{"id":9807,"date":"2016-06-23T15:00:36","date_gmt":"2016-06-23T19:00:36","guid":{"rendered":"https:\/\/southjerseytechies.net\/blog\/?p=9807"},"modified":"2024-05-02T17:22:03","modified_gmt":"2024-05-02T21:22:03","slug":"windows-phones-free-fall-may-force-microsoft-to-push-harder-on-windows-10-adoption","status":"publish","type":"post","link":"https:\/\/southjerseytechies.net\/blog\/windows-phones-free-fall-may-force-microsoft-to-push-harder-on-windows-10-adoption\/","title":{"rendered":"Windows phones’ free-fall may force Microsoft to push harder on Windows 10 adoption"},"content":{"rendered":"

Microsoft needs to protect its access to your wallet.<\/h2>\n

\"Windows_Phone_logo\"<\/p>\n

 <\/p>\n

Poor little Windows phone could have a bigger effect on Microsoft’s business than you’d think. As the company’s mobile device strategy continues to disintegrate, Microsoft may feel compelled to push harder on Windows 10 adoption and paid services to prove it can survive without a viable smartphone\u2014and that could be bad news for consumers.<\/p>\n

The raw numbers are shocking: Microsoft sold a minuscule 2.3 million Lumia phones last quarter, down from 8.6 million a year ago. Phone revenue declines will only \u201csteepen\u201d during the current quarter, chief financial officer Amy Hood warned during a conference call. That\u2019s\u00a0dragged down\u00a0Microsoft\u2019s results as a company, too.<\/p>\n

Chief executive Satya Nadella opened his remarks to analysts optimistically, however, by noting that Windows 10 now powers 270 million devices in active use, a steady increase in its user base since the formal launch of Windows 10 last July. Later on, he summed up Microsoft\u2019s message: \u201cIn this world, what matters most is the mobility of a person\u2019s experience, not any one single device,\u201d he said.<\/p>\n

Will Wall Street buy it? If it does, Nadella will be free to continue. But if investors begin to get cold feet, you might see Microsoft push Windows 10 more aggressively to keep its numbers up.<\/p>\n

\"Microsoft\"<\/p>\n

Selling hardware to sell services<\/h2>\n

Nadella\u2019s strategy is simple enough: grow Microsoft\u2019s revenues, in part by convincing customers to adopt its paid subscription services. The most direct way is through sales of Surface or Lumia hardware. If that fails, then a third-party Windows 10 PC will suffice. Failing that, Microsoft apps like Bing or Cortana running on iOS or Android are acceptable as well.<\/p>\n

But what Microsoft really wants is to sign you up for paid subscription services: Office 365 and Xbox Live, plus the corresponding enterprise licenses for Windows 10, Office 365, and Azure. \u201dOverall, the thing that we\u2019re most focused on with Office 365 is how do we make sure we have the Office 365 endpoints everywhere, [with] good usage,\u201d Nadella said.<\/p>\n

\"bing-home-page\"<\/p>\n

According to Verto, which measures online audience across all devices, Microsoft has four online properties with more than 100 million users per month: Microsoft Live (177.1 million), Bing (138.9 million), Microsoft Office (136.3 million), and MSN (121.5 million). Skype has 83.7 million users.<\/p>\n

Viewed through the lens of \u201cconstant currency\u201d adjustments that discount inflation, Microsoft\u2019s strategy seems to be working: commercial Office 365 license revenue was up 7 percent, consumer Office 365 license revenue by 6 percent. Windows non-Pro revenue growth was 15 percent, though Pro revenue to the commercial market dipped by 11 percent. Xbox Live active users are now at 46 million, up 24 percent from a year ago.<\/p>\n

Hidden dangers<\/h2>\n

Peer a little closer, though, and you begin to see signals that may be worrying the more impatient sectors of Wall Street. For one, device revenue is expected to continue falling.\u00a0Save for a $12.7 billion holiday quarter, revenue in Microsoft\u2019s \u201cMore Personal Computing\u201d group has bumped along each quarter for the past year at about $9.3 billion or so. It’s expected to fall to\u00a0between $8.7 billion and $9 billion this quarter, CFO Amy Hood said, apparently all attributable to the decline in phone sales.<\/p>\n

The PC is the most frequently used device to access Microsoft services, Verto found, with 195.6 million monthly users. The smartphone is second, with 85.8 million users\u2014but few of those devices are Windows phones.<\/p>\n

\"lumia950\"<\/p>\n

\u201dMicrosoft is clearly in an interesting position,\u201d said\u00a0Hannu Verkasalo, the chief executive of Verto, in an emailed statement.Microsoft has said in the past that the service matters more than the device, and the company does have software traction. \u201cThey have quickly pushed their mobile reach with their new device agnostic strategy,” Verkasalo continued.<\/p>\n

