Microsoft: HTC has made 80% of all Windows Mobile phones

Posted:
in iPhone edited January 2014
While playing up the fact that 50 phone makers around the world have licensed the company's Windows Mobile platform, Microsoft inadvertently let it slip out that a full 80% of all Windows Mobile phones ever made have actually come from a single maker: HTC.



On stage at the Mobile World Congress, Andy Lees, Microsoft's senior vice president of its mobile communications business, stated the company had reached a milestone of 50 million devices sold over the lifetime of the platform, which stretches back into at least 2003 (and perhaps earlier, depending on how the company kept count through several names changes of its smartphone and PDA products built on Windows CE).



The Windows Mobile partner



A report by Tricia Duryee for monoNews covering the event stated that HTC CEO Peter Chou then got on stage and announced, "I?m an old veteran of Windows Mobile. We try really hard to make all the visions happen, and we have sold more than 40 million HTC Windows mobile phones around the world.? That leaves a small minority of Windows Mobile devices ever built to originate with the rest of Microsoft's range of licensees.



HTC, once known as High Tech Computer, is a Taiwanese company that began making phone sets using Microsoft software in 2002. By 2005, it had grown to sales of $2.2 billion, double that of the year before, making it the fastest growing tech company that year according to BusinessWeek.



In addition to its own HTC branded handsets, the company also acts as an ODM (original design manufacturer), selling its designs under other companies' names. That includes both phone providers such as AT&T, Sprint, T-Mobile, Verizon, Vodafone, and Orange, as well as conventional hardware makers such as Dell, HP, Fujitsu-Siemens, and Sharp.



Leaving the fold



The fact that HTC makes the vast majority of phones running Windows Mobile has been glossed over in Microsoft's marketing, which suggests the company has a broad and diverse number of hardware partners dedicated to the platform. In reality, while many makers have shipped a phone running Windows Mobile, most of them have since moved on or have primary interests elsewhere.



Last year, Samsung debuted its new Omnia and Sony Ericsson unveiled its XPERIA X1, both running Windows Mobile 6.1. At this year's WMC however, Samsung was prominently touting its OmniaHD and Sony Ericsson the Iduo, both of which are now running Symbian instead.



Just prior to the event, Palm showed off its new Pre, running the company's new, internally designed webOS rather than Windows Mobile, which Palm began using in 2006. When Palm began licensing Windows Mobile in its Treo smartphones, it doubled Microsoft's software market share of US smartphones at Palm's expense. Seeing Palm strike out on its own is not good for Microsoft, but it's also unwelcome news to HTC as well, which actually built the Treo for Palm.



Even more strikingly, HTC itself joined Google's Open Hardware Alliance as a founding member in 2007 to promote Android, which serves as a free and customizable drop-in replacement for Windows Mobile. It then released the first Android-based phone last fall, the T-Mobile G1. If HTC were happy with Windows Mobile, endorsing and promoting Android is a strange way to express that.



Stealing the show



Facing the loss of its primary licensee, Microsoft stepped into overdrive to promote the future of Windows Mobile at this year's WMC. That included announcements with HTC of two new phones which will run Windows Mobile 6.5, due later this year. (According to the company, only phones released during or after WMC will be able to run the new software release; it will not be available to existing users.) HTC was forced to release its next Android phone the second day of the conference under the Vodafone brand; it will be sold exclusively in Europe by that provider.



Microsoft also spent money courting another Android OHA founder: LG. That company said it wouldn't delay its Android phones planned for release this summer, but also wouldn't be showing them at WMC. Instead, the company promoted its new co-marketing relationship with Microsoft, including a new series of Windows Mobile 6.5 phones. Those new phones won't be ready before LG's Android models, but were all LG could show at WMC given its high profile promotional deal with Microsoft.



Microsoft also announced SkyMarket, its answer to the iPhone App Store, and My Phone, its alternative to Mobile Me cloud sync and push messaging. The company also presented plans to spark the moribund Windows Mobile business by rechristening its handsets as "Windows Phones" and forcing all licensees to add a Windows Start button to their devices, just as it did on the PC in 1995.



Microsoft's catch up strategy



Of course, back in the days of Windows 95, Microsoft was already in a monopoly position on the PC desktop with DOS. In the smartphone world, Microsoft's market share is around 13%, far behind phone giant Nokia, but also slipping behind RIM and even dipping below Apple at the launch of the iPhone 3G. It also faces new competition in the software licensing business from Symbian and Android, both of which are emerging as free, open source alternatives to Windows Mobile.



