Huge Slump in Smartphone Market Share - Can Microsoft Reinvent Itself?

When you take a close look at the smartphone market, you will notice something strange. Experts often talk about what is possibly the most popular smartphone available today – the Apple iPhone. They talk about how Google Android could give Apple a tough competition. They talk about Symbian and they talk about Blackberry. They even talk about recently released smartphones like Motorola Cliq and Droid. One name that is conspicuously missing from this list is Microsoft’s Windows Mobile.

It is really surprising. After all, Microsoft entered the smartphone market long back – Pocket PC 2002, the predecessor of Windows Mobile OS, was released in 2002. Soon, Windows Mobile was released in 2003. What has Microsoft managed to achieve in the past six years? The answer is – nothing worthwhile.

Windows Mobile, as of now, is the fourth most used mobile operating system in the world. Nokia with its Symbian OS is the market leader – followed by Blackberry and the iPhone. Experts, however, predict that it might not be able to stay at that spot for long. When you take a good look at the numbers, you get the feeling that what they predict might actually come true.

In the first quarter of 2004, Microsoft’s Windows Mobile had an envious 23% share in the smartphone market. In the first quarter of 2005, there was a steady decline and its market share was somewhere around 18%. In the first quarter of 2006, it further slumped and remained with a market share of 12%. In 2008, its market share dropped to 14%. At the start of 2009, it slumped further and remained at 7.9%. If we go by the recent report from AdMob, Microsoft’s market share, as of now, is only somewhere around 4%.

It is quite a slide – from 23% market share to 4% market share in a span of just five years. In the mean time, Apple, Nokia, RIM, and even Google have made their presence felt in the market big time.

It is really hard to believe. After all, Microsoft has got everything - all the money in the world, some of the brightest minds in the world, and plenty of goodwill. Yet, it has not been able to conquer the mobile market like it conquered the PC market. While late entrants like Apple and Google have been able to generate a big buzz, Microsoft has not been able to do anything that is worth taking notice.

Apple iPhone continues to climb the ladder and even new entrants like Motorola Droid have managed to create a big buzz. With this being the case, Microsoft’s only bet is Windows Mobile 7 OS – which incorporates the elements of Windows Mobile 6.5 and Zune – which is slated for release in 2010.

The mobile phone industry, the smartphone market in particular, is expected to grow bigger by the day. Mobile advertising, as we all know, is set to grow big as well. The time is ripe and the competition is intense. The question is – can Microsoft pull it off?

Categories: All things mobile phones, Microsoft.

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Steve Ballmer takes a dig at Google Android

You’ve got to give it to Steve Ballmer. He has the knack to say something which makes the whole world sit up and take notice. Speaking at the Telstra annual investor briefing in Sydney yesterday, Ballmer said that Google is not a major mobile competitor for Microsoft at all.

Ballmer said that Google is not very high on the list of Microsoft’s mobile competitors and it will not pose a threat to Microsoft’s dominance in the mobile market anywhere in the near future. Speaking of Google’s mobile division, he had these exact words to say – “They’ve got some smart guys and hire a lot of people — blah-di-blah-di-blah.”

Ballmer said that since Google has made Android free for everyone, they will not invest a lot to improve the product. He also stated that he couldn’t see how Google plans to make money from Android, since the product has no viable revenue model at all.

While I cannot disagree with most of the things he has said about Google, I have to disagree with one thing – the revenue model. Let me explain why.

Google never planned to make money from Android by charging people to use it. It was, is, and always will remain a free mobile platform. What Google thought of was a stronghold in the mobile OS market through Android, which I don’t think will be unachievable if Google continues to improve its product. Though it will not be possible in the near future thanks to the immense competition from Symbian, Blackberry, and Apple, you cannot rule out that possibility.

Most importantly, Google is not a mobile OS manufacturer. Its strength is advertising and by pushing more and more people around the world to use Android, Google can easily show a lot more ads and generate a lot of revenue – a fact that Ballmer seems to have forgotten.

As someone who has always wanted to ‘bury’ Google, Ballmer has made his intentions clear. Though he clearly said “I’m not giving them a hard time”, it is exactly what he has tried to do. It will be interesting to see Google’s response, if at all Larry and Sergey bother to respond. What do you think?

Categories: Google, Microsoft.

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