Belfiore wasn’t shy about criticizing Google’s Android OS. Even though Google currently dominates the mobile OS market, its strategy of licensing the Android OS to manufacturers is similar to Microsoft’s previous approach with Windows Mobile: It’s open-ended, and there are few restrictions on how manufacturers can use or modify the OS.
As a result, Android is suffering from some of the same issues as Windows Mobile did: Android works better on some phones than others, manufacturers are shipping different versions of the OS on different phones, some Android phones are shipping with bloatware made by carriers, and some app developers complain that it’s difficult to make software because of the hardware and OS fragmentation.
Android was initially an attempt to commoditize Windows Mobile with a symmetric but "free" alternative. The idea was to conform to OEMs and operator business models. This was directly copied from Microsoft's early 2000's playbook for entry into mobile.
Trouble is that Microsoft realized their purely modular, operator and OEM centric approach was failing to be competitive on the user experience and decided to move into a more integrated approach, closer to Apple's integrated model.
But while Microsoft dropped their vision, Android was still patterned after their approach.
only a handful of companies may get into WP7 when it arrives, they added. HTC may end up controlling 70 to 80 percent of the market simply by being one of the initial partners
Windows Phone had its day in the sun yesterday. After discarding its previous seven-year effort with Windows Mobile, Microsoft started with a clean sheet of paper. However, whereas the software has been re-built, the business model has not. WP is still a licensed operating system whose primary customers are mobile phone vendors. With Symbian mostly out of the picture, WP becomes only the second viable commercially licensed mobile OS, after Android.
So with two licensed platforms in the running, how do we measure success in the licensing business? Units sold to end users is one metric. But that data will have to include the performance of vendors and operators and other distributors. And it will take a year to do valid comparisons. The only indicative metric we have available today is how many devices have been committed by vendors.
As WP is out of the gate with device announcements, we can actually measure this. We can plot each vendor's commitment to various platforms as an early indicator of strategic success. To that end, here's the methodology: I took all smartphone vendors and tallied how many SKUs they have announced or leaked for either the WP or Android platforms (source: pdadb.net). I then plotted each vendor on two "commitment axes" (see notes below).
The more to the right a vendor lies, the more committed they are to Microsoft's platform. The more to the top a vendor lies in the chart, the more committed they are to Google's platform. The vendors which don't have any licensed products lie below the origin.
What we can observe is that Microsoft has pulled several, though not all vendors partially to its side. The level of commitment is not yet very high and it has not likely reduced their commitment to Android. In other words, points are moving to the right but not (yet) down.
Framing the platforms this way helps us discuss how the market might evolve with these questions:
Is Microsoft's re-entry going to peel vendors away from Android. In other words, will points move down as well as to the right.
Is there motivation for some vendors to move to their own platforms like the non-committed? We've shown that profits accrue disproportionately to the vendors below the origin. As a result, is the pool of available top tier vendors going to shrink?
Will vendors commit to single platforms or maintain this split OS loyalty strategy? Will we see LG migrate to WP exclusive and will Others remain exclusive in Android?
I'll throw out my predictions to start:
Microsoft's strategy is aimed at top tier vendors more than to the "others". This is due to a lesson they learned with Windows Mobile: having a ton of SKUs does not guarantee a healthy ecosystem (a lesson that Android has not acknowledged as true). There are positive and negative consequences. The positive is that Microsoft control the experience better, create a better brand and can participate in an effective dialogue with operators. The negative is that they are going to deal with a diminished licensee pool.
On the second question my prediction is that vendors are going to move "down and to the left" away from the licensing model. If they can't go direct to that quadrant, vendors will consolidate portfolios around one licensed platform. The distribution of commitment I forecast will look like this:
Maintaining multiple platform development teams is expensive. Branding is also confused. The upside is that you get to play the operator's divide-and-conquer game of platform dilution (aimed at the non-licensing players in the lower left corner).
In particular, Samsung, with Bada, is likely to find ways out of license-land. Sony Ericsson may stick with Android and LG may move to Windows exclusively. That really leaves only HTC and Dell as licensees with multiple licenses.
This axial alignment is not a healthy thing if you are a platform vendor. Having one or two dedicated customers means the power of the buyer is much higher and their wishes become your command.
Which leaves only one true prize in the game: the "others". Android is clearly the darling of "Others" who are being shunned by Microsoft. Can "Others" become the lever for Google to pry open the market? History and the tangled web that is operator distribution does not point in that direction.
