More Head Wind For Windows Mobile

November 7th, 2008 · No Comments

Mobile OS Market Share

Analyst firm Canalys has released the results of it’s Consumer Mobility Analysis Report and it is very good news for Apple, good news for RIM and Microsoft and bad news for Nokia:

The success of Apple and RIM, as well as fifth-placed HTC with its Windows Mobile devices, has eaten into Nokia’s share of the smart phone market – a market it has led consistently for several years. Nokia’s broad portfolio of models, and the wider audience it attracts, does leave it more exposed to the trends affecting the overall handset market. Year-on-year its smart phone shipments fell in Q3 for the first time. “Nokia is also transitioning from some very successful volume drivers, like the N95 and E65, to a number of successors, such as the flagship N96, and shipments of these new models have not yet ramped up,” noted Canalys analyst Tim Shepherd. “And Nokia has taken time to bring a touch screen product to market in the wake of the iPhone’s success, despite having had the experience of producing the Series 90-based 7710 four years ago. Conversely, vendors such as HTC with its Touch Diamond have capitalised on customer demand for this type of product.”

As every one expected in the Apple earnings conference, the Apple iPhone 3G has leaped past RIM to take number two position for smartphone shipments. Blackberry still grew at a healthy clip but expect their margins to be squeezed as they sell more “down market” phones such as the curve.

Nokia has nowhere to go but down currently as the buzz is elsewhere with the Apple RIM battle and the coming rationalization of the Linux market with the Andriod Operating System.

The odd man out is Windows Mobile. After 8 years on the market, it has failed to grab more than 13% of the market (much like SQL Server) and is coming under heavy criticism for it’s interface and jumbled approach to the mobile market. HTC is the number one shipper of Windows Mobile, but they have put a tremendous amount of effort behind the new T Mobile G1 device. If Andriod does big things for HTC (and Samsung) then life gets very uncomfortable for Windows Mobile.

Windows Mobile currently costs vendors between $8 - $15 per handset which translates into $40 - $65 million in license fees per quarter. If Android can show an increased ARPU (average revenue per user) for the carriers in the same way as Apple iphone has done for ATT Wireless, then it is going to put Microsoft in a difficult spot. Smartphones for consumers are all about functionality, but smartphones for carriers are all about more data packages and more revenue.

However Microsoft understands that the future of mobile is tying data-sucking services to the device and not just mobile Outlook but a host of services including location, search and social stuff. Microsoft has a long way to go to convince carriers that they are in the game.

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