[/dropcap]icrosoft’s struggle in the Mobile space is well documented.
As an OS, its a breath of fresh air and has had the single biggest impact in the evolution of the smart phone since the original iPhone in 2007 (Just think about the big trend towards flat designs and the deep OS-level integration of services; even GoogleNow got its inspiration from here).
Yet it’s common knowledge that Android is cornering the market with iOS only providing dwindling resistance. Now lets be clear, Windows Phone is growing (and it should) but its not growing fast enough and Android is approaching that critical mass where it will no longer matter what the competition does as it would have grown so large as to control the mobile experience as we know it.
Of course, there are other contenders: BlackBerry 10, for example, is currently locked in a tussle with Microsoft for third place. However, with Blackberry announcing that it is bringing BBM to iOS and Android, I expect that we’re going to see an accelerated decline in its market share and consequently, its relevance.
Nevertheless, inspite of Microsoft’s low market share, there is no doubt that it has a future and this is largely due to Microsoft’s ability to lock Nokia into Windows Phone exclusivity; basically, Windows Phone has benefited immensely from the reputation of Nokia. But Nokia alone cannot grow Windows Phone to the point where it begins to see exponential growth at the expense of Android and iOS to a lesser extent. It needs help and Blackberry will do more than anyone else to provide that boost.
Imagine a scenario where, on one hand, we have Nokia innovating for Windows Phone and Blackberry on the other hand, with HTC as an important lesser player. It will automatically elevate Windows Phone to a premium status platform – the only true alternative to Apple in terms of both hardware quality and software experience (We know that Nokia, Blackberry, and even HTC make great devices). Now, Microsoft offered Blackberry the same deal that they offered Nokia but Thorstein Heines chose to give BB10 a shot at the market instead, and I think that they will fail. The fact that they’re willing to open up BBM (the one true differentiation that they have) to other platforms is indicative of this. Yet they cannot afford to keep BBM closed – not with the rise of a plethora of messaging alternatives; damned if they do and damned if they don’t. The last time I checked, Blackberry was worth $7.8B. An offer of $12B from Microsoft should be able to buy Blackberry.
Now, such a purchase needs to be carefully managed; Nokia has to be carried along throughout. The objective of the buyout cannot be to threaten Nokia’s resurgence but rather, to aid both Nokia and Microsoft (and HTC) by strengthening and expanding Windows Phone’s influence and viability as an alternative platform. Blackberry will be allowed to continue to run independently with no privileges over Nokia except cash infusion. BBM can then be brought into Windows Phone as an exclusive first and later opened to other platforms (iOS first and Android much later) Microsoft stands to gain a subscriber base that can be targeted with incentives to upgrade to Windows Phone (Regardless of the OEM). Microsoft also stands to gain several very useful patents which it can license across OEMs in its ecosystem further strengthening and differentiating it.
I love BB10 and what Blackberry has done with QNX and I would hate to see all that effort go to waste so BB10 can be sold off to a player still looking to get into Mobile (Amazon for example) or Open Sourced. QNX could be absorbed into other Microsoft business unit like the Home OS team for example. The Blackberry Enterprise services and IPs could be absorbed into Microsoft’s Enterprise division.
I feel confident that this will bring Microsoft back into the Mobile game in a big way and curtail Androids hydra-headed growth before it starts to do damage to Microsoft’s other businesses.
Let me know what you think.
Written by Nades4c