Microsoft is accustomed to the slower rate of change of the PC market. Wait a few years between major OS upgrades? With PCs, it made sense. With handsets, consumers expect major a major OS upgrade or two during the short life cycle of the device, and many gadget hounds don't even wait for the carrier contracts to expire before they get a new mobile phone.
Even those who wait tend to replace phones around the time they sign a new contract, cashing in on handset subsidies. According to Recon Analytics, the average replacement cycle in the U.S. is just less than 22 months.
Not all of those users simply replace the handset with another from the same vendor, nor do they always stay loyal to carriers. According to MetaFacts, the churn rate for smartphone users is higher than it was for feature phones, with twenty-one percent of consumers planning to shop around when their contracts are up.
Of course, this means that Microsoft has more opportunities to entice users to change platforms. Compelling device subsidies, product tie-ins with, say, Xbox or Kinect, or even being the first vendor to add some new feature that no one is thinking about today could shift things in Windows Phone's favor quickly.
But once users switch over to Windows Phone, will Microsoft be able to keep them? Other platforms, including the PC and even game consoles, require enough upfront investment that people stick with them for a reasonable amount of time. Will Microsoft adapt to how consumers make choices and develop loyalty, especially when a critical partner – the carriers – tends to rank low on customer-satisfaction surveys?