So. How well can Microsoft succeed with the Windows Phone?
Autor: rodrigottr | Publicado: 2011-10-31T08:51:00-07:00


Since the flop of last year Microsoft has evolved a lot their platform. Important missing things from last year's version, like the multitasking and copy and paste are there now. But anyway the sales didn't raised and now comes the moment of truth. Nokia has already showed us the beautiful Lumia phones. Samsung, HTC, and Fujitsu have already showed their Mango phones. And now they even have a new reason: Google just scared them when bought Motorola. They all with their Asian sense of self preservation wish to be less dependable of Google. And suddenly the WP became more interesting. 

Now, how successful will be the WP in a market dominated by the solid ultra loyal iPhone or the flexible Androids?

First of trying to answer this is healthy to take a look to some cases of innovation adherence looking for an answer to what does make a new technology to be adhered or not?


The case of JVC's VHS vs Sony's Betamax:


On the market for Videotapes both Betamax had 100% marketshare on 1975. Beta had a higher quality but only 60 minutes capability and was more upmarket focused. Aiming people who wanted quality and were prepared to pay for it. While the VHS had 120 minutes with lower quality and superior support for rental chains. This superior support was due the ownership of these chains by Ferguson Eletronics, who were part owned by JVC. Sony also refused to allow pornography on their Betamax system. This is believed by some to have driven a significant amount of sales to VHS machines. With this, by 1981 Beta sales had sunk to only 25% and by 1986 to 7,5%. 


The case of Sony's Blu-ray vs. Toshiba's HD-DVD


This is a similar case where HD-DVD had the head start as the Blu-ray sales where slow to gain market share. The first Blu-ray Disc player was perceived as expensive and buggy. But the appearence of Sony's Playstation 3 helped turning the tide. By 2007 the BD had outsold the HD-DVD about two to one and by January of 2008 the Warner Bros. announced that it would release only in Blu-ray Disc after May 2008. This effectively included other studios that came under the Warner umbrella, such as New Line Cinema and HBO. This led to a chain reaction in the industry, with major U.S. retailers such as Best Buy, Wal-Mart dropping HD DVD in their stores. 

In February 2008, Toshiba withdrew its support for the HD DVD format, conceding victory to Blu-ray Disc.


What do they mean?


While most specialists on innovation can't say what exactly makes an innovation to become succesful and have high adherence most agree that for having adherence a innovation must have this things:


1 - to add value by the technology itself
2 - to add value to strategic stakeholders
3 - to add value to end consumers 


On the technology itself, compared to VHS, beta added more value due higher quality even having lower time recording. To its strategic stakeholders VHS had a better support for rental chains which ended up adding more value to most of consumers, mostly more focused on titles for rent then video quality.

On Blu-ray vs HD-DVD the fact that the Blu-ray had superior technology was balanced by its also higher price and buggy state of development on early 2006. But was through getting the adherence of the strategic stakeholders (Warner Bros.) that provoked a chain reaction ending on Toshiba's conceding victory. 

The comparison between the two examples is important to show that not always the superior technology becomes the industrial standard and the participation of some agents inside the ecosystem is extremely strategic and this takes us back to our analysis of the smartphone ecosystems. 



iOS vs. Android vs. Windows Phone



In the beginning of 2010, when happened the introduction of the Android handsets I made a similar analysis comparing the standardized iPhone with old Henry Ford's always black T-Models with the many colored Chevrolet. And the coincidence is that the standardized Fords created the market of assembly line made cars but lost its leadership for the new challenger Chevrolet. 

Based on that I stated that Android would surpass the iPhone on sales and they did it. In February of 2011 Android had surpassed not only the iPhone in the US but also Symbian OS globally. 

Now we have a new challenger. Which looks a bit like Ford and a bit like Chevrolet but also with its own peculiarities. 

The Windows Phone 7, now rebranded to Windows Phone, has in common with the iPhone the fact of being a hadly controlled ecosystem, where there is no way of installing content from outside the Windows Marketplace. Only Microsoft's authorized applications can go. You also can only set your phone by plugging it on your PC through a software similar to the iTunes called Zune. Apps developed for the Windows phone can also easily be ported the future Windows 8 and the XBox 360. Just like the iPad accept iPhone Apps. The OS also can't be changed by manufacturers or carriers. Is fully integrated to Skype and Facebook. 