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Notes:
I considered products announced only since Jan 1, 2010
I did not consider any Windows Mobile legacy commitments
"Other" vendors are off the scale with over 100 SKUs but represented as having 40 SKUs so as to be kept on chart
The chances are extremely small. There are three scenarios where this would make sense:
If there was a specific market that required it. It would also need to be a large opportunity since developing a new platform and diluting existing platforms need significant upside. The only such market is the US, but there are better options available, namely Android that have better potential and Android is treated as a toxin by Nokia (see metaphor).
Specific users. Windows Mobile used to be justified for business users, but Windows Phone is not targeting business users.
The last option would be "strategic" i.e. Microsoft paying Nokia for using the OS (directly or indirectly through marketing co-spend or other symbolisms). I don't think Nokia is desperate enough yet.
Although it's never prudent to say never, I just don't see any logic for Nokia to add to its bill of materials for phones while facing price pressure.
With Verizon shaping Android into its image, you can read AT&T's embrace of Microsoft as the deeply-held belief by operators that they need multi-platform balance in their portfolio.
The idea that operators will tolerate "dominance" of a platform is looking less and less tenable.
A few eyebrows were raised when Microsoft presented a slide at a French event where they made the claim that 30 Million Windows Phone devices would be sold by the end of 2011. Given that the first Windows Phone won't ship until October 2010 at the earliest, or, according to Mr. Ballmer, "by Christmas," count me among the skeptics.
However, the claim was later retracted by Microsoft stating that they mis-quoted IDC, the original source for the forecast. The correction was perhaps meant to put an end to the credibility crisis.
However, the actual forecast from IDC was even more preposterous. Apparently IDC makes the forecast that 32 million "Windows Mobile" devices will sell during all of 2011--a combination of both Windows Mobile and Windows Phone devices.
Instead, the research company forecast 2011 sales of 32 million devices running all Windows Mobile operating systems. This includes expected sales of devices with Windows Mobile 6.5, which is already on the market. IDC has not given any sales estimate for Windows Phone 7, which Microsoft has said will be available in the fourth quarter.
Their report showed about 16 million Windows Mobile devices shipped in 2009, with a forecast of 22 million this year and 32 million next year.
Windows Mobile shipped a total of 3.7 million phones in 1Q10, so in order to reach 22 million this year they need to ship 18.3 million for the rest of the year or, on average, 6.1 million phones a quarter. That's a higher number than what Android shipped in Q1 with BOGO promotions (5.2m units). That's almost as high as the launch quarter for the iPhone 3G. And all this (mostly) with WinMo 6.5!
Alternatively perhaps IDC foresees a huge launch for Windows Phone. Assuming an erosion of the WM6.5 to 2.7 m this quarter, 2 million in Q3 and 2 million in Q4, then Windows Phone would somehow need to ship 12 million units during the last quarter. This number is higher than what iPhone sold in its highest ever quarter.
This sounds sillier than 30 million Windows Phones in 2011. By claiming that Microsoft's combination of deprecated Windows Mobile (6.5) and unreleased Windows Phone 7 will continue to sell at a growth of 38% this year, they are actually suggesting an acceleration in sales going into the second half at a rate higher than what the market is likely to grow at.
In other words, they are suggesting that Microsoft will gain share during the rest of this year. Share gains for a platform that has declined in share in Q1 from 10.2% to 6.8% with 3.7 million units sold on the back of further share losses the quarter prior. Share gains against Android that competes with a free license. Share gains with a new platform that has no clear differentiation vs. the iPhone.
No Multi-tasking -- However, there are going to be notifications.
No App Sideloading
No App store other than the Microsoft App Store
No Cut/Copy/Paste
No Expandable Storage
No Exposed File System
No Shell Customization / Skinning
No native applications (managed code only)
Funny how when iPhone came out and Ballmer laughed his head off, these were the "power" features that most pointed to in WinMo that made the iPhone a "toy".
Maybe if people want an iPhone copy, they will get an iPhone.
UPDATE: (via Gruber)
Catching up is hard. And based on what I’m hearing about iPhone OS 4.0, it seems likely that Windows Phone 7 is going to fall further behind before it even gets a chance to ship.
The mobile operating system formerly known as “Pocket PC 2000/2002, Pocket PC 2000/2002 Phone Edition, Smartphone 2002, Windows Mobile (2003/5.0) for Pocket PC, Windows Mobile (2003/SE/5.0) for Pocket PC Phone Edition, Windows Mobile (2003/SE/5.0) for Smartphone, Windows Mobile 6[.1/.5] Professional/Classic/Standard” will now be known as Windows Phone Classic.
The last “Classic” nomenclature lasted from Windows Mobile 6 Classic to Windows Mobile 6.1 Classic and denoted the OS for Microsoft’s PDAs. It disappeared after version 6.5.
Windows Phone Classic will co-exist with Windows Phone 7 Series.
