Verizon Wireless Chief Marketing Officer, Marni Walden, while speaking to CNET, said that Windows Phone needs to support LTE in order to compete. She said that they have communicated to Microsoft that LTE is critical for Verizon Wireless and that they need to see a timeline, if Microsoft expects them to continue to represent Windows Phone.
Ouch! This is the first time Verizon Wireless has come out and pointed at a specific problem they have in carrying more Windows Phone devices. Currently, the only Windows Phone they carry is the HTC Trophy, which is a first generation device, released a few months after the OS supported CDMA. There have been no announcements about a Mango device coming to Verizon Wireless.
The stakes are high for Microsoft (and related, for Nokia especially, in its return to the US market). Verizon Wireless is the largest mobile network in the US at 107.7 million subscribers. At the same time, due to AT&T’s initial exclusivity on the iPhone in the US, Verizon ended up becoming an Android champion. They started a huge marketing campaign around their trademark Droidand became a close partner of Google. Meanwhile, iPhone is now also available on Verizon network and as a result they now have arguably the best portfolio of smartphones in the US. Windows Phone clearly has an uphill battle to get the carrier’s attention. Getting cut out of Verizon Wireless will take half the addressable US market away from Microsoft.
In a lot of ways, what Verizon Wireless is asking makes sense. On one hand, they carry the juggernaut that is the iPhone, and on the other hand, they have a slew of Android devices which come in various form factors, with a variety of hardware differentiators and at all kinds of price points. Their marketing message for some time and definitely for the holiday season is their network which is the only one with real4G (LTE). For the typical (high-end) smartphone price of $200 with a 2-year contract, they cannot offer a 3G Windows Phone when most Android devices are 4G-enabled. Also of course, 4G data plans do offer additional revenue to Verizon Wireless.
Like it or not, Microsoft is going to have to compete with Android from a sales and marketing strategy perspective, rather than the iPhone. There is no single Windows Phonelike the iPhone or even the Nexus line of Android phones. Windows Phone is a licensed OS and as a result, there are going to be multiple OEMs making similar phones and multiple carriers carrying them. In order to differentiate, and in this case in order to even participate, Microsoft and its partners will be forced to play the speeds-and-feeds game and keep bumping up the phone features. This is somewhat the opposite of how Microsoft has set up Windows Phone with its strict chassis specification and also how they have set their update schedule to be one big update a year interspersed with smaller updates in between.
Instead of having customers focus on the elegance of the OS and its ability to run well even on previous generation hardware, Microsoft is being forced by Verizon Wireless to play the Android game and keep focusing on specification numbers. Something will have to give because Microsoft simply cannot afford to get left out of the Verizon Wireless footprint. Perhaps more chassis specifications? More aggressive updates to the OS? Maybe we will see a more aggressive schedule after the first round of Nokia devices come into the market and the platform gains a reasonable installed base? Any/all of this better happen because Verizon Wireless customers deserve the choice of Windows Phone