When asked by mocoNews, "Why has Apple been able to move the market so rapidly and Microsoft hasn?t?" Microsoft's Lees answered ?What Apple was able to do was integrate hardware and software very closely. It benefited from having the first-mover advantage." That phrasing is particularly interesting given that Microsoft, Nokia, Palm, and RIM were all in the smartphone business at least half a decade before Apple "first moved" with the iPhone.



Lees added, "Our fundamental strategy and our choice is to drive innovation by having different form factors vs. having one phone out at the same time. This approach takes slightly longer to move an industry. You saw it in the early days of the PC, too. The same thing happened where Apple had 35 percent share of all the PCs sold, but they weren?t able to compete over the long-term."



Apple may have had 35% of the market before the PC arrived back in the early days of the Apple II in the late 70s, but it was Microsoft who had and lost a "first mover" 24% share of the smartphone business in the more recent and relevant history of 2004, and was subsequently "not able to compete over the long-term." Back in 2005, Microsoft also used similar analogies to explain why PlaysForSure would push the iPod out of the way, something that the "choice and innovation drive" related to Windows Media was ultimately unable to do.



The core of Microsoft's new strategy, as Lees explained: "We moved our organization from being focused on business, and now it?s more focused on the consumer." Further, in what might come as a shock to the company's licensees, and particularly HTC, Lees said "The focus has been on the device and now it?s shifting to the software on the device." And how it will achieve this: "Every phone will have a [physical] button to get to the start menu. People will know they want a Windows Phone for both business and consumer services."
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Comments

  • Reply 1 of 34
    Quote:
    Originally Posted by AppleInsider View Post


    While playing up the fact that 50 phone makers around the world have licensed the company's Windows Mobile platform, Microsoft inadvertently let it slip out that a full 80% of all Windows Mobile phones ever made have actually come from a single maker: HTC. ...



    I guess this just includes the Windows Mobile brand and not Windows CE or Pocket PC then. Back then, Palm & Windows owned the entire market and HTC did not even exist yet.
  • Reply 2 of 34
    Quote:
    Originally Posted by Virgil-TB2 View Post


    I guess this just includes the Windows Mobile brand and not Windows CE or Pocket PC then. Back then, Palm & Windows owned the entire market and HTC did not even exist yet.



    It's possible that HTC were making the handsets for them even then though.



    Putting my fanboy hat aside, MSFT really do need to look at how they are promoting themselves and their products. To keep saying that their open choice innovation model is the way forward is ok in an optimistic sort of way. But they keep using it to deride Apple's closed model.



    This just makes them look slightly foolish because there aren't too many people who wouldn't agree that Apple's business model seems to be about as near to perfect as you'd want a business to be running in this climate.



    "Is that an iceburg up ahead?"



    "Never fear, we're unsinkable!"
  • Reply 3 of 34
    Lees seems to say being licensed on various hardware items is "new" and "innovative" when it's exactly what they've been doing all along. MS likes to market itself as "innovative", when the only thing it innovates is new marketing strategies (and marketing firms it fires and replaces).
  • Reply 4 of 34
    Quote:
    Originally Posted by Virgil-TB2 View Post


    I guess this just includes the Windows Mobile brand and not Windows CE or Pocket PC then. Back then, Palm & Windows owned the entire market and HTC did not even exist yet.



    HTC made the O2 XDA, Vodafone MDA, Dell AXIM handhelds, Compaq iPaqs and more....
  • Reply 5 of 34
    For a second there Mr. Lees actually convinced me that in the business arena slow and lumbering is really better than quick and agile. The secret to an effective RDF is that you don't make claims that are so preposterously farfetched as to jar the subject out of the zombie state.



    And can he just quit with the fiction that MS was able to dominate the PC industry because its product was superior to all? It is IBM that established dominance over the PC industry and then due to its own inept contracting handed it off to Microsoft. Microsoft has never, ever profitably dominated any market based on superior product quality. Any successes they had always relied on the OS monopoly that IBM gifted to them.
  • Reply 6 of 34
    Quote:
    Originally Posted by retroneo View Post


    HTC made the O2 XDA, Vodafone MDA, Dell AXIM handhelds, Compaq iPaqs and more....



    They may have manufactured the iPaq, but they didn't make it in the sense of designing it AFAIK. Can't even remember who made my nino.
  • Reply 7 of 34
    foo2foo2 Posts: 1,077member
    Who's responsible for recycling the garbage?
  • Reply 8 of 34
    Quote:

    The core of Microsoft's new strategy, as Lees explained: "We moved our organization from being focused on business, and now it?s more focused on the consumer."



    This is such a weird thing to say...a business should be focused on the consumer; and the consumer should be/drive the business. These aren't mutually exclusive in any way...or shouldn't be at least.



