It is vital for any vendor to carve out a strong position in China, not only the largest consumer market in the world but increasingly a hotbed of device and mobile services providers. In Microsoft’s case, there is also the added attraction that China is the Achilles’ heel of its arch-rival Google, since the search giant is virtually excluded from many web services, despite the prevalence of Android.
The eagerness of Chinese brands to create de-Googled implementations of Android, or even full forks – and completely new operating systems such as Alibaba’s Aliyun – may give Microsoft hope that it can position Windows 10 as an alternative to Google, with greater functionality and ecosystem than the homegrown platforms (Baidu recently gave up on its cloud OS, indicating that, even for these software powerhouses, getting developer and OEM support for an immature system is tough).
No surprise, then, that the run-up to the full Windows 10 launch is heavily China-focused, with Microsoft holding a major preview event in the country this week, and announcing alliances with Lenovo and, more surprisingly, Android handset maker Xiaomi.
The choice of Xiaomi as a key testing partner for Windows 10 demonstrates the opening of the ecosystem, which is part of the reinvention of Microsoft under CEO Satya Nadella and his ‘cloud first, mobile first’ mantra. That has involved going far further than his predecessor into open platform services, for instance by launching the mobile/cloud release of Office on iOS first, not Windows. However, the umbilical cord with the homegrown operating system will not be cut completely unless Windows 10 flops – and Microsoft will throw everything at avoiding that outcome, especially after the problems with the confused Windows 8 launch. That should mean that W10 will not just be a very different platform, better suited to coexisting in a multiplatform, cloud-driven world, but that it will be rolled out differently too.
So the partners will be different and Microsoft will move right away from the walled garden approach of former CEO Steve Ballmer – who, for instance, initially restricted partner access to Windows Phone 8 in order to preserve quality of experience. By contrast, Microsoft is now opening its environment to unfamiliar associates, and accepting the need to move aggressively into the other mobile platforms, not just to try to outdo them from behind high walls.
So the US firm is inviting a select group of users of Xiaomi’s flagship smartphone, the Mi 4, to download the Windows 10 Technical Preview to their phone, and offer feedback. Such initiatives show Microsoft reaching out to ‘power users’ of other platforms to try to reawaken their interest in Windows. Xiaomi has not said it will build W10 handsets, and stressed on its website that the testing program was “entirely Microsoft-led”, but clearly any alliance with the rapidly growing handset supplier would be a significant coup for W10.
Windows 10 will arrive in 190 countries and 111 languages this summer, Microsoft told the WinHec event in China, designed to attract interest and support in this vital market. The giant has also formed partnerships with Chinese PC maker Lenovo and web providers Tencent and Qihoo 360. They will all provide upgrade services and Lenovo will build at least one W10 smartphone for release in China around the middle of this year.
This is important because it shows a PC giant like Lenovo adopting Windows 10 as a multi-device OS, not just confined to laptops. With Windows Phone, for all its rich features, languishing in the single digits of smartphone market share (and below 1% in China, according to Kantar WorldPanel ComTech), it is critical for W10 that it crosses the divide and becomes a truly cross-platform system. Otherwise it will be in the defensive position of targeting post-PC and cloud devices without a mobile base to build upon.
The Lenovo smartphone(s) will be available through China Mobile around mid-year, which will also be important from a visibility point of view, since Mobile is the largest Chinese carrier. But Microsoft has a great deal more work to do in China – it recently lost Huawei as a Windows Phone backer, and it currently makes 90% of Windows Phone devices itself, following the acquisition of Nokia’s handset operations, a pattern it will not want to carry over into W10.
Manufacturing low margin hardware is a tough business to support within the financial norms of a software company, as Google found when it acquired, and then sold, Motorola Mobility. It will be essential for Microsoft to create a broad ecosystem of OEMs to support W10 – not just the traditional PC partners, but all kinds of manufacturers in the mobile and consumer electronics worlds – a rising number of which are based in China.
There is a significant opportunity in the fact that many Chinese companies make many types of devices, and have often diversified their ranges more successfully than their US rivals (Lenovo by acquiring IBM’s PC business and Motorola Mobility, for instance, while US counterparts Dell and HP have repeatedly failed in the smartphone sector). This gives Microsoft the chance to push W10 as a single OS for a vendor’s entire range, enabling new types of multiscreen and cross-platform services to enhance the value of the hardware. Google can do that too, as Android and Chrome increasingly converge, but has the big problem that the web services with which it monetizes its open source platforms are sidelined in China, so its ability to profit from Chinese alliances is largely confined to their international activities.
Windows 10 will not be fully converged of course. The important step towards unity is that it is built on a single, common ‘core’ (known internally as OneCore) which goes beyond the common kernel introduced for Windows 8 and WP8. In addition to the OS kernel, OneCore also includes the dynamic link libraries (DLLs), application platform layer and other key OS elements, so that apps will work across different screen sizes and will be sold from a single store, rather than separate ones for Windows, WP8 and Xbox.
This does not mean there will, at this stage, be just one SKU – there will still be multiple variants optimized and priced for different device and screen types. So convergence won’t be an overnight process for Microsoft – despite a fair bit of preamble during Windows Phone and Windows 8 – any more than it is for Google and Apple.
For current users, the transition should be far less difficult than it was for PC Windows 7 owners to shift to W8, especially the ARM-based WRT version. Microsof has promised free upgrades to customers with Windows 8.1, Windows 7 and Windows Phone 8.1 for the first year W10 is on sale. It will be updated on a cloud-driven ‘as a service’ basis. EVP Terry Myerson said last year: “One can reasonably think of Windows as one of the largest internet services on the planet.The question ‘What version are you running?’ will cease to make sense.”
Provided Microsoft gets the upgrade process right – always a pitfall in mobile – there will be many commonalities between WP8 and W10 mobile, because the latter has taken so many ideas from the former. So the W10 start screen, on a handset, looks very like that of WP8, with large numbers of tiles, and live notifications which sync with the PC.
The OS variants may not be identical, but increased syncing may make them appear so when users move between handsets, PCs, Xboxes and other products. For instance, there are universal apps across all device sizes, including the Office modules and Cortana; and increased integration of IP messaging services, including Skype, which has previously been left standalone. There is also better interaction with Xbox. Microsoft has integrated DirectX 12 into W10 to improve gaming and media performance across form factors, pointing to even greater unification of the Xbox and Windows user experiences in future.