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Microsoft to sell Galaxy S8 phones pre-loaded with its own apps

Microsoft to sell Galaxy S8 phones pre-loaded with its own apps

Low-key deal to sell Samsung's new flagship driven by desire to remain a player in enterprise mobile, says analyst

Microsoft will sell Samsung's newest Android-powered phones, the Galaxy S8 and S8+, in its brick-and-mortar stores next month.

The phones can be pre-ordered now at Microsoft's retail outlets -- but not online -- and will also be available for purchase in the stores beginning April 21, Samsung's release date for the new, larger models.

Microsoft's prices will be the same as Samsung's: $750 for the Galaxy S8, $850 for the S8+.

But the Galaxy S8 and S8+ phones sold by Microsoft will not be identical to those offered elsewhere. "A Microsoft customization is applied when the devices are unboxed and connected to Wi-Fi," a Microsoft spokeswoman said in an emailed statement.

"This customization ensures customers a best-in-class productivity experience with Microsoft applications such as Office, OneDrive, Cortana, Outlook and more."

Microsoft has worked hard to craft Android versions of its productivity apps since it spun its mobile strategy away from building and selling Windows-powered smartphones.

The company couched the Galaxy sales as part of that theme. "The new device customization is an example of bringing together Microsoft applications on more devices so customers can work, play and connect from their pockets," the spokeswoman added.

"I think it's a pretty smart move," said Jack Gold, principal analyst at J. Gold Associates. "Samsung is probably the No. 1 enterprise supplier of Android smartphones today. And they're configuring the phone to make sure their products are on it."

Gold's point? "This is a preemptive strike against Google," he said.

Microsoft has always been most interested in its commercial customers, those who contribute the majority of the company's revenues. Gold emphasized that those thoughts remained uppermost at Redmond.

"Microsoft has two plays in the enterprise, the traditional, where Exchange is the back-end, and then the cloud," he said, talking of mobile.

"Microsoft's asking, 'Can I keep them from saying "I can switch to Google,"' when they go to the cloud? So, this is a stake in the ground, Microsoft saying, 'Try our stuff, you'll like it.'"

Although Gold expects Microsoft to try to sell company app-equipped phones to enterprises in other ways, perhaps by making deals with carriers, which are the usual sellers of smartphones to corporate customers buying in bulk, he is also upbeat about Microsoft's immediate plans.

"In big companies, remember, 30% to 40% of smartphones are BYOD," Gold said of the "bring your own device" model where businesses support employee-owned phones, tablets and notebooks in the office.

Microsoft's Samsung deal has been low profile; rather than issue a press release or even publish a post on one of its countless blogs, the company issued a statement. Likewise, the Galaxy S8 and S8+ will be sold, at least initially, through Microsoft's limited number of retail stores only.

Gold thought he had an answer for why Microsoft chose that sales approach.

"From Microsoft's point of view, they don't want to make it too public because that just encourages people to say, 'See, Microsoft can't sell their own phones, so they're selling Android,'" Gold said. "It's a balancing act for them."


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