From the interview:
MJF: I realize this year was a year when Microsoft planned not to release any new Windows Phones itself. But the question I keep getting is why is Microsoft wasting time updating Windows Mobile when the market share is one percent? You don't have that many phone OEMs. Why not just say, you know, maybe we'll come back some day, but for now, let's just stop playing around with mobile.
MYERSON: Technically, there are really two things that are unique about Windows Mobile. One is cellular connectivity and the other one is the ARM processors that are there. And I think both cellular connectivity and ARM processors have a role in the technical landscape of the future.
So we're going to continue to invest in ARM and cellular. And while I'm not saying what type of device, I think we'll see devices there, Windows devices, that use ARM chips. I think we'll see devices that have cellular connectivity.
When you stop investing in these things, it's super hard, super, super hard to restart. And at Microsoft we have a few of those examples where we stopped. Sometimes, when you're investing into growth. it's easier, but when you're investing for technical strategy or things like that, sometimes people can question it -- like you're doing right now. But especially among your readers, I don't think there's much debate that ARM processors have a role in the future. And cellular connectivity does as well.
There are a few things to address here. Firstly, Microsoft isn't 'wasting' much time in keeping Windows 10 Mobile updated in lockstep with the laptop/tablet builds. After all the core applications are identical, and much of the middleware and kernel are the same too. There's far more that is the same than is different and I estimate that building images for 'mobile' is only adding 10% or 20% to the overal manpower needed.
Secondly, looking at 'market share', i.e. new sales, is a little misleading, given that Microsoft hasn't made any new phones this year and has almost zero marketing push behind existing handsets. Plus, looking at new sales only (e.g. per quarter) ignores the installed base of users and enthusiasts who bought Windows 10 Mobile and upgradeable Windows Phone 8.1 smartphones over the last three years, there are still tens of millions of people worldwide (potentially) who can be enjoying - and, yes, helping Microsoft test - Windows 10 Mobile and its latest builds.
Turning to Terry's comments, he realises that if Microsoft cans the Windows 10 Mobile builds, i.e. stops updating them, it's going to be - in his own words - super hard to restart at some point in the future when Microsoft wants to make a smartphone or phablet again. By far the best strategy is to keep going, perfect the OS (and I showed yesterday how much faster Redstone 2 is than RS1) and then introduce a ground-breaking device when the time is right.
Reading the tea-leaves(!), everything is still pointing to a Surface-branded super-phablet (6.5" screen), with optional QWERTY folio case/stand, optional inductive stylus, and all the 3D and 'Creative' software announced the other day. All timed to launch with Redstone 2 next March. Well, that's my guess, anyway. Like the HP Elite X3, it'll be premium-priced, aimed at professionals, and a million miles from the iPhones and Pixels of this world.
To quote something else of Terry's from April:
I understand that you are hearing concerns from certain partners about Microsoft's commitment to the mobile space. Let me be very clear: We are committed to deliver Windows 10 on mobile devices with small screen running ARM processors.
We are currently in development of our next generation products and I wanted to reconfirm our commitment to Windows 10 Mobile. We believe in this product's value to business customers and it is our intention to support the Windows 10 Mobile platform for many years. We have a device roadmap to support that from Microsoft as well as our OEM partners who will also be selling an expanded lineup of phone devices based on this platform.
There's actually an up-side to low sales share (OK, I'm clutching at straws a little here!) in that Microsoft can push and pull both production and Insiders builds all over the place, improving and testing and experimenting without causing world chaos, since mainly patient enthusiasts would be affected. Whereas if Apple (e.g.) changed something major in iOS and it broke horribly then the sky would probably be seen as falling down...!