Surface Phone Is The Flagship Smartphone Microsoft Needs

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As Microsoft continues to struggle in the smartphone market, speculation that a flagship “Surface Phone” is coming are once again gaining steam. The Surface tablet line has been one of the crown jewels of Microsoft’s recent success, and perhaps Microsoft can build off of that brand momentum to capture more smartphone market share.

There was some expectation that Microsoft might unveil the rumored Surface Phone at its Windows 10 devices event in October. The company did unveil new smartphones, but they were just plain old Lumia devices. Based on the reviews once those smartphones hit the street, they don’t live up to the title of “flagship” and offer little incentive for consumers to choose Windows Phone over an iPhone or various high-end Android devices.

I stated at the time: “Microsoft has achieved tremendous success with the Surface Pro line of tablet PCs—so much so that Apple felt compelled to make its iPad Pro virtually identical in form and accessories to Microsoft’s Surface Pro 3. Leveraging the reputation of the Surface brand to boost visibility for a Windows 10 smartphone makes perfect sense.”

A Forbes contributor wrote about the possibility of a Surface Phone yesterday, and seemed less than optimistic about its potential. The article relies on some faulty logic to suggest that Surface momentum has already stagnated and declined. It points out that Microsoft’s Q4 earnings show a nearly 26 percent decline year-over-year for Surface revenue. The author suggests this is a function of the new iPad Pro, and the fact that there are many other Windows PC options available that cost less. However, the iPad Pro wasn’t actually available during Microsoft’s Q4, and the decline in Surface revenue is more likely a reflection of the fact that the Surface Pro 3 was already more than a year old and prospective Surface customers were holding out for the inevitable new model. I guess the Q1 2016 earnings will be more telling in that regard.

The Surface Pro 3 was a tremendous success and the Surface Pro 4 and Surface Book tablets raise the bar even higher. There have been some issues, but Microsoft has had a hard time keeping the new Surface tablets stocked on the shelves—so it doesn’t seem like the Surface brand is suffering at all.

What does that mean for the smartphone market? Well, reviews of the new Lumia 950 have been tepid at best. The Verge had this to say:

“The Lumia 950 is not an inspired phone–it’s bland, plasticky, and feels tacky. It lacks any defining design characteristics, making it a generic-looking rectangular slab. Worse, it’s virtually indistinguishable from the low-price Lumias Microsoft has been selling for the past couple of years in both feel and appearance.”

We can debate how well Windows 10 stacks up as a mobile OS compared to iOS or Android. Regardless of the operating system, though, consumers want quality hardware. There is a market for less expensive devices as well, but there should be a flagship Windows smartphone—and that flagship device should have impeccable design and quality engineering.

That is where the Surface team and the Surface brand reputation come into play. When it comes to the Surface line, Microsoft borrowed a number of pages from the old Apple playbook. The attention to detail and quality engineering of the Surface tablets would make Steve Jobs proud. If Microsoft can apply those same principles to a smartphone, the Surface Phone could also be a success.

Microsoft will probably never dominate the smartphone market, but it should be able to carve out a reasonable share of the pie. Plus, with Windows 10 and Windows Continuum Microsoft is offering a more comprehensive cross-platform experience. If Microsoft can manage to package that experience in a device that consumers covet rather than dread, it should be able to gain some traction.

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