BLOG STARTUPS, VENTURE AND THE TECH BUSINESS

March 30 2012
by Todd Hixon

Windows Phone Beats iPhone by 2015? Not Likely!

Windows Phone jumping to No. 2 in smartphone market by 2015? | ZDNet.

As a blogger, I appreciate the need to say something that gets attention. But this prediction is a big stretch. It overlooks the huge importance of apps, media content, and consumer cloud services in the smart phones market: areas where Nokia and Microsoft are far behind. Reported by ZDNet in the link above, the forecast comes from IHS iSuppli, a respected analyst of the electronics market (link).

Photo via nokialumia900review.com

You can get to IHS’ conclusion if you take a device-centric view of the market. Nokia has deep device skills, sees smartphones success as a strategic imperative, and has made a big commitment to the Windows Mobile platform. Microsoft is a software juggernaut with some key market franchises. Together they have a new strategy that makes sense: they are designing for the U.S. as the lead market and cutting deals with U.S. carriers. The flagship product, the Lumia 900, has competitive hardware specs (e.g., 4.3″ AMOLED screen, 8 Mpixel camera, LTE) and some “hot” features that received favorable notice at CES. This is all good, and to me it says that the next gen efforts of Nokia smartphones will fare better than those in the past.

But all of the above is just table stakes to get into the game with Apple, Google, Samsung, and other Google hardware partners. The mobile device business is no longer about the device alone; it’s about content and the way the device works with a suite of network and cloud based services. First, there are the apps. Apple and Google each have over 1/2 million apps available for their platform. Windows Mobile has about 70k, and a mobile version of MS Office, while attractive, does not fill the gap. Apps have been the thrust of Apple’s iPhone marketing from the start: “There’s an app for that …”. App weakness is part of why BlackBerry shriveled. Absence of a competitive app portfolio is sufficient reason for NokiSoft to lag behind Apple.

Moreover, the Apple/Google competition has largely moved on from apps to cloud services. With iOS 5.x Apple offers synchronization between your iPhone or iPad, your Mac or Windows PC, and a cloud archive of personal data, photos, and media (music, TV shows, and now movies). It offers a vast array of music, TV, and movies via the iTunes store. It has well-developed apps for managing your content and photo libraries on the desktop. And it offers a complete Exchange-like mail/calendar/contacts sync. Google is charging down the same path: it offers music sync, photo sync, Exchange-like sync, cloud storage, remote device back-up and updates. Google has special strength in key mobile apps: its impressive Maps/Nav app for Android and Gmail. Google has long pushed the envelope on voice search on mobile devices, and Apple has made a strong move here with Siri.

Finally, Apple and Google are working hard and keeping each other honest; they will keep raising the bar. Many think that Facebook may launch a mobile device business, and Amazon has already, with the Kindle. Then then there is brand strength: the Apple brand is surely one of the top five global consumer brands today. The Google brand is not half bad …

Where is Microsoft on cloud services? I’m sure they will do a good Exchange-based mail/contacts/calendar service. The rest of their products in this set are sometimes impressive, but not at the level of Apple and Google. And Microsoft needs to develop the media company deals and relationships that underpin compelling content offering.

Nokia and Microsoft are great companies and I have friends there; I wish them well. The competitive intensity and stakes in the mobile device and software business are as high as any situation I can recall, however, and Apple and Microsoft are the two best digital companies in the world. So it will be a long battle, and interesting to watch.

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