The travel company TripAdvisor announced a major partnership deal with Microsoft today. Starting this year, a hefty chunk of Windows 10 PCs will ship with TripAdvisor installed by default across tablets, smartphones, and mobile devices.
Microsoft and TA don’t specify exactly which devices will ship with the app installed, but TripAdvisor’s PR statement reads: “The TripAdvisor app for Windows 10 will be available in 47 markets and will be pre-loaded on millions of Windows 10 compatible devices in 2016.” [emphasis added]
Interestingly enough, that’s not what Microsoft’s own version of the PR says. Both websites state that the TripAdvisor application will be available in 47 markets, but only TripAdvisor’s makes reference to any preloading. Joint PR statements are exhaustively vetted by staff at both companies; there’s very little chance that this key phrase was accidentally omitted or improperly included.
Prior to now, the only third-party app that has shipped with Windows 10 devices is Candy Crush Saga, one of the most popular mobile games in existence. Bringing Candy Crush Saga to Windows devices was smart — not many people buy a device for one game, but people do care if beloved titles aren’t available on a new platform. Including a vacation and planning application is more overt, and can’t be explained in the same fashion.
It’s surprising to see Microsoft taking this step, given its previous stance on bloatware and pre-bundled software. For years, one of the major selling points of the Microsoft Store has been its Signature Edition PCs. These systems ship without any kind of “extra” software installed by the OEM. After Lenovo’s Superfish debacle and some nifty security failures from both Dell and Samsung, a Signature Edition PC was the best way to purchase the hardware you wanted without worrying about the security flaws created by pre-installed third-party products.
Why is Microsoft bundling software?
There are two reasons Microsoft for Microsoft to engage in this kind of bundling. First, the company desperately needs more app developers to sign on and ship Windows 10 apps. Right now, Windows 10 Mobile is stuck in a vicious catch-22: App developers aren’t interested in supporting Windows 10 because its market share is tiny, while users don’t want Windows 10 devices because they can’t use their favorite apps.
Windows 10’s universal binaries give Microsoft its last, best chance to break this cycle. True, the iOS and Android ecosystems dwarf the traditional Windows market, but Microsoft still commands a PC ecosystem of hundreds of millions of machines. It’s shoving users to move to Windows 10 at peak speed — a move that makes far more sense if you consider the platform’s need to attract developers. TripAdvisor might have zero interest in building software for Windows 10 Mobile, but a guaranteed spot on all Windows 10 systems might be enough to pique developer interest. Since the Windows Store continues to struggle with proper curation and app surfacing, bundling the software on the PC may be the only way to ensure people find it.
The other potential explanation for this change is more straightforward. With Windows 10, Microsoft committed to giving the operating system away for free for at least 12 months and dumped the idea that there’s any such thing as a “version” of Windows 10. Every build still has a reference number, but the new Windows model is a perpetually updated, perpetually improving system. Since hardware specs to run the OS haven’t changed since Vista, this means customers will have little reason to buy new hardware when upgrading their operating system.
Microsoft had confirmed it was examining new revenue models before Windows 10 even launched, and this new partnership could be evidence of what those models look like. If so, we should expect to see more partnerships of this sort in the future. I suspect, however, that this is more about boosting mobile market share than generating short-term revenue. Microsoft’s current share of the mobile market is just 2.8%. Without a major initiative to bring apps to Windows 10 Mobile and improve the platform, the entire mobile division will die. Data from IDC shows that as of Q2 2015, Microsoft’s share of the market had fallen to 2.6%.
Other sources show Microsoft as holding 2.8% of the market today, down from 2.9% last summer. Either way, these figures are terrible. Windows Phone devices reportedly have an ASP (average selling price) of $148, a full $71 below the ASP on Android phones.
IDC believes that Microsoft sold roughly 31.5 million Windows Phone devices for all of 2015. The PC market may be in decline, but total PC shipments for 2015 after subtracting Apple’s shipments and accounting for Chromebook market share comes to roughly 258 million units sold. That’s more than 8x the number of smartphones Microsoft shipped. If Microsoft wants to build an ecosystem around Windows 10, it has to start where it has the greatest chance of success.
I’d be thrilled to see the Windows Store stocked with better applications, but Microsoft needs to handle this carefully. The security events of 2015 made it very clear that few vendors perform adequate due diligence on the software they install. If Microsoft is going to renege on its previous “no bloatware” commitment, it needs to double and triple-check any third-party software that it ships. It might be better to include desktop links to the Windows Store to download the software in question rather than bundling it directly, but Microsoft and TripAdvisor have clearly settled on a format they prefer.