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  • Solving Microsoft's Windows Phone Problem 0 comments
    Aug 19, 2014 4:25 PM | about stocks: MSFT, AAPL, GOOG

    The market share problem for the Windows Phone is highlighted in yet another report - IDC Q2 2014 report (www.idc.com/getdoc.jsp?containerId=prUS2...).

    Here is one of the comments that I read - WP fans are more serious about WP than Microsoft itself. Which is yet again evident from Microsoft's just released HTC One M8 phone exclusive to Verizon, knowing very well that this strategy hasn't worked well since last two years.

    However, I think the bigger challenge for Microsoft is highlighted in below two excellent articles about how Windows Phones are treated at the channels.

    1. http://www.neowin.net/news/when-talking-with-customer-service-reps-it-becomes-clear-why-windows-phone-isnt-selling-well

    2. http://windowsitpro.com/windows-phone/verizon-att-t-mobile-and-sprint-blame-windows-phone-market-share

    People selling phones are also humans and hence obviously they also have their own biases. Therefore, I am not surprised that more often than not they end up discouraging people from buying WPs. This is understandable because chances of them using iOS or Android are 97% and people tend to promote what they know. So they may be discouraging WPs, not because they want WP to fail but just because they do not know any better.

    I am a happy user of WP since last two years. I am so delighted with it that my friends call me an active promoter of WP. However, the biggest challenge that I have personally seen is that people immediately ridicule WP, without even giving it a chance. So how does one overcome this challenge?

    If I was the decision maker for marketing spend at Microsoft, here are two things that I would immediately do for WP marketing:

    1. Hand out top end windows phone (Lumia 930 or HTC One M8) to all the store employees of AT&T, Verizon and T-Mobile (if not all operators) - This will give these store employees a firsthand experience of highest end Windows Phones. This way Windows Phone will occupy some mind share, every time these people have conversations with customers for new connections or upgrades. The rough estimates of the cost are $12.5mm (25k store employees @ $500 per unit cost of phone)
    2. Set up a Windows Phone Booth at least 10,000 stores of AT&T, Verizon and T-Mobile - This booth will be similar to Apple booths in all these stores. Each booth will showcase the best Windows Phones available in all their glory. They will also be set up properly and be available to explore all phone features. This will ensure that Windows Phones will not get lost in the back rows somewhere, where customers never reach out. Again the rough estimates of cost for this will be $20mm (10k booths at 2000 per unit cost).

    So the total cost should be around $33mm. If we include $20mm more for working out this arrangement with the operators, the total cost would be approx. $55mm. I am sure Microsoft can find this money from somewhere for this (given that they had $500mm set aside for marketing in 2013).

    Now that Windows Phone is at par with iOS and Android and Microsoft has signed up more partners to produce variety of hardware, the only missing piece of the puzzle is fixing the distribution and supply chain issues.

    Hope someone influential from Microsoft is reading this J

    Disclosure: The author is long MSFT.

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