Microsoft's $1 Billion spend

Microsoft will reportedly spend $1 billion to launch Windows Phone later this year. That seems like a lot of money to launch a product but I guess Microsoft is showing that's its (finally) serious about mobile. Despite this large spend, it doesn't seem like analysts are too hopeful about Microsoft's chances in the mobile OS game. A mobile OS report out of Gartner has Microsoft's Windows Phone market share dwindling down to 3.9% by 2014, with Android and Symbian battling it out for the top spot. Interestingly enough they have the iPhone OS market share holding steady and not flat out dominating the industry over the next couple of years.

$1 billion seems like a lot of money to be throwing at a potentially losing product... but I guess Microsoft has to do it if they even want a fighting chance in the market. As Paul Thurrott from WinInfo Daily puts it "How much of your own money would you spend if you had to save your own life?" (Love that quote!)

Forecast: Mobile Communications Device Open OS Sales to End Users by OS (Thousands of Units)

OS	2009	2010	2011	2014
Symbian	80,876.3	107,662.4	141,278.6	264,351.8
Market Share (%)	46.9	40.1	34.2	30.2
Android	6,798.4	47,462.1	91,937.7	259,306.4
Market Share (%)	3.9	17.7	22.2	29.6
Research In Motion	34,346.8	46,922.9	62,198.2	102,579.5
Market Share (%)	19.9	17.5	15.0	11.7
iOS	24,889.8	41,461.8	70,740.0	130,393.0
Market Share (%)	14.4	15.4	17.1	14.9
Windows Phone	15,031.1	12,686.5	21,308.8	34,490.2
Market Share (%)	8.7	4.7	5.2	3.9
Other Operating Systems	10,431.9	12,588.1	26,017.3	84,452.9
Market Share (%)	6.1	4.7	6.3	9.6
Total Market	172,374.3	268,783.7	413,480.5	875,573.8

Source: Gartner (August 2010)

Microsoft in 2010: Make or break year for mobile

2009 was a stumbling block for Microsoft in the mobile phone market. The continued growth of the iPhone and the introduction of Google's Android platform (and upcoming Nexus One device) stole significant market share away from Microsoft's Windows Mobile system. Microsoft so far has failed to respond to these smartphone threats and some industry analysts have gone so far as to call for Microsoft to exit the consumer phone game.

For 2010 it looks like tablet PCs will join smartphones as the next hot mobile battleground. This year's Consumer Electronics Show will showcase a lot of the new products set to be released in this latest category. Apple is scheduled to release an 'iSlate' tablet by the end of the month, and Google is rumored to be working with HTC to create a Google tablet running the Android platform. Microsoft also has its own dual-screen tablet in the works called Courier. There aren't too many specs out yet for the Courier device, so a lot remains unknown. Will Microsoft be able to keep up with Apple and Google in this new tablet market?

On the Zune HD front Microsoft looks like it's pushing to get Xbox Live games on Windows Mobile platforms, which will be a good step towards making WinMo phones relevant again. There's also speculation that Microsoft may announce some big Windows Mobile news soon during upcoming conferences. Maybe we'll see details on a full fledged Windows/Zune Phone? The Windows Mobile 7 OS was delayed until the second half of 2010, so Microsoft really needs something big here if it hopes to shake up the order of the current market leaders.

There's a lot at stake with mobile platforms like the smartphone and tablet as we move towards consuming more and more data on the go. 2010 will be an exciting year for innovative mobile products, and I expect to see great things from Apple, Google, Microsoft and others.

iPhone, Google Phone, Zune Phone?

With the upcoming release of Google’s Nexus One we’re seeing a big shift in the smartphone industry. The new direction in mobile is in integrating the hardware and software behind the device and delivering a ‘complete’ and ‘pure’ experience to consumers. Apple obviously started this out with the wildly successful iPhone and now Google is following suit with the Nexus One. Let’s not forget about Nokia’s Maemo platform and Samsung’s upcoming Bada operating system. But what about Microsoft? Where do Microsoft and its Windows Mobile platform fit in this increasingly competitive arena?

Microsoft has certainly fallen behind the curve in the mobile world. There’s no buzz around its mobile platform right now and sales of Windows Mobile devices have been relatively low compared to its competitors. Some analysts are calling for Microsoft to get out of the phone business entirely. It seems unlikely that Microsoft will exit this area given the importance of mobile computing, but it definitely needs to shift its strategy if it hopes to compete for market share. I think that if Microsoft hopes to remain a player in the mobile world it will need to cross the threshold into smartphone hardware and release its own fully branded Windows phone.

Microsoft is no stranger to stepping into the hardware game. Microsoft successfully entered the video game market in 2001 with the introduction of the Xbox console, challenging Sony and Nintendo for superiority in the home gaming market. Microsoft also entered the portable media player market in 2006 with the Zune player to challenge Apple’s line of iPods. The Zune player itself is a sleek device that rivals the iPod in functionality and ease of use, but it never really caught on with consumers. Although it has not sold well in the market, analysts predict that Microsoft may enhance the Zune device with phone capabilities and enter the smartphone space with it.

