Jul 9, 2015

Hard(ware) to Digest, Microsoft’s changes direction on Lumia

Early 2013 during my interactions with the Lumia team, gearing up for the ambitious launch of Lumia 925, there were few obvious questions., which I raised with the team. I was clear in my mind, it was not about, whether I agreed with team or not. These were what I have been hearing from consumers / users as well as during our regular research. I asked the team rationale behind their overall product and pricing strategy.

  1. How does your customer view you? Leader? Follower? Me too product? Etc.
  2. What is that a high end product buyer in India is looking for?
  3. Does Microsoft actually lives up to user experience and expectation and brand image with Lumia range?

The simple answer as most of the Marketing teams give was: we have a product that matches Apple products and in various aspects is better.

I was candid and shared the Bitter truth:

  • Pricing: I had strong views that they cannot and should not launch product at the premium. Suggested them to rework their pricing (they eventually did lower prices after initial sales took hit and stopped pitting their product with Apple).
  • User Experience: A high-end phone users will like to compromise on anything especially:
    1. Fantastic user experience with device and ecosystem.
    2. Range of apps.
    3. Range of Products.
    4. Technology should help get the best experience associated with the Brand and products.
  • Softly conveyed that arrogance of Nokia (which eventually led to their downfall) should not be taken forward.

Did the Strategy go wrong??

Yesterday’s admission by Microsoft to layoff 7800 employees, most part of erstwhile Nokia, sends a signal that they are ready to rectify mistake under new leadership. Something, which we have been predicting, will come before the 4th qtr arrives.

In our Blog dated 14th Jan 2013 we analyzed Microsoft-Nokia merger and that is going to be an uphill task for Microsoft to turnaround. There was a clear urgency to gain market share (2/3 times or maybe more) else things could turn Ugly.


Also See: Microsoft-Nokia: Few Gains, More Work http://monkconsulting.co.in/microsoft-nokia-gains-work/


Monk Mantra


For Microsoft: However not everything is lost, we believe that Microsoft will continue to remain amongst the top three ecosystem for short to medium term, but will have to quickly consolidate their position.


For Customers: Don’t rush to your next-door retailer to buy Microsoft’s product. Wait for announcements and clarity over the next few weeks.   This may not be great news for Customers, especially who don’t like Android and Apple as platform.

So choice is clearly between fragmented Android ecosystem, which is not optimized for updates and versions across various OEM’s or Apple ecosystem, not fragmented but users shell out premium for a closed ecosystem or equally troubled Blackberry ecosystem.


For Business: Again don’t rush into your discussions and wait for the events to unfold further. Derive hard bargains and look for better deals.


Funny thing is we were already operating in a practical Duopoly and hope that this step from Microsoft is like a Stitch in time saves nine.

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