iOS vs. WinPho: 2 Visions of the Future

 

By Chris Maxcer
MacNewsWorld
Part of the ECT News Network

Could iOS really be edged out in smartphone market share by latecomer Windows Phone? And could it happen as soon as 2015? Researchers at IDC seem to think so. They've forecast that WinPho will be second only to Android in worldwide market share in four years. Here are five reasons that might not be such an insane prediction ... and five ways Apple could prove IDC completely wrong.

If two large companies create a marriage out of desperation and throw in US$1 billion dowry, can it not only survive but also thrive? According to a recent IDC forecast report, the answer is yes: The Microsoft (Nasdaq: MSFT) and Nokia (NYSE: NOK) sweetheart deal in which Nokia will build smartphones running Microsoft's Windows Phone 7 will result in a second-place market share position by 2015, eclipsing Apple's (Nasdaq: AAPL) iOS.

Android, which is the projected smartphone OS market share leader in 2011, will continue its rampage and own 45.4 percent of the market share in 2015 -- according to IDC, of course.
IDC reports that the 2011 smartphone market share will be 39.5 percent for Android, 20.9 percent for Symbian, 15.7 percent for iOS, 14.9 percent for BlackBerry, and 5.5 percent for Windows Phone 7/Windows Mobile.
But by 2015, the percentages shift to 45.4 for Android, 20.9 for Windows Phone 7, 15.3 for iOS, 13.7 for BlackBerry, and Symbian will be essentially dead with less than 1 percent market share.

 

Talk About Stirring the Fanboy Pot!

The publicly reported portions of the IDC forecast isn't particularly detailed. While my gut reaction was to laugh it off as utter nonsense, I've come to realize that IDC's view here represents at a least a possible future. Here's why:

1. Windows Phone 7 might not be half bad. While it's hard to find real sales figures and uptake for the Microsoft mobile OS, I've seen a number of reviews that grudgingly acknowledge that it's pretty good. Some Microsoft-focused professionals, of course, are already happy to become "fanboy" influencers. For iPhone users, there's nothing compelling enough to generate a switch, but enticing iOS (or even Android users) isn't necessary for Windows Phone 7 to make big share gains.
2. Microsoft understands how important a mobile OS is. After a slumber, it finally seems as if Microsoft understands that it needs a viable (and popular) mobile phone OS. The $1 billion-plus deal with Nokia nails down a quality manufacturer that Microsoft can count on, and there's some evidence that Microsoft is willing to spend real marketing dollars to push its OS. On Monday night's episode of "Castle" on ABC, for instance, not only did Microsoft sponsor a pretty good ad, but it also had yet another product placement.
3. Lots of growth available. IDC predicts that smartphone vendors will ship 450 million units in 2011 compared to 303 million in 2010. That means there are lots of new customers out there. In the burgeoning smartphone market, Microsoft will be like a game show contestant entering a wind tunnel full of cash. Opportunity is out there, moving, but entirely catchable.
4. Nokia may be a very powerful wildcard. Never mind that Nokia was recently failing to capture even a sliver of U.S. smartphone mindshare -- despite producing some of the world's first and best smartphones. Today and tomorrow are new days. Nokia has a worldwide presence, relationships with carriers, and I'm guessing the company sees the writing on the wall and is hungry. To survive, they'll need to forget past successes and do everything better than ever before.
5. Business integration. Four years is a long time. Microsoft may come up with some seriously awesome business integration. I'm just saying, it's possible. And while the iPhone has "consumerized" IT departments, IT pros still think in business terms.

On the Other Hand ...

Now here's why I think the IDC report is just a possible reality ... and not even necessarily the most likely version of our smartphone future.

1. Apple is a moving target. Face it, the company is an innovator. Apple doesn't always invent entirely new products, but Apple is damn good at reinventing them. In four years, we might think of our iPhone 4 as a kludgy little paperweight.
2. Brand recognition and desire. Apple still has a heckuva lot of brand recognition and desire. Many Android phones aren't bought because the consumer wants Android. They're bought due to availability. The same will go for Windows Phone 7. A customer's carrier will offer the unit, they'll have pricing incentives, and the consumer will walk away with it. If Apple can offer the iPhone to more outlets, consumers will choose it. The Apple brand is iconic and recognizable. Even the product placements on "Castle" for Windows Phone 7 ... it's hard to recognize the hardware and even the software as anything special. That's rarely a problem for Apple, and Apple knows how to keep that rolling. White earbud headphones ... case in point is all.
3. New models of iPhone. If Apple can either offer very cheap acquisition costs for iPhones as feature-rich as the iPhone 4 -- AT&T's (NYSE: T) $49 iPhone 3GS is pretty good, but not good enough -- Apple can pick up a lot of the feature phone market as those customers naturally upgrade. Offer an iPhone nano, and boom, the numbers game will change.
4. The power of the iOS ecosystem. Sure, Apple is only a niche player in the PC world, but it's a dominator in the tablet world. In addition, its smartphone and iOS devices work with PC users. So the power of PC operating system integration with a smartphone is becoming devalued, which tends to mitigate the benefit of PC market share. Meanwhile, the iOS App Store is still much better than competing app stores -- particularly for regular consumers. Will feature phone users gravitate toward the ease of the iOS world? If the price is right, I think they might.
5. Apple is slowly becoming better with businesses. Apple's enterprise plays have been driven by consumers. By 2015, might Apple start playing nice with the business world? If Apple made enterprise-friendly moves or a special business iPhone, it might change IDC's forecast.

Another Way to Read IDC's Forecast

There is another way to read IDC's forecast, and it has nothing to do with storm clouds for Apple: Windows Phone 7 will only make stunning gains through the help of Nokia as it eats up previous Symbian market share. And come 2015, Windows Phone 7 may simply have market share ... but only manage to hang onto a sliver of mind share pie. Either way, even if Apple's market share actually drops half a percent on the road to 2015, Apple will still enjoy increasing iOS smartphone sales, and presumably, maintain excellent profitability.
Besides, if Apple maintains a niche position, hardcore Apple fans will get to keep their identities without becoming quite so mainstream, which might actually be the most healthy scenario for Apple and Apple lovers in 2015.