Saying No to Surface Phone (Premium Only)

For the past few years, speculation about a Surface phone has only intensified despite the failure of the platform on which it would run. I don’t know if Microsoft still plans to release this device. But it shouldn’t do so.

Note: One thing I am sure of is that Surface phone will not make an appearance at this month’s Windows 10 event.

As we all know, Microsoft is in a transition period. The cash cows of the past—Windows, Office, Server—are fading, and the software giant’s big cloud computing bets for the future face stiff competition and will almost certainly not achieve the lofty successes—financial and otherwise—of the past.

Microsoft CEO Satya Nadella has been rightfully credited with seeing this situation and addressing it head-on. But there’s only so much this company can do in the face of such sweeping industry changes.

These kinds of transitions are never pretty, but they are arguably unavoidable. Microsoft simply got caught in a familiar trap that eventually snares all industry-dominant firms: The product that brought them such great success was simply supplanted by something new and different. And they couldn’t change with the market because they were still raking in such heady revenues at the time that the change began. By the time the threat evolved into a clear extinction event, it was too late.

Look, you know this story. You know that Microsoft tried to repeat its Windows success with other products to increasingly diminishing returns. And you know that it eventually just tried to copy Apple, one of the two big companies that supplanted it in personal computing, and that this mad behavior led to disasters like Zune.

It also led to Surface.

Sporadic talk of “billion dollar quarters” notwithstanding—those are revenues, not profits—Surface will likely never be a huge business. Thanks to several billion dollars in research and development, a $900 million write-down related to a disastrous foray in tailoring the legacy Windows OS for modern ARM chipsets, and some of the worst reliability that the PC market has ever experienced, Surface has had a troubled history.

And now Surface is apparently plotting a phone.

I assume I don’t need to explain Microsoft’s far more disastrous history with phones. But when will Microsoft learn the lesson of its $8 billion Nokia boondoggle? Does anyone really believe that the Surface brand is strong enough to save Windows phone? Isn’t the reverse more likely, that Windows phone will drag down Surface with it?

Look, I loved Windows phone more than anyone. I wrote the first-ever Windows phone book in mid-2010. And I gave away my second Windows phone book for free, as a gift to that community. But it’s 2016, and that dream is over. At some point, we all need to accept uncomfortable realities.

But a Surface phone? That makes no sense. A few obvious reasons:

Surface has already failed three times with ARM. Surface RT triggered the aforementioned $900 million write-down, Surface 2 went absolutely nowhere, and Microsoft had actually started manufacturing Surface mini before Mr. Nadella woke up and finally put a stop to it. Microsoft’s ARM adventures have been a failure.

Surface doesn’t even do that well in the PC market. Despite making some attractive devices, Surface has still struggled in the mainstream PC market. According to the very latest usage statistics, Surface devices account for just 3 percent of all PCs running Windows 10. That’s about 9 million units overall, but here’s the real kicker: That’s just 1.3 percent of all PCs in the world. 1.3 percent. That’s less than Linux, for crying out loud: Linux sits at 2.11 percent usage, Netmarketshare says. The Mac is at 7.37 percent.

(The math. There are 1.5 billion PCs in use worldwide. 34.5 percent of them are running Windows 10. 3 percent of those are Surface devices. Yes, some percentage of Surface devices are probably still running Windows 8.x, but those numbers are small. So even if you want to over-estimate, you’re looking at 2 percent at best.)

Continuum doesn’t cut it. On an ARM device, Continuum is just a science experiment. Nobody wanted a Windows PC with no apps (Surface RT/2) and no one wanted a phone with no apps (Windows phone). Why on earth would combining these two things ever make sense? (And no, the answer is not UWP apps, which have fallen as flat as all of Microsoft’s recent attempts at a modern apps platform. Oh, and if phone/PCs hybrids ever do take off, it will be Android, not Windows phone, that makes that happen. More likely, however, people will continue just using the right tool for the job, and will have a phone and some other device, a tablet/2-in-1 or PC/Mac/Chromebook.)

There are no apps. I know, you hate this reality. But there are few important third party apps on Windows phone, and the number of high profile apps, overall, keeps dropping. Surface phone will do nothing to fix that.

No room for inspiration. Surface phone cannot succeed in the only way that previous Surface devices have succeeded—by inspiring other PC makers to copy its designs—because no hardware maker in its right mind would ever adopt Windows phone right now. (HP is an exception because they have a very narrow and enterprise-focused go-to-market strategy, and there are no cheaper alternatives that anyone wants anyway. But the market for HP’s Elite x3 is very limited.)

Microsoft has had enough failures. Big picture, it’s been a tough couple of years in Redmond and the last thing Microsoft needs right now is another high-profile disaster. The list goes on and on. Upgradegate.Surfacegate. Webcamgate. Batterygate. You get the idea.

Take care of the brand. There is no upside to a device that would further tarnish the Surface brand, and just draw more attention to the fact that Microsoft is stuck in the past, and still believes that it can simply succeed just by showing up.

Microsoft, this one is simple. Stop embracing that past. Say no to Surface phone.

Addendum

I’ve sat on this one for a few weeks now for a variety of reasons. I know some people will see it as being “negative” instead of just being common sense/realistic. I know, too, that Windows phone and Microsoft fans are getting tired of all the bad news. And for whatever it’s worth, I always second-guess myself. Is there some way that a Surface phone just might make sense?

Let’s step through a few obvious retorts.

Some will ask about an Intel-based Surface phone. Wouldn’t a phone that could run real Windows desktop applications, at least while docked in Continuum mode, make some sense?

Pretending for a moment that Intel hasn’t already killed off the mobile chipsets that could have gone in such a phone, the resulting device would be a very low-end computer, and not suitable for the power user and enthusiasts who envision such a thing. And of course, an Intel-based phone wouldn’t be able to run the new Windows phone apps that remain, minus the built-in and UWP apps out there.

Some believe that Microsoft simply needs to stick with phones, come hell or high water, though the rationale for that is always fuzzy. But I see this as throwing good money after bad, and as somewhat delusional. For the reasons stated above, Microsoft’s position as a client-side platform maker in personal computing only goes down over time, not up. It’s time to focus most of the firm’s efforts, people, and cash reserves on its future in the cloud.

Some, of course, simply have illogical or even selfish reasons for wanting a Surface phone. It would be “cool,” or is something they “need” (read: want) emotionally, not pragmatically. They hold onto an illusion that Windows phone can magically rise, Phoenix-like, from the ashes of today’s failures.

It cannot. Check out the blurb “Only half of U.S.-based Samsung Galaxy Note 7 handsets have been exchanged” in Paul Thurrott’s Short Takes: September 23 for why. Short version: The smartphone market has matured, and settled into a two-horse race.

Ultimately, I keep coming back to the same thing: Releasing a Surface phone would be a mistake. And Microsoft should walk away from this debacle in the making.