Over the past year, there have been murmurs on the internet about the ‘Zune Phone’, but so far nothing concrete has materialized and Microsoft has not confirmed any of these rumors. The release of the Nexus One will certainly increase this chatter. It’s also going to inadvertently shine a bright light on Microsoft and call into question its current mobile strategy. Right now it appears that Microsoft is focusing much of its attention on the next version of its mobile operating system, Windows Mobile 7, scheduled for a 2010 launch. But will this be enough for Microsoft to regain its lost market share? Probably not.

If Microsoft hopes to once again become a leader in mobile computing it will need to follow the lead of its rivals. Windows Mobile 7 will not be enough. Microsoft needs to move beyond software and integrate into hardware for smartphones. I think we will see a Zune Phone released by the end of 2010. If Microsoft waits much longer than that it could find itself completely out of the mobile revolution.

The Google Phone is coming

Big Google news this weekend: the Google Phone is coming! This highly anticipated move takes Google's Android mobile phone platform to the next level and could be a big game changer in the mobile landscape.

Last month I talked about Google's current problems with Android; brand appeal, simplicity and applications. All of these issues stemmed from Google's decentralized approach to the mobile market. Google gave away the Android OS to any manufacturer who wanted to use it and as a result the market was flooded with many different Android devices that each worked a bit differently than the rest. The fragmentation of the Android market was causing headaches for both consumers and app developers alike.

The solution itself seemed simple enough, although it would be hard to implement. Google would have to regain control of its mobile platform and standardize the consumer experience on Android. Google would have to somehow rein in all of the Android devices running in the wild and establish a unified platform for consumers.

The Google Phone looks like it will do all that. By rolling out its own phone, Google will be able to control every aspect of the device, from hardware to software, and deliver a complete 'Google' experience. The issue of brand appeal and simplicity go away. If a consumer wants an Android phone, the choice is clear; get the latest Google Phone. The issue of application compatibility goes away too. Google will control the OS on its phone and can push out updates and patches as it deems fit.

But what about Droid and the other Android devices out in the wild? Will Google continue to support these devices? They'll probably still be supported but we're likely to see the number of non-Google Android devices go down. The Google Phone may not be immediately available on all carriers, so there may still be a couple new Android devices released on different networks. Expect to see Google exert a tighter control on these devices as it looks to enforce the Android standard.

Now that Google is moving away from a 'Windows Mobile' strategy and moving closer towards an 'iPhone' strategy, how will Microsoft and Apple react?

Will Microsoft enter the phone manufacturer market? There have been murmurs of a Zune Phone but nothing concrete yet. Windows Mobile is falling further and further behind the curve; what can Microsoft do at this point to regain market share?

What will be the impact next year when the AT&T and iPhone exclusivity deal ends? Verizon is rumored to be the next major American carrier to roll out the iPhone. Can T-Mobile be too far behind? You can already unlock an iPhone and run it on T-Mobile's GSM network. Can Apple nip the Google Phone in the bud by making the iPhone more widely available to consumers?

Finally, don't forget about the impact of apps. As of November, the App Store has 100,000 apps available to the Android Market's 15,000. The Windows Marketplace has 376. Unless the Google Phone completely blows away the iPhone in terms of hardware superiority, the battle will still come down to apps. Google has a long way to go before it can match Apple for app numbers. The Google Phone will cause a spike in the number of apps on the Android Market, but will it be enough to pass up the App Store?

Windows Mobile Killer

The Droid chatter continues on the web, and Verizon has announced that it's releasing it next week on November 6th. It will be interesting to see how the Droid actually performs in the market and how much user share it can steal away from the other mobile platforms.

Of course the Droid has been called the "iPhone Killer", but then again so has every other new phone that has come out recently. One thing I mentioned in an earlier post is how much different Google's strategy is to Apple's when it comes to their mobile platforms. While Apple has only released the iPhone on its handsets and on the AT&T network, Google has gone with a wider spread approach and essentially released Android into the wild. So maybe it's incorrect to compare the Android (Droid) to the iPhone, when we really should be comparing it to something else.

This Tech Crunch article ("The problem with iPhone Killers") does a great job of highlighting this point. The Droid isn't actually an iPhone Killer because first and foremost... it's not trying to be an iPhone Killer! Although it's competing in the same marketplace with the iPhone, in actuality Google's strategy and approach seems to be more targeted at being a "Windows Mobile Killer". Google is following the same mobile operation model as Microsoft; releasing its mobile operating system to the device makers and letting them control the physical hardware and distribution process. But the big difference for Google is that its OS is open source and free, while Microsoft charges licensing fees upwards of $25 per phone. The problem for Microsoft right now is that the Android platform is starting to gain real traction with the public and with the device makers. We're seeing more and more phones released with the Android platform, stealing away market share from Windows Mobile. Microsoft is responding with its upcoming Windows Mobile 7 platform, but for now it looks like it could be facing a lengthy uphill battle against Google.

