Preston Gralla: Microsoft's mobile corpse stirs with signs of life

Microsoft's mobile computing initiatives have been written off as DOA for years. But something has been happening while you weren't looking: Microsoft is beginning to show flickering signs of life in the mobile sphere.

Up to now, Microsoft's failures to get a foothold in mobile computing have been spectacular. It had a smartphone operating system and a tablet years before Apple, but it could never capitalize on that head start. Internal turf wars, technology false starts and a lack of understanding about how people really want to use mobile devices all played a role in Microsoft's mobile demise. The company's low point may have been the 2010 release of the Kin, a phone that required a data contract but couldn't run apps. After less than two months on the market, Microsoft mercifully pulled the plug. It was an expensive and embarrassing venture; Microsoft had paid an estimated $500 million or more to buy the company that made the Kin, and it took a $240 million write-off for killing it.

Of course, Microsoft is nothing if not persistent when there are markets to be conquered. It's still taking a whack at mobile, with Windows Phone and the Windows 8 and RT tablets. Still without much traction, though. The obituaries have been written, if not published. But it may be too soon to call for the last rites: People are starting to buy Windows 8 tablets and Windows phones.

Microsoft's mobile numbers aren't at the level it's accustomed to in areas like desktop operating systems and productivity suites. Windows tablets are at 7.5% market share, according to Strategy Analytics. IDC says Windows Phone 8 devices were at 3.2% in the first quarter. Those figures aren't likely to worry Apple and Google too much -- yet. But they're on the rise. The Microsoft mobile corpse has been reanimated.

Let's put those numbers in perspective. Microsoft's tablet share is dwarfed by Apple's 48.2% and Android's 43.4%. But a year ago, the Windows numbers were so insignificant that Strategy Analytics wasn't even tracking them.

As for Windows Phone, that minuscule 3.2% is enough to make it the third most popular smartphone operating system, surpassing BlackBerry's 2.9%. Of course, Android, at 75%, enjoys the kind of market share that Microsoft is used to commanding. But momentum matters, and that's something Apple is in a position to appreciate. Its iOS has a 17.3% market share. A year ago, it had 23%, against Windows Phone's 2%. So in 12 months, the gap between iOS and Windows Phone shrank from 21 percentage points to 14.1.

Can Microsoft capitalize on its momentum? I wouldn't bet against it. It is poised to roll out budget smartphones, which will help with its strongest smartphone demographic, first-time buyers. Mary-Ann Parlato, an analyst at Kantar Worldpanel ComTech, wrote in a recent report that "with over half of the US market still owning a featurephone, it's likely that many will upgrade over the coming year, which will ultimately contribute to more growth for the Windows brand." And Microsoft has published design specs for 7-in. Windows 8 tablets, which would help it compete in the fast-growing market for small tablets.

So while it's true that Microsoft still lags well behind its competitors in mobile, it finally has a foothold in the market. And while the company has a tendency to blow early, first-to-market advantages, it's much more successful when it has a second chance.

Preston Gralla is a contributing editor and the author of more than 35 books, including How the Internet Works (Que, 2006).

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