Editorials

Editorial: Why the HTC-Microsoft partnership suddenly makes sense

In case you haven’t heard, Nokia’s prized flagship is going to be an exclusive to AT&T. I’ve seen a variety of reactions to the news and I’ve even started a poll asking readers what they think of the situation. So far it looks like most people who wanted a Lumia 920 are going to buy one anyway, but there’s a significant chunk of people unwilling to make the switch.

I could speculate for hours as to why Nokia succumbed to an exclusivity deal with AT&T, but a topic I find far more interesting is the implication the move has for every other Windows Phone 8 handset being released this year. In fact, I think HTC is going to benefit the most from this and it could be the reason why Microsoft linked up with them for their ‘Signature’ partnership.

Let’s compare and contrast for a second. As far as we know right now, the Nokia Lumia 920 will be an exclusive to AT&T in the United States. There’s also the Lumia 820, which has been confirmed for AT&T and is widely expected to go to Verizon as well. Meanwhile, the Windows Phone 8X and 8S are going to be on a total of three carriers: AT&T, T-Mobile and Verizon.

AT&T has an estimated 100 million customers, Verizon has 108 million, and T-Mobile has 34 million. Based on those facts, let’s do some quick calculations based on the devices confirmed for their respective carriers:

  • Nokia Lumia 920 and Lumia 820 will be offered to a total of 100 million people.
  • HTC Windows Phone 8X and 8S will be offered to a total of 242 million people.

HTC has the upper-hand with more than twice the potential customers compared to Nokia — and they’d still have an advantage if Verizon got a Lumia of their own

In other words, these are the number of potential customers that will be given the choice to buy these phones. I think it’s obvious to see that for right now, HTC has the upper-hand with more than twice the potential customers compared to Nokia  — and they’d still have an advantage if Verizon got a Lumia of their own.

The last time I spoke about the HTC-Microsoft partnership, I argued that the reason the phones were called Windows Phone 8X and Windows Phone 8S was in large part due to a more aggressive branding push for Windows Phone. I still think that is true today, but now the why is even more clear: they want more eyeballs.

For Nokia, I think they are more concerned about their financial stability in the short term, rather than becoming the most popular kid in school.

For Nokia, I think they are more concerned about their financial stability in the short term, rather than becoming the most popular kid in school. That’s most likely why the AT&T exclusivity deal exists — they got more money from AT&T than what Verizon offered. But for HTC, they don’t have that problem since they already are one of the popular kids. At the end of the day, HTC was able to secure more agreements with more carriers, and I have a hunch Microsoft noticed that progress and decided to bet on it.

Before you begin attacking me in the comments, I understand that there is shaky ground beneath my argument. All of this assumes that Verizon and T-Mobile won’t get a Nokia Windows Phone this year and, while that appears to be the case, nothing is set in stone.

However, Microsoft knows that it absolutely needs to grow its single-digit market share and the best odds of accomplishing that is to get those phones in front as many people as possible. In this case, bigger might actually be better for Windows Phone.

Author Description

Saad Hashmi

Founder of Windows Phone Daily. Currently pursuing a Bachelor's degree in Marketing and Information Systems. While procrastinating on that goal I write, play games a little too often, and watch exorbitant amounts of mediocre half-hour comedies because I lack the patience to watch hour-long dramas that are probably better. Follow me on Twitter: @Saad073