The latest IDC report of Q3 2012 smartphone shipment paints a grim picture for Microsoft: a mere 2% for MS smartphone platform versus 75% and 15% for Android and iOS respectively.
But those numbers do not reflect WP8 as it was shipped after Q3. WP8 is by all accounts a fantastic product; Nokia, HTC and Samsung are also backing it with strong hardware. The future seems promising for Microsoft.
And I would agree with that. I think Microsoft is likely to grow its smartphone share over the next several quarters, albeit slowly.
Why a Great Product isn’t Enough Anymore.
The biggest mistake Microsoft has made in the smartphone war is that it was late. Windows Phone 7 (which is really the first viable competitive offering in *modern* smartphone platforms) was shipped almost 3 years after the first iPhone was introduced.
And in this cut-throat, fast-pace technology world, that’s eons.
Being late means Google and Apple have had much longer time to ramp up their own ecosystems, which are increasingly important to consumers. It’s no longer only about the device you hold in your hand; consumers now look at apps available, how services work across their multiple devices, and whether services are interoperable with their friends and families.
In short, Windows Phone still has a big chicken and egg problem to solve.
Is that app on Windows Phone?
For a long time, many analysts have blamed Windows Phone’s slow uptake on the lack of key popular apps. That’s certainly part of the problem, but I think it also doesn’t tell the whole story.
Microsoft has done a great job in making sure that Windows Phone has an extensive app catalog and that top apps are available for it. During the Windows Phone 8 launch event, Joe Belfiore announced that the WP app store now has over 120,000 apps, and 46 out of the top 50 apps on rival platforms are also available on Windows Phone. So from that angle, the lack of apps problem should be gone.
Only it’s not. At least not yet.
Microsoft has invested heavily in making sure popular apps on rival platforms are also available for Windows Phone. But that’s by definition backwards looking. The problem is that new apps that are coming in the future will almost guaranteed not to be available for Windows Phone first. And that’s a big problem. Consumers who are buying an iPhone or an Android phone knows with high certainty that their platforms will be the first to be supported by mobile developers. Quite often these days, you can go to any public places and see signs showing that mobile apps are now available, but they almost always only support Android and iOS. Whether consumers want to use those apps or not is irrelevant. The point is that when people see one of those signs, it reinforces the notion that “things are available for iOS and Android (and not much else)”. So when it comes time to buy a new smartphone, consumers can buy an iOS and Android device and be certain that whatever the latest cool apps/games that will come, they will be first available on those platforms.
Can’t really say that about Windows Phone.
This is a classic chicken and egg problem, and there simply isn’t an easy way to solve it. Developers aren’t interested in developing for Windows Phone platform because of the small marketshare; users don’t want to buy Windows Phone because of the lack of apps.
I want my smartphone stuff on everything!
And increasingly, consumers also look at how their smartphone choice impacts their experience on other devices that they use. Email was one of the first services that people expect to be able to use from their smartphones, PCs, tablets, and anywhere else. But that’s quickly extending to other services: cloud storage, IM and other communication clients, blogging services, cloud bookmarks, etc. We want all these services to treat us as the same person even though we are accessing them from different devices; we want a unification of experiences across all these different screens and be able to seamlessly transition across them. I think the industry is still pretty early in deliver great multi-screen experiences, and I think there are tons of opportunities here.
But bringing the conversation back to Windows Phone, Microsoft is actually doing ok in this area. Photos taken on WP8 phones are automatically uploaded onto SkyDrive and become available on Windows PCs or accessible on the web. There is good integration with Messenger and Facebook Chat. However, there is much more to be done. The most glaringly obvious one is the lack of bookmark sync, which is available on both iOS and Android platforms via Safari and Chrome respectively. I would also say that Google is the leader is offering services that work well across multiple devices at this point.
Can we still be friends even though I have a Windows Phone?
The funny thing about your choice of device these days is that it’s no longer an isolated decision for many people. Take myself for example - I have been a long time iPhone user. My wife, my parents, my brothers, and many of my friends use the iPhone. My wife and I frequently use Find My Friends to see where each other is; my parents often use FaceTime to call us so they can see their granddaughter; sometimes my friends and I would chat about what are the latest cool apps they have when we get together.
You get the point. For most people, switching smartphone platforms is costly from a social perspective too.
I have recently switched from an iPhone 5 to a Lumia 920 and I am happy with it. The bigger screen, better camera, touch screen that works with gloves, wireless charging and the beautiful user experience makes the phone a joy to use.
But my switch isn’t without its pain. Some of my favorite apps like Redfin, Dropbox, Starbucks, Mint.com, Voxer, and Fidelity are not available on Windows Phone (although for some of these 3rd party developers have filled the void). I can no longer use Find My Friends with my wife. I can’t use FaceTime with my parents anymore and will have to ask them to use Skype instead. I can’t open the same websites on my phone as I have on my desktop Chrome browser anymore.
For now, I am putting up with some of these pains, but I am a geek and an early adopter. I suspect most people wouldn’t do the same and would rather stick with “known quantity”. Although WP8 is a fantastic product, it still won’t solve the platform’s chicken and egg problem overnight. Microsoft needs to continue to add critical and unique value to the Windows Phone platform to grow market share. Not until WP’s marketshare gets close to iOS and Android will developers start treating it with first class attitude. Making business deals for developers to create WP apps isn’t scalable and does not address the long-term issue.
*Full disclosure: Microsoft is my current employer, but I have no inside information or ties with anyone on the Windows Phone team any longer.