Here’s the catch: “Even though they still have twice as many users using Microsoft services on PCs versus smartphones,” Verksala pointed out, “the mobile segment is the growth area.\u201dLacking a viable mobile device, Microsoft is missing out on opportunities to get even closer to users\u2014and their wallets\u2014in this growth area.<\/p>\n

There\u2019s also some evidence that Microsoft isn\u2019t selling services as quickly as it could. Microsoft added just 1.6 million Office 365 consumer subscribers during the quarter, for a total of just 22.2 million users. Remember, at least 60 million Windows 10 PCs\u00a0were sold during that quarter alone.<\/p>\n

Keep your eyes open<\/h2>\n

All this means that the process of locking in customers to the Microsoft platform might be taking longer than expected. To date, investors haven’t minded, generally cheering Nadella\u2019s leadership and sending the company\u2019s stock up to near its all-time high in 1999.<\/p>\n

But given Microsoft’s lower earnings and revenue\u2014and downward guidance in key business units\u2014it\u2019s possible Microsoft may come under greater pressure to make its Windows 10 vision a reality. That\u2019s not necessarily great news for consumers.<\/p>\n

We all know how Microsoft originally made Windows 10 a free update, then began essentially forcing upgrades on users. To be fair, the company hasn\u2019t stopped rolling out updates and new features, with the so-called Anniversary Update on the horizon.<\/p>\n

So far, the company has taken the same \u201csoftly, softly\u201d approach to Office 365: New Skype for Business features essentially require Office 365, as do new unsafe email warnings for Outlook. But what might Microsoft do if it feels it needs to make Office 365 stickier\u2014put all of Office Online behind a paywall, perhaps?<\/p>\n

Several analysts questioned Microsoft about potential profit margin declines. Nadella and other Microsoft executives indicated they\u2019re staying the course. Eventually, though, Wall Street is going to take a harder look at how Microsoft\u2019s strategy is playing out\u2014and the one-year anniversary of Windows 10 could be the ideal time.<\/p>\n

Say what you will about\u00a0Windows 10 and privacy\u2014Microsoft remains generally benign. But if investors start putting the screws in, you can\u2019t help but wonder if there will be more pressure to pay up.<\/p>\n

Have questions?<\/h4>\n

Get answers\u00a0from\u00a0Microsofts Cloud Solutions Partner!
\nCall us at:\u00a0856-745-9990 or visit:\u00a0https:\/\/southjerseytechies.net\/<\/a><\/p>\n

South Jersey Techies, LL C<\/a>\u00a0is a full\u00a0Managed Web and Technology Services Company<\/a>\u00a0providing\u00a0IT Services,\u00a0Website Design Services<\/a>,\u00a0Server Support<\/a>,\u00a0Network Consulting<\/a>,\u00a0Internet Phones<\/a>,\u00a0Cloud Solutions Provider<\/a>\u00a0and much more.\u00a0Contact for More<\/a>\u00a0Information.<\/p>\n

To read this article in its entirety\u00a0click here.<\/p>\n","protected":false},"excerpt":{"rendered":"

Microsoft needs to protect its access to your wallet.   Poor little Windows phone could have a bigger effect on Microsoft’s business than you’d think. As the company’s mobile device strategy continues to disintegrate, Microsoft may feel compelled to push …<\/p>\n

Continue Reading→<\/span><\/a><\/p>\n","protected":false},"author":219,"featured_media":9808,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[9,309,319,107,241,8,16,780],"tags":[1585,1565,1583,1472,63,991,1584,1050],"class_list":["post-9807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-free-software","category-fun-games","category-google-voice","category-news","category-smartphones","category-software","category-windows","category-windows-8-phone","tag-lumia-phones","tag-microsoft-network-partner","tag-microsoft-to-push-harder-on-windows-10-adoption","tag-office-365","tag-south-jersey-techies","tag-windows-10","tag-windows-affects-microsofts-business","tag-windows-phones"],"yoast_head":"\nSouth Jersey Techies - Windows phones' free-fall may force Microsoft to push harder on Windows 10 adoption<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/southjerseytechies.net\/blog\/windows-phones-free-fall-may-force-microsoft-to-push-harder-on-windows-10-adoption\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Jersey Techies - Windows phones' free-fall may force Microsoft to push harder on Windows 10 adoption\" \/>\n<meta property=\"og:description\" content=\"Microsoft needs to protect its access to your wallet.   Poor little Windows phone could have a bigger effect on Microsoft’s business than you’d think. 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