    Microsoft is just such a depressing company all around. To have so many resources and people at your disposal and continually churn out sub-par products. It must stem from a serious lack of organization and communication within the company.



    John Tantillo has a marketing blog and typically does weekly winner/loser posts. Microsoft has been the 'loser' multiple times, but last week, with the announcement that Microsoft would be opening retail stores and that David Portner would be heading up the effort, he named Microsoft the winner... for at least realizing that they need to make some changes...I have a hard time imagining the stores as anything other than a way for Microsoft to over-extend itself, but it will be a place for their phone to at least have a chance to sell...or perhaps just fail more dramatically.
  • Reply 9 of 34
    ak1808ak1808 Posts: 108member
    Quote:
    Originally Posted by sloane View Post


    This is such a weird thing to say...a business should be focused on the consumer; and the consumer should be/drive the business. These aren't mutually exclusive in any way...or shouldn't be at least.



    I think he means business customers as in enterprise customers vs. consumers. If you look closer, MS makes most of their money with big companies & OEMs.



    This idea that an open system has to be superior is a meme I seriously doubt. If a complex thing like the history of Windows vs. Mac is your only datapoint, I would be careful to draw such simple, mechanistic conclusions. I would also be careful, to build all my other business around such a simple model. I get the feeling that that whole idea is just plain wrong:

    - Are there any other examples where it was true?

    - How many exampes do we have where it wasn't true?

    - Is open source even more open and therefore automatically superior?

    - What kind of openness is required? iPod has Dock connecter and takes on many music formats, that's open too? iPhone adds an app store and a web browser -> even more open?

    - Microsoft seems to focus on hardware-openness, e.g. everybody uses Windows but on all kinds of hardware. Is that an interesting choice point? Could a vertical vendor offer enough hardware choice? How much potential is sacrificed by being hardware-open?



    So, the "openess-meme" seems to me overused by MS and oversimplified. Hardware-openess is just one of many factors and does not automatically lead to success.
  • Reply 10 of 34
    I think we'll soon see Microsoft going head to head with Apple/Palm using a vertical model. These days, when it's all about the software on the phone rather than the phone itself, it makes no sense to have hundreds of different devices to run the same OS. It's different to [how] PCs [were] in the sense that small variations in specs between handsets don't really mean anything... It's not like a consumer is actually going to choose the fastest phone to run a particular app, although some may elect to buy the model with the best camera, or whatever.



    My point is, it's all about software, not hardware, these days. If Microsoft doesn't bring out a 'Zune phone' or something else along a vertical model, I would think the only reason would be its fear of having a directly comparable model to Apple; then they can't hide behind their 'consumer choice' excuses. The Zune didn't follow their traditional model, and still got crushed by the iPod... maybe they're sticking to what they know to avoid embarrassment.



    But because it's all about the software, all their WinMo devices will start to look the same anyway. And all will suffer from a lack of investment and commitment to good design. Much like PCs...



    Microsoft isn't recognising that its Windows model is failing, and succeeded as much by luck/lack of competition as good judgment. It's not the same this time round, and as the article indicates, Microsoft aren't starting with the monopoly they're used to. I feel embarrassed for them.



    Having said that, I think the tone of this article is fairly condescending and that it wasn't particularly necessary on AI. It's not really that relevant to Apple... just comes off as gloating.
  • Reply 11 of 34
    Quote:
    Originally Posted by tundraboy View Post


    Microsoft has never, ever profitably dominated any market based on superior product quality. Any successes they had always relied on the OS monopoly that IBM gifted to them.



    MS Office anyone?
  • Reply 12 of 34
    Quote:
    Originally Posted by donvreug View Post


    MS Office anyone?



    Nope : not even that ! MSOffice licences were initially given away as a package deal with Windows licences... And why pay for WordPerfect and Lotus when one could have a free MSOffice licence ? This is how MSOffice got in the various brick and mortar offices...
  • Reply 13 of 34
    richlrichl Posts: 2,213member
    To call Windows Mobile moribund is a massive exaggeration.



    Windows Mobile is not on the verge of extinction, it's simply a niche product. It's a niche product supported by a niche manufacturer (HTC). The bigger manufacturers know that it's a niche product and have therefore only deployed it on a handful of models each. Some have sold reasonably well, some have not. Despite its niche status, the general trend in sales is upwards for Windows Mobile.



