How Microsoft lost the wireless smartphone wars

Microsoft is a powerful company. It is a leader with Windows OS and software like Office. Yet over the past decade, it has tried and failed in the wireless and smartphone markets. Why is such a successful company also such a failure?

SquareHome 2 Windows Phone launcher
JR Raphael / IDG

Why, if Microsoft is such a successful company, has it failed in wireless and smartphones over the last decade? Sure, it still leads in operating system wars with its Windows OS and its software like Office, but that may have as much to do with lack of real competition than the more important customer satisfaction. So why has the company having so many problems in wireless?

If we pull the camera back, we can see the wireless and smartphone wars have claimed many victims over the last decade or two. Ten years ago, the smartphone space was led by Blackberry and Nokia. Ten years before that it was Motorola. All have now fallen to the bottom of the list as Apple's iPhone and Google's Android entered the arena and rapidly grew.

Apple iPhone growth curve may be cresting

Apple is also recently struggling with iPhone growth. This is a company which is built on the iPhone. Apple nearly went out of business in the 1990’s, but when it launched the iPhone twelve years ago, it was reborn. Now it is the largest company in the United States.

However, recent numbers may be revealing that growth is slowing at Apple.

Microsoft is a story of a powerful company with seemingly brilliant leadership before it was broken up by the US Government in the 1990’s because of anti-competitive behavior.

In the early years, this was a small and scrappy entrepreneurial company which had to rob Peter to pay Paul. Then it quickly grew into one of the most powerful tech companies in the world.

What happened next? The same attacking behavior that helped put the company on the map should have been reined in as it became dominant, but it wasn’t. And because Microsoft abused its strong leadership position, it was eventually taken apart by the US Government.

That’s when their trouble started.

Microsoft praised for ingenuity when it was young

Microsoft's behavior, when it was young, is what was needed to keep it alive in the early years. However, as it grew and became powerful, the company needed to change. But it didn’t change. It didn’t moderate. It kept using the same bullying tactics to bury its competitors.

That bullying behavior worked when Microsoft was young and small but backfired when it became powerful because it did not moderate itself.

Microsoft's behavior was its strength and its weakness. Over time, the young whippersnapper grew into a bully that had to be taken down by regulators. If the company had moderated itself from the start, it might never have been broken up.

Microsoft broken-up by US government for same behavior that built it

Microsoft's leadership was caused in part by its ability to bundle together Windows with its other proprietary software like Word, Excel, PowerPoint, and more. Its leadership in web browsing with Internet Explorer was another factor in what built the company into a powerhouse.

After the breakup, Microsoft simply could not get its act together. Sure, it was still the powerful company it had grown into. It still had loads of cash, which gave the company much more time than the average business to try to create the growth wave it once had when it was smaller.

However, it seems new businesses Microsoft tried to move into failed. That failure has not ended and, in fact, may be spreading -- as it seems to be spreading with Apple.

Microsoft tried but couldn’t succeed in smartphone wars

The fall has been very dramatic and almost unbelievable. The Microsoft IE, or Internet Explorer, business was once the primary web browser in the world. Microsoft owned the space. However, that leadership made the company lazy. It had no one to compete with. It took forever to issue updates which were more for security and less on innovation.

That’s when competitors like Google and Mozilla stepped in and took over the search engine business which was like ripping out the rug from underneath Microsoft. The company has been struggling ever since.

It tried to reinvent the search space again with its current Edge browser. That’s where the company put its time and efforts. However, Edge didn’t take off like Microsoft had hoped. Google still had the advantage and was innovating too quickly for Microsoft to ever catch up.

Microsoft tried and failed in wireless smartphones

Microsoft tried wireless over more than a decade. It started with regular handsets and then moved into smartphones to compete with new players like iPhone and Android. The company could have been successful. After all, it is Microsoft. It has tons of existing users who could have all been wireless users as well.

The truth is iPhone and Android completely changed the wireless smartphone space. So, success and transformation can and did take place. Just not with Microsoft. The company already had the user base. It just didn’t have the ability to deliver what the world and its users wanted.

Microsoft had the smarts. It just didn’t have the pieces of the puzzle that made the difference. The company also didn’t have the innovation or the connection with its users. Microsoft always wanted to do things its own way. It never got close to the needs or wants of its users because it never thought it had to. After all, it was Microsoft. But that’s what is hurting the company and has been over the last decade or two.

Microsoft struggled with many different ideas which simply missed the mark. This went on year after year and never got any better.

Microsoft ultimately lost these two battles for search engines to Google's Chrome and Mozilla's Firefox and wireless smartphones to Apple's iPhone, Google's Android, and Samsung's Galaxy.

This was a painful lesson to learn. Just because a company is very successful in one area is no guarantee it can duplicate that success in other areas.

New problems with Microsoft Word: missing “Recents” file

Microsoft Word has had some real problems lately. Twice in the last month, the “Recents” file has vanished. That means there is no longer a list of recent files you have worked on. So, you have to remember where each file is stored in a massive directory. If you are like me, you’ve been building that enormous list of files for decades. There are thousands of them.

The problem I am experiencing is with Word on a MacBook. After asking lots of different people, I have learned that this has been a problem for many others for quite a while. Many people have been experiencing this problem more than once -- just not all at the same time.

Areas where Microsoft is disappointing users

So, these are just some of the areas where Microsoft is really letting its users down. When we think about Microsoft, we think of a large and powerful corporation. While that may be true, it is also a company that can’t seem to shoot straight. And users are noticing.

The problem is Microsoft is too insular. It is not close to its users. It puts out what it wants to put out whether the user wants it or not. That has been a mistake from the beginning. And it is not changing.

These problems could continue to develop into a real growth problem for the company. These are areas that are screaming to be fixed before it’s too late. Microsoft is a giant, but the problems aren’t going away.

However, growth is what is key for the company going forward. I have learned over the last several decades this is how Microsoft operates. Can the company fix this growing problem, or will it simply throw in the towel as it did with its smartphones? The next step is up to Microsoft.

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