International Data Corporation released its newest smartphone market report today, and rather than the typical forecast of unprecedented growth–49.2 percent growth and shipments of up to 450 million in 2011–it was a different announcement that seemed shocking.
IDC predicted that the Windows Mobile OS, which now controls 5.5 percent of the smartphone market, will shoot to prominence by 2015, seizing market share from the Symbian OS (which is going to die, according to IDC) and jetting to second place behind Android. The Windows Mobile OS by 2015 will control 20.9 percent of the market, beating out Apple’s 15.3 percent and planting itself behind Android’s 45.4 percent.
IDC is putting a lot of trust in Microsoft’s recent and controversial deal with Nokia, which saw Microsoft paying $1 billion for the company’s promise to make the Windows Mobile OS its primary platform. “The new alliance brings together Nokia’s hardware capabilities and Windows Phone’s differentiated platform. We expect the first devices to launch in 2012,” Nokia’s Ramon Llamas said in a statement.
Basically, Nokia’s deal with Microsoft replaces the Symbian OS, which currently has–you guessed it–20.9 percent of the market. It seems to make sense, but there are quite a few pitfalls.
First of all, the results seem to assume a large portion of Nokia’s subscribers will simply switch to Windows OS once Symbian is stamped out rather than going to other platforms. This is problematic because the Finnish company is notoriously slow and has a poor track record when it comes to delivering quality smartphones.
Consider Nokia’s recent history. First, in 2009 Microsoft and Nokia failed to initiate Microsoft’s email software, Exchange, on the Symbian platform. Throughout 2010, Nokia’s product cycles slowed to 18 months; by comparison, companies like Apple churn out new smartphones every six to eight months.
To make matters worse, Nokia is in upheaval following the new Microsoft deal. The company’s shares fell 25 percent after the deal was announced. Several of the company’s key engineers and execs have quit. According to a report from Bloomberg, Finnish engineers have a reputation for being pro-open source–like Android. Microsoft on the other hand is of the walled-garden persuasion–like Apple. This has caused for internal tension and an exodus of some of the company’s talent.
Meanwhile, the Finnish company’s new CEO, Stephen Elop, must try to wrangle in talent, get everyone to focus, deal with unions in Finland that have promised a four-week summer hiatus each year. Amid all this turmoil, how is Nokia supposed to develop great phones–phones that compete with Android and Apple, new phones that come out as rapidly as Android and Apple’s?
It’s predicted that the next wave of Nokia phones are supposed to come out in 2011. They should be bulk shipping by 2012. While it is a given that Microsoft’s market share will improve in lieu of Symbian’s demise, it seems that both Nokia and Microsoft could see a great portion of their customers switching to Apple and Android–especially if Nokia doesn’t get its act together.