    Having said that, Microsoft's strategy has been extremely short-sighted. They poured resources into beating Palm in the PDA sector only to see the PDA become irrelevant. At this point, Microsoft decided to rest of its laurels despite being outsold by Nokia's new smartphone line by around eight to one. Perhaps they wanted to stick to what they knew best (enterprise) but it must have been obvious that smartphones weren't going to be the preserve of big business in the long run.



    Microsoft's new strategy of targeting consumers is the obviously the right one but it's come five years too late. Even now, this new strategy doesn't appear to have been fully executed in Windows Mobile 6.5. The Zune might be playing second fiddle to the iPod but its interface is still far superior to that of Windows Media Player on Windows Mobile. Why haven't Microsoft ported it across? I won't even start on Microsoft basing Windows Mobile's new browser on IE6.



    In the long term, the biggest barrier for Microsoft will always be cost. It's reported that a Windows Mobile Professional (aka Pocket PC) license costs $15. That's fine if you're making a niche device selling 100,000 - 1mil units since I'm sure Microsoft throws in some support for that money. However, once you start talking about tens of millions of units, that license fee starts to become a problem. Who wants to pay hundreds of millions of dollars to Microsoft when the competition from Symbian and Google is free? Microsoft can neither remove its license fee or make the OS open source. It's stuck as a niche player with no way out.
  • Reply 14 of 34
    rayzrayz Posts: 814member
    Not really sure what the big deal is here. HTC happens to make the hardware for just about everybody.



    You'll probably find that there is also one major laptop manufacturer who builds the machines for just about every company, including Apple.
  • Reply 15 of 34
    MacProMacPro Posts: 17,586member
    Quote:
    Originally Posted by donvreug View Post


    MS Office anyone?



    I still have my Microsoft Office disks for the Mac Plus all dated 1985, (although personally I always preferred Visicalc /// on the Apple /// to MultiPlan). I seem to recall Apple kind of helped M$ get going on that whole Office thing. Could it possibly be yet another idea from Steve that M$ built on?
  • Reply 16 of 34
    As Ray said, HTC just happens to be the best ODM.



    HTC made the SE Xperia, it made many Treo's, its making the Palm Pre. It has made many many carrier branded devices in USA and worldwide. It made many PDA's also.



    So Windows Mobile just should just as many devices as RIM - Windows Mobile is moribund but RIM is not?



    Are the Apple crowd feeling threatened, that they have to run these bash articles which fall apart on simple inspection?



    You can talk when Apple delivers its answer to the HTC Touch Pro 2, the most desirable device of MWC 2009.



    What's Apple going to deliver in June - video recording?
  • Reply 17 of 34
    pmjoepmjoe Posts: 565member
    This may be the dumbest article ever to appear on AppleInsider.



    The author should've clearly realized that as an ODM (original design manufacturer), HTC makes a large percentage of the mobile hardware out there (if not the majority), period, no matter what OS it runs. The article is a hodgepodge of meaningless factoids. What's next, an article on whatever manufacturer it is making 100% of the iPhone OS phones? I can pretty much guarantee they don't just make iPhones either.
  • Reply 18 of 34
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by pmjoe View Post


    This may be the dumbest article ever to appear on AppleInsider.



    The author should've clearly realized that as an ODM (original design manufacturer), HTC makes a large percentage of the mobile hardware out there (if not the majority), period, no matter what OS it runs. The article is a hodgepodge of meaningless factoids. What's next, an article on whatever manufacturer it is making 100% of the iPhone OS phones? I can pretty much guarantee they don't just make iPhones either.



    Right? Where's the article on how all Apple products are made in China but designed in California.
  • Reply 19 of 34
    boogabooga Posts: 1,075member
    Quote:
    Originally Posted by Pascal007 View Post


    Nope : not even that ! MSOffice licences were initially given away as a package deal with Windows licences... And why pay for WordPerfect and Lotus when one could have a free MSOffice licence ? This is how MSOffice got in the various brick and mortar offices...



    Yeah, but MS Word and Excel were far and away the best word processor and spreadsheet available for the Mac in the 80's. Back then, Office was a Mac-first product with most of its revenue coming from the Mac. It wasn't until the OS/2 vs. NT debacle in the 90's that Office really gained a foothold in the Windows side. The folks who bet on OS/2 (sometimes at Microsoft's urging) were deprecated and Microsoft Office was the best NT Office suite out there.



    So while it's not cut-and-dried, there's definitely an operating system link to Office's dominance in business.
  • Reply 20 of 34
    bigebige Posts: 12member
    Quote:
    Originally Posted by Virgil-TB2 View Post


    They may have manufactured the iPaq, but they didn't make it in the sense of designing it AFAIK. Can't even remember who made my nino.



    Philips. Yep, I had one, too.
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