What goes up must come down and on Wall Street, billions are made and lost betting on which direction companies are headed.
Apple
is the most valuable technology company in America by a huge margin so
needless to say, it gets plenty of attention on the Street. At some
point, be it sometime in the next few years or sometime in the next few
decades, Apple will no longer be on top. It is inevitable. The question
countless industry watchers try to answer, of course, is when.
Various
guesses — sorry, estimates — have been made in recent years, and the
boldest among them have been off by a laughable margin. In mid-2011, for
example, Pyramid Research
released projections that showed Windows Phone’s global market share rocketing past iOS later that year and then going on to overtake Android in early 2013. Fast forward to the third quarter of 2013 and
Windows Phone’s market share still sits in the low single digits.
At last count,
Android was installed on an estimated 81% of all smartphones that
shipped globally last quarter, iOS’s market share was 12.9% and Windows
Phone’s share rounded out the top-three at 3.6%.
Earlier this week, another bold prediction was offered by
Forbes contributor Mark Fidelman. According to Fidelman,
Microsoft will overtake
Apple in the mobile market in three years.
Now,
this prediction is hardly as outlandish today as Pyramid’s was back in
2011. Google’s land-grab strategy has ensured that Android will sit at
the top of the mobile food chain for many years to come, at least where
market share is concerned. Beneath Google, however, there is definitely
room to play. We have seen no evidence that BlackBerry’s smartphone
demise will reverse course anytime soon. This leaves Apple and Microsoft
exchanging blows for the time being.
Fidelman makes several
points to support his theory that Microsoft will be No. 2 in mobile
three years from now. First, he mentions momentum. “If you look at the
numbers, the Windows Phone is the fastest growing smartphone platform,”
Fidelman noted.
This is absolutely accurate. 9.5 million Windows
Phones were shipped in the third quarter according to IDC, which is 156%
growth over the same quarter in 2012. This pushed Microsoft’s share of
the global smartphone market from 2% in Q3 2012 to 3.6% last quarter.
Meanwhile, the Apple’s global smartphone market share dropped from 14.4%
to to 12.9% on iPhone sales totaling 33.8 million units.
The numbers don’t lie, but they also don’t tell the whole story.
Consumers
were slammed with iPhone 5s and iPhone 5c rumors for months leading up
to the debut of its latest smartphones. As a result, a number of
analysts believe iPhone sales slowed pretty dramatically leading up to
the release of Apple’s new iPhones, which were then on sale for just 11
days in the third quarter. Meanwhile, a number of new Lumia phones
debuted in emerging markets, which is where Nokia and Windows Phone
gained the most ground.
The fourth quarter will undoubtedly paint a very different picture as consumers spend three solid months
buying the iPhone 5s as quickly as Apple’s manufacturing partner can build it.
Fidelman
made several other arguments in his column. He points out the deep
integration between Microsoft’s mobile operating system, its desktop
operating systems and the Xbox. This is an argument we have seen fall
flat for years now, but it has become more real in recent months now
that Windows 8.1 and the new Xbox One have launched. It is easier than
ever for developers to create apps and games that provide an integrated
experience across not just two or three but four different screens — the
phone, the tablet, the PC and the TV. In future versions of each
Microsoft platform, it will be even easier.
“As Microsoft rolls
out its integration capabilities to business people across the
enterprise through Office 365 and Windows 8.1, and to consumers through
the Xbox, Microsoft will pick up a lot of new users that are looking for
seamless app integration across their business and home lives,”
Fidelman wrote. “Most people will not want their information stuck in
separate operating systems for much longer.”
In the end, Fidelman
thinks Microsoft’s “One Microsoft” initiative will spur huge mobile
growth by facilitating deep integration across all of Microsoft’s
platforms (
he better hope Elop isn’t Microsoft’s next CEO).
This, combined with Microsoft’s acquisition of Nokia’s devices and
services business will “help them regain a leadership position in the
mobile market because a low cost, integrated smart phone will be too
good an option to pass up for users in emerging countries. Moreover,
home and business users will increasingly realize the benefits of a
seamless user experience across screens and gravitate to a Windows
platform that maintains their play and their work no matter where they
are.”
An interesting take that is marred by this gem of a
disclosure: “Disclosure: Nokia is a customer of Evolve! a company that
Fidelman is a Managing Director.” Evolve!, by the way, is a “social and
digital marketing organization that blends influential people and the
media with social campaigns to create high awareness and leads for our
customers.”
Conflicts aside, Microsoft is unquestionably the best
positioned company in the world right now to challenge Apple’s mobile
market share position. But it arguably has been since late 2010, more
than three years ago, when Windows Phone first launched. The issue has
always been a lack of execution and compelling differentiation.
Can
Microsoft execute? Will developers finally be wooed by the company’s
multi-platform offerings? Can Microsoft do a good job of not just giving
consumers and businesses a reason to switch to Windows Phone, but also
showing them with exciting and informative marketing campaigns?
Everything looks perfect on paper, but the proof is in the pudding.