From the hardware side the WP ecosystem looks more like the Android phones. Mostly Asian manufacturers with big black plastic bars with 4 inches screens but less flexibility for being ported to cheaper hardware. There are Android phones costing almost 160$ while the cheapest windows phones prices are something around 270$. 

From the perspective I used in the first comparison between iPhone and Android is clear that the ecosystem with biggest capability to being adapted to the widest demands from all kinds of players is the ecosystem with more possibilities of getting larger. From that perspective WP sits between the iPhone and the Android, but sitting a bit more closer to the iPhone. 

Although a new ecosystem is needed for saving most players from the division between iOS and Android we don't know if this hypothetic ecosystem should be better more closed or more open. For some players like developers the closed ecosystem makes their lives easier and their works more profitable. From the point of view of carriers (the players who actually sell the product to the end consumer) the most open platform is the platform that can offer their own products and services on it more easily. That explain the impressive performance of the Android phones. And that points that Windows Phone would have less support from carriers then Android has as it explains why it didn't received this support until now. And lets remember that carrier support here is comparable to the doctor's opinion when you need a medicine. They have a strong power for influencing the consumer and would always prefer pushing those products that benefit themselves more. 

From hardware makers the Windows Phone was clearly left to second place. Some of them mentioned abandoning the production of the Windows Phone but I guess they gave it a second chance since Mango update and Motorola's acquisition. Anyway, none of them has possibilities of differentiating themselves through software (theoretically Nokia has but has not), and also, Windows Phone is licensed and they should pay something for using it, while the Android OS is completely free for manufacturers. Making their prices higher compared to Android handsets. 

From software point of view it seems the Windows Phone is aiming more over the iPhone. With "Apple like" uptate policies and "app" policies it seems to be aiming on users or developers who enjoy that kind of support security and predictability. Although Windows Phone seems to be very focused on developers, there will be a very long distance until it reach the amazing developers support it has.

From distribution point of view the Windows Phone will face some of its greatest challenges. Outside the US, specially western Europe, home market of Nokia, the WP has quite good chances. The products would surely call some attention from consumers. But there is no special reason for carriers giving this system more support then they give to the strong branded iPhone. And more support then they give to the carrier friendly Android. The WP would also have to face the bad legacy of the Windows Mobile 6.5 brand and also the bad legacy of Windows brand in general. Even worse when the greatest competitor is strong branded Apple. This hard job would have to be done by Nokia supply and sales force. Which in Europe will be much easier. But in the US the home market of Microsoft, is the real challenge. Nokia has absolutely no carrier support there and won't even bring their new phones to the US in this Christmas. Neither Microsoft has carrier relationships since dealing with carriers was never part of Microsoft work before. In the US Apple has own Apple branded stores while Windows Phones would have to fight for space inside carriers stores where the Android is the their favorite. And probably will remain the favorite of the manufacturers also. Out of US and Europe the Windows Phones are too expensive for gathering enough market share and probably that isn't even the intention of Microsoft. 

It seems that the Windows Phone still has not gathered enough support from some strategic stakeholders. And even more from those who have more impact on sales. Developers still in very little number, both carriers and HW makers had not given enough support for it until now and the only changes since the flop of last year was Mango (some more features to the OS) and Nokia's bet on Windows Phone. So it is unlikely they will give it a much bigger support now and still is a incognito how able Nokia will be to influence carriers on its support remembering that todays Nokia isn't the Nokia from Q1 of 2011 who was the biggest phone maker and now is on the third position behind Apple and Samsung. 

Because of all that, I say that I will be very surprised if the Windows Phone one day surpass the iPhone in marketshare anywhere. Considering that in Europe it has much better chances then in US. But in the US is very unlikely for that to happen. Much less likely for Widows Phone to surpass Google's Android.

As a conclusion I state that the big unarguably leader on this round is still Google with it's flexible, carrier friendly, manufacturer friendly, virus friendly, Android OS. And also take this chance to remember you that Android is only one piece in the Google's strategy composed by search engines, Youtube, social media, cloud, Chrome browser and many other things plus Android. And would like to leave you with one little question: could you live without Google? 

I can easily live without Apple.
With some sacrifice I learned how to operate Linux OS and now I can live without Microsoft at least 95% of my time.
But there is absolutely no possibility of I living without any Google product. And believe me, I really would like to do it.