Did you hear? Microsoft offers a smartphone. The OS looks kind of cool, actually. Only, no one knows about it. Or at least, no one is buying it.
To be fair, the Windows Phone 8 OS, the one ostensibly designed to compete with iPhone and Android, is not yet available. Microsoft sent the OS to handset manufacturers in September. Samsung, HTC and Nokia, all leading smartphone makers, should have Windows Phone 8 OS phones available before Christmas. Likely – but not guaranteed, depending on where you live.
The question remains: will anyone care?
I have my doubts.
In the US, a massive and profitable smartphone market, Microsoft has less than a 4% market share. In fact, for all the reports on the death of Blackberry, in the US at least, Blackberry has nearly triple the Windows Phone market share (the figures below include both Windows Phone and the moribund Windows Mobile).
What about the rest of the world? The news may be worse. If DigiTimes is right, Android, which already has the lead market share, shows no signs of slowing down:
Android, which already accounted for more than 60% of the handset market in the first half of 2012, is expected to see the percentage surpass 70% in the second half as several major Android handset vendors such as Samsung Electronics, Huawei and ZTE are all starting to pump up their shipments in the third quarter, while second-tier vendors, regional brand vendors, and white-box players are also aggressively launching new entry-level Android-based handsets in the China market.
Time is not on Microsoft’s side.
Android claims over 500 million device activations. Apple has sold in excess of 400 million iOS devices, most of those iPhones. There are more than 600,000 apps for Android and there have been over 20 billion app downloads from Google Play (formerly Android Market). The situation is similar for Apple. There are over 700,000 apps in the App Store and downloads total over 30 billion. During the company’s 2012 WWDC, Apple stated they had over 400 million accounts with registered credit cards able to buy apps, books, music and movies.
Can even the once-giant Microsoft compete with this?
Customers are lining up for the iPhone 5 and carriers continue to profit from offering the device. Blackberry has an established (if declining) relationship with most carriers and enterprises. Android is bringing in millions of new customers eager to switch from feature phone to smartphone. Most carriers and retail outlets offer numerous Android devices at a variety of price points and form factors. Can Microsoft take shelf space in this already crowded marketplace? It will not be easy, nor inexpensive.
But wait! What of Microsoft’s strengths? They have an install base of about a billion Windows (PC) users. Won’t those users demand or at least feel more comfortable using a Windows Phone? After all, Microsoft’s Windows 8 interface and Windows Phone 8 UI are, not surprisingly, designed to look similarly.
I don’t think this matters – at all.
After decades of effort, Apple has barely made a dent in Windows PC sales. Macs are still a niche and market analysts assume that Windows controls between 90-95% of the PC install base. That hasn’t stopped Apple from having the world’s most popular smartphone. Likewise, Google’s Chromebooks are barely a blip compared to Windows. Yet Android dominates smartphone market share.
Worse for Microsoft, in my view, is that their interface, while unique, maybe even beautiful, is not what people want. The world has effectively standardized on the app. The Android and iOS interfaces are app-centric. The Windows Phone interface relies on bold type and “tiles”. What if, say, in 2002, someone developed a great PC UI that did not use the desktop metaphor. Would anyone use it? Even if you could show them it was beautiful, functional?
There are other Microsoft strengths, of course. Xbox, is a chief one. No doubt some buyers will appreciate the ability to interact with gamer friends while on their Windows phone. But, in fact, there are very few actual game tie-ins. Counter that with the iPhone 5, for example, which includes the new A6 chip. Apple showed off the device and graphics for some games, such as the upcoming Real Racing 3, are stunning. The days of the console being the lead point in gaming may already be over.
What about design?
The Nokia Lumia line is truly beautiful. HTC has shown off its upcoming Windows Phones and they look extremely similar to Nokia. Of course, Apple is known for its design. Samsung makes handsome devices. And, of course, HTC is a leading Android handset maker. Can the Nokia Lumia stand out? Can Microsoft get these phones in front of people? And how fast might both Samsung and HTC abandon the platform if it does not sell? Unlike Nokia, they already sell millions of Android smartphones.
Lastly, what of the ecosystem?
Microsoft’s content and payments ecosystem is not as robust as Android nor as intuitive and frictionless as iPhone’s. Apps., book, music, movies, TV rentals; these are a snap with iPhone, for example. What can Microsoft do to just level this playing field?
I am having a difficult time understanding why anyone would choose a Windows Phone. It’s harder to buy. Has fewer apps. Looks different. It’s not as easy to purchase content. It does not offer more functionality. It does not provide better security. It’s not simpler, nor more intuitive. There are fewer choices. The devices are not less expensive.
If we assume that just half the planet’s four billion feature phone users eventually switch to a smartphone, than the market for Windows Phone going forward is certainly huge. I’m just not convinced that Microsoft has given them or anyone a reason to not choose iPhone or Android.
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