The smartphone industry is at an interesting point in time. In 2007, Apple’s iPhone practically invented — or re-invented, if you will — the current smartphone age with a full capacitive touchscreen and support for mobile apps. Google Android followed in 2008 and although it was slow to catch up, is relatively on par with iOS in terms of usability and app support.
Can Microsoft and RIM succeed where others have failed?
These incumbents — Apple and Google’s Android partners — account for 89.9 percent of smartphone sales as of the third quarter of 2012, per IDC. Some alternative platforms, such as Palm’s webOS and Nokia’s Maemo software, entered the market only to disappointingly disappear: webOS is now an open-source platform and Maemo became MeeGo, which Nokia abandoned when it chose to use Microsoft’s Windows Phone software. Windows Phone has been around for two years but has relatively little in the way of sales to show for it.
With Windows Phone 8, however, Microsoft now has its best chance for success. It appears that Research In Motion’s BlackBerry 10 system, which will be unveiled on Jan. 30, is RIM’s last-ditch effort at relevancy as well. I’ve used, and like using, Windows Phone 8 and I also like what I’ve seen from RIM as it has shared limited details of BlackBerry 10. But I’m unlikely to switch platforms now and based on the timing of these two products, I except many current smartphone owners to avoid switching as well.
What can a new smartphone platform offer at this point?
There are a few reasons why I think this, with the first being the maturity of the current smartphone platforms. After five years in this current age, all the heavy lifting is done, meaning the biggest platform breakthroughs have already been made. Put another way: All of the recent incremental upgrades to iOS and Android are just that: incremental. The pace of change for a native smartphone operating system has slowed and the changes themselves are mainly small features or minor user interface tweaks.
Of course, it’s always nice to have more options. And in my opinion, some native smartphone features are actually better on Windows Phone than on Android or iOS.
The People hub in Windows Phone, for example, makes it easy to see all of your contacts, their social status, updates and photos. While the approach is sound, and perhaps even better than contact management on alternatives, one could always add Facebook sync to their phone for a similar experience. So the value of the People hub is diminished when making comparisons.
And while RIM employees I’ve spoken with tell me that the BlackBerry fan base is excited by BlackBerry 10, nobody at RIM answers me directly when I ask, “Yes, but what feature(s) will broaden the BlackBerry base?” which has been shrinking over time.
Consumers aren’t buying hardware, they’re investing in platforms
I’ve been saying this for months, if not years: The battle for smartphone dollars is only partially won or lost by the hardware itself. The longer a handset owner sticks with one platform, the more they invest in content and apps that only work with that platform. This lock-in cost — something I mused about over two years ago — is a potential barrier to switching. And for those who invested early in a platform, as much as four or five years, its highly unlikely a switch will occur. Who wants to re-buy premium apps, books, videos and other content?
To Microsoft’s credit, it has more of a platform play than Research in Motion does. Between Windows 8 and its Xbox Live service, Microsoft has a wide range of support for music, videos, games and more. So far, however, that platform strength hasn’t equated to Windows Phone sales. Microsoft’s Xbox 360 has the been the best-selling console for 23 consecutive months and total lifetime unit sales hit 70 million as of Microsoft’s most recent fiscal quarter. Yet, Windows Phone shipments in the third quarter of this year are estimated to be 3.6 million handsets. To put that in perspective: 1.3 million Android devices are activated each day. And Apple just sold 2 million iPhone 5 handsets in China during this past weekend.
Maybe there won’t be a third-horse in this race after all
Barring any major smartphone advances by Microsoft or RIM now, neither appears poised to become a third horse in smartphones, at least when it comes to smartphone switchers. Bad timing and prior consumer investment are sure to hold back both platforms, at least in areas where smartphone penetration has already reached the tipping point. Could either of these do well in other regions, however?
Yes, they can, but the upside appears limited in my opinion. Even in areas where the smartphone population is low, both platforms are competing against low-priced but still capable Android handsets or older, and less expensive, iPhone models. Even so, I think the idea of catering a low-cost device to first-time smartphone buyers — exactly what Nokia is doing with its Lumia 620 — is a smart play at this point. That strategy may not get you or I to switch platforms, but it could rack up sales through first-timers.
Whether you currently own a smartphone or still have an old feature phone, I’d be curious to hear your thoughts: What will it take for you to switch to or initially start with Windows Phone 8 or BlackBerry 10?
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