So while most people will be eagerly anticipating the release of the latest iPhone Killer next week, I think I'll be keeping a closer eye on the real battle going on in the mobile world. At some future point, Android might be a true iPhone killer, but for now Google appears to be focusing on building up its mobile base by going after much weaker prey: Microsoft.

The Droid is coming

There's a lot of buzz going around right now about the new Droid phone. It's a Motorola smartphone running the Google Android platform on Verizon's network. The technical specs on the phone sound impressive, and the marketing campaign launching right now is positioning it as the iPhone killer everyone has been waiting for.

A couple posts ago I talked about Windows Mobile phones vs. the iPhone. I mentioned that even though the Windows HTC phone I was looking at might have better technical specs, it didn't have the same complementary 'network' (Apps Store, user base) that the iPhone has and as such was at a disadvantage. I didn't mention the Google Android platform at the time, but it is certainly emerging as a contender in the mobile operating system market.

The App Store has 85,000 applications available, and coming in (a somewhat distant) distant second is the Android Market at 10,200. These numbers are based on statistics pulled on Sept. 9th, 2009.

So how did Google get the Android platform to a place where it's ready to take on the current reigning champion? This CNET article ("Google Andoid: More than just a cheap date") seems to attribute most of Android's success to its open source nature. Google pretty much gives away the Android platform to any device manufacturer that might be interested in using it. This allows for anyone to experiment with the platform on their upcoming phones and helps lower the overall cost of manufacturing and licensing. The platform also draws in a heavy crowd of application developers looking for the flexibility of open source. Seems like a win-win in terms of adoption for Google. For now the focus appears to be on gaining widespread adoption and usage, and using that as a channel to deliver search and advertising services. Classic Google.

The new Droid phone appears to have the two key features needed to take on the iPhone. It has equal (if not better) technical specs. More importantly, it has a complementary network that is growing and will soon challenge the App Store in offerings. As the Android platform is released on more and more new phones we should see the Android user base steadily grow. We'll see if this is enough to take on the incumbent Apple.

New Smartphone

I’m in the market for a new phone right now. My current phone is a couple years old, and it’s constantly getting made fun of when I pull it out. It’s a T-Mobile MDA phone, which uses the HTC Wizard base model. I’m actually not quite sure if it’s a Wizard or a Hermes model, but that’s beside the point. The point is my phone is very old.

A month ago, I had it in my head that I was going to buy the latest HTC Windows phone, the HTC Touch Pro 2. It’s a pretty slick phone, it has all the latest touch screen features and is 3G enabled and has a slide out keyboard. It has been toted as the iPhone killer, but then again, so has almost every new smartphone that has come out recently. On my Facebook profile I posted a link to the phone and said “My next phone, aka the iPhone killer!” Well, that prompted a couple of people to comment on my post, most of them disagreeing with my statement and saying the iPhone was better. My brother actually made the best point of the bunch when he pointed out the biggest reason why the iPhone was better than the HTC phone had nothing to do with the phone technology itself, but with Apple’s App Store. Both phones are on par with each other, technology wise, but only the iPhone has the big content base at the App Store which gives the phone so much more added value.

Most consumers don’t care about the exact specs of each phone; which phone has the most memory or the slightly better camera. What they care about is all the “cool stuff” you can do with the phone. Right now Apple has a huge advantage over all other phones and applications stores because you can do more “cool stuff” with their phone than you can with other phones. That doesn’t mean their phone is better. It means that Apple got into the market early, built up a massive installed user base, and is now leveraging that user base to build out its complementary App Store service. Microsoft or Blackberry can roll out phones with better specs and functionality than the iPhone, but until they build out their user base and offer equally as cool applications on their own stores they won’t stand much of a chance against Apple. Which is a bit of a catch-22… how do you get more people to use and develop apps for your phone if the only way they’ll do that is if there is a bigger user and developer base for it?

In the ideal world (for consumers), we’d see a uniform platform used for all these phones and all the cool and innovative applications would work on any smartphone. That’s probably not going to happen anytime soon, but it would probably spawn a lot of growth in the mobile apps market. As it is right now, Apple has the dominant standard in the industry, but I can see Microsoft investing a lot of time and money trying to get their Windows standard spread out across the mobile landscape. It will be interesting to see the tactics they’ll use to achieve this…

Ok, back to my next phone purchase. I’m not sure what I’m going to do now. The HTC phone is nice, and would work well with my current carrier (T-Mobile), but it’s still priced really high even with a 2-year contract. I’m not sure if I’m ready to switch over my family plan to AT&T, so that limits some of my options. One thing I am considering is buying a separate phone line just for the iPhone, so I can play around with it over the next couple of months. I’m also *maybe* thinking about buying an iPhone unlocked and using it on the T-Mobile network. I’ve heard you can do this and pretty much everything works properly. I may go down this route just to go down the route… it sounds pretty cool and hackerish! :)