Tuesday, September 10, 2013

Microsoft's Pepsi Challenge. Would RC Cola buy 7-Eleven to take on Coke and Pepsi?

I do like Microsoft's Windows Phone. It's solid, swift, and smooth. But, unfortunately, rather lonely and disrespected.

So, Microsoft decided to make an honest partner out of Nokia by putting a ring on it after its original strategy full of good intentions went to hell: the one-for-one switch of market share from Symbian to Windows Phone never took place. I believe that the Nokia board decided that it was time to pursue other options after a drop in smartphone market share from 30 to 3%, the exact inverse of "to decimate." The exclusivity period was coming to a close and Microsoft could not afford to be left out of the mobile game altogether.

Now, Microsoft's hope is that by vertically integrating distribution, logistics, and design, it will allow the company to speed up and increase market acceptance of its mobile platforms. Whether Nokia can help bring out the best in Microsoft will take a few years to conclude, but Microsoft is soon to be one very wide and deep company.

Once again, I'll us my cola analogy for the mobile market. No matter how huge Microsoft is, they are still the RC Cola of the mobile world. Would RC Cola challenge Pepsi's market position if RC Cola and 7-Eleven became one? Or the two also owned some major bottling company? Or a global shipping firm? Is Microsoft addressing the apathy towards Windows Phone and their confusing tablet platforms with their purchase of Nokia's handset unit? No. Microsoft appears to be working on the wrong side of the equation.

The challenges now for Microsoft are greater than ever. In mobility, it looks like Microsoft will always be the bridesmaid, never the bride, no matter how nice the dress is. Rather than offense, Microsoft is stuck on the defensive end, desperately trying to protect lost ground. The hour is late and there is little room for error.

For Microsoft, this is no game of craps. The stakes are high, and it will take more than a sales network to threaten the existing duopoly while fending off new, young, ambitious market entrants. It's time for Microsoft to wake up and smell the coffee.

Will Nokia bring out the best in Microsoft?

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