No, not a Windows smartphone — although it still has a few of those gathering dust in its stores. Instead the company appears to be making the most of a bad situation by offering a Microsoft Edition Galaxy S8 in its stores.
These versions of the Galaxy S8 will get loaded up with MSFT apps so that even if they aren’t running Windows, they’re at least being used with Microsoft services.
Windows Smartphone Ambitions Are in Trouble
Microsoft had grand plans for Windows smartphones. It bought the smartphone business from Nokia Corp (ADR) (NYSE:NOK) and released Windows 10 Mobile, an ambitious operating system that brought much of the desktop Windows experience to smartphones. Neither of those moves have paid off, though. The company eventually took a $7.6 billion write-off and laid off 7,800 phone business workers because of the Nokia venture.
MSFT has done little to convince consumers to buy a Windows smartphone, not bothering to compete against Samsung or Apple Inc. (NASDAQ:AAPL) on hardware. And Windows 10 Mobile has failed to capture its own die-hard audience as Apple and Google have with iOS and Android, respectively.
At this point, Windows has dropped to a 0.3% share of the smartphone market, with MSFT selling just over one million Windows smartphones in Q4 2016 — down from about 4.4 million the year before.
Earlier this week, even as Samsung was announcing the Galaxy S8, Verizon Communications Inc. (NYSE:VZ) pulled the Lumia 735 off store shelves. This means the carrier no longer offers any Windows smartphone options.
Is the Microsoft Edition Galaxy S8 a Solution?
Microsoft has been pushing the importance of services, and having its solutions available everywhere — whether that’s Office on an iPad or Skype on an Android smartphone.
When Samsung announced the Galaxy S8, MSFT was there the next day promoting a customized Microsoft Edition Galaxy S8. Quoted in The Verge, a Microsoft spokesperson explained what this is, exactly:
“A Microsoft customization is applied to the Samsung Galaxy S8 and Galaxy S8+ Microsoft Edition when the devices are unboxed and connected to Wi-Fi. This customization ensures customers a best-in-class productivity experience with Microsoft applications such as Office, OneDrive, Cortana, Outlook and more.”
Confusing the situation slightly is the fact that all Galaxy S8 phones will come bundled with basic Microsoft apps — Samsung and Microsoft have been doing that since the Galaxy S6. The Microsoft Edition Galaxy S8 is available for pre-order, but only at Microsoft stores. Not online. And the cost will be the regular retail price for the Galaxy S8.
So no special paint job or visual difference compared to a regular Galaxy S8, no price discount and just a few additional apps that anyone can download to the Galaxy S8 on their own if they choose to do so. And you end up with three virtual assistants competing for your attention: Android’s Google Assistant, Samsung’s Bixby and Microsoft’s Cortana.
Bottom Line on the Microsoft Edition Galaxy S8
The move will get those Microsoft apps in a prominent position on a few more Android smartphones. That’s a few more people who are less likely to use alternatives from Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google.
Microsoft managed to get a few eyeballs looking its way as part of the Galaxy S8 launch frenzy. And if there are lineups for the Galaxy S8 when it goes on sale in stores, some people might skip the wait at the carriers and duck into a Microsoft store to grab a Microsoft Edition Galaxy S8 instead.
Or, it could be a delaying tactic, making it look like MSFT is doing something on the mobile front while it lines up the ducks on the Surface Phone its rumored to be working on.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.