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Why Windows Phone Was a $7 Billion Failure

Windows Phone (WP) is a discontinued family of mobile operating systems developed by Microsoft for smartphones as the replacement successor to Windows Mobile and Zune. Windows Phone featured a new user interface derived from the Metro design language. Unlike Windows Mobile, it was primarily aimed at the consumer market rather than the enterprise market.

It was first launched in October 2010 with Windows Phone 7. Windows Phone 8 succeeded it in 2012, replacing the Windows CE-based kernel of Windows Phone 7 with the Windows NT kernel used by the PC versions of Windows (and, in particular, a large amount of internal components from Windows 8).


Due to these changes, the OS was incompatible with all existing Windows Phone 7 devices, although it still supported apps originally developed for Windows Phone 7. In 2014, Microsoft released the Windows Phone 8.1 update, which introduced the Cortana virtual assistant, and Windows Runtime platform support to create cross-platform apps between Windows PCs and Windows Phone.


In 2015, Microsoft released Windows 10 Mobile, which promoted increased integration and unification with its PC counterpart, including the ability to connect devices to an external display or docking station to display a PC-like interface. Although Microsoft dropped the Windows Phone brand at this time in order to focus more on synergies with Windows 10 for PCs, it was still a continuation of the Windows Phone line from a technical standpoint, and updates were issued for selected Windows Phone 8.1 devices.


While Microsoft's investments in the platform were headlined by a major partnership with Nokia (whose Lumia series of smartphones, including the Lumia 520 in particular, would represent the majority of Windows Phone devices sold by 2013) and Microsoft's eventual acquisition of the company's mobile device business for just over US$7 billion (which included Nokia's then-CEO Stephen Elop joining Microsoft to lead its in-house mobile division), the duopoly of Android and iPhone remained the dominant platforms for smartphones, and interest in Windows Phone from app developers began to diminish by mid-decade.


Microsoft laid off the Microsoft Mobile staff in 2016, after having taken a write-off of $7.6 billion on the acquired Nokia hardware assets, while market share sunk to 1% that year.


Microsoft began to prioritize software development and integrations with Android and iOS instead and ceased active development of Windows 10 Mobile in 2017.

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