Windows Phone: More High-End Devices Coming Soon

As Windows Phone loses market share, Microsoft exec says HTC One (M8) and other new flagship devices could bolster demand.

via a device's touchscreen. He also noted that new features such as Cortana, the Windows Phone 8.1 digital assistant, do not require client upgrades because almost everything runs in the cloud. Microsoft execs have argued this cloud focus helps low-end devices maintain a high-level user experience.

Microsoft's new hardware standards enable OEMs not only to make cheaper devices, but also to more easily retrofit existing high-end models. Because Windows Phone no longer requires physical buttons, for example, HTC didn't have to redesign the One (M8) hardware it had already designed for Android.

Not all Windows Phone 8.1 flagships will derive from existing Android models. When Microsoft gets around to releasing a flagship Lumia, for instance, the hardware will be designed expressly for Windows Phone. But it's important that Microsoft gave OEMs this flexibility to reuse ideas.

At the high end of the market, devices such as the iPhone enjoy tremendous product loyalty. Apple doesn't lose market share because it loses customers; it loses market share because the low end of the market, where Apple doesn't bother to compete, is growing faster than the high end, where Apple dominates.

Samsung, meanwhile, eats up most of the high-margin opportunities left over by Apple, and Android devices are slowly gaining share in business settings, where Apple owns the mobile scene. These challenges won't persuade many OEMs to commit major resources to a fleet of expensive new Windows Phone devices, at least not until the OS shows more life. But by enabling OEMs to reuse existing hardware investments, Microsoft is allowing partners to produce attractive devices without assuming so much risk.

"The software shift enabled existing devices that didn't run our previous specifications to run our software," Sullivan said.

The earlier specifications, however, were established under an important goal: to create the kind of tight hardware-software integration that made the iPhone so popular. Sullivan said the looser hardware standards don't compromise this strategy, noting that Microsoft engineers worked closely with HTC counterparts. Even though the HTC One (M8)'s Dot View cover already existed for Android, the Windows versions includes the ability to invoke Cortana, he explained, adding that such efforts help the hardware to "light up" Windows Phone's digital experiences. 

Time will tell if the One (M8) and other high-end Windows Phone handsets create the "halo effect" Sullivan described, stimulating demand for lower-end models. In the meantime, some users of the original version of Windows Phone are still waiting to receive Windows Phone 8.1. Sullivan said the update should run on the vast majority of existing Windows Phone 8 smartphones and that carriers were working to push out updates as quickly as possible.

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