Microsoft is a company at crossroads. While Windows 95 and XP were huge success stories, they face with issues when the smartphone / tablet industry took off, with Apple leading the fray. Windows Mobile was at best, clunky and problematic, as compared to the sleek iOS based iPhone. The original iPhone was launched at the peak of Windows Mobile’s powers in 2007. Back then, Windows Mobile had 42% of the US market share, which dropped at a rate of almost 50% yearly. By 2011, Windows Mobile only had 3% market share for US.
Windows Phone was launched in November 2010, and has struggled to gain market share as well, at times falling to as low as 1.3% world wide. As such, it is safe to say that Windows Phone 8, has not taken off as much as Microsoft would have liked them to. However, with the latest numbers from IDC, Microsoft is indeed gaining market share with Windows Phone 8, but at a snail’s pace.
Windows Phone vs iPhone
IDC has projected that Microsoft and its various manufacturing partners will ship 43.3 million Windows Phone this year, which would give Microsoft 3.5% of the overall world-wide market share. Interestingly, Chinese startup, Xiaomi, is planning an ambitious 60 to 80 million Android based smart phones this 2014, which would make them one of the top 5 manufacturers of smartphones, if it were to happen.
Against this, Microsoft is growing, and is expected to reach an overall market share of just 6.4% in 2018. Healthy, but not really mind-blowing. Despite this, it would mean a growth rate of 28% year on year for the next few years.
Interestingly, on the Windows Phone vs iPhone debate, the iPhone is expected to grow from 184.1 million smartphones in 2014, to a 247.4 million in 2018. However, that would also mean a projected decrease in market share of 14.8% Much of it is blamed on the lack of a low-cost smart phone in Apple’s stable. But for us, it would also mean, updated phones which would be much more stable and having vetted apps, as compared to Android or Windows Phone.
Just because Samsung has churned out and winning low-end smart phone market (in place of Nokia), it doesn’t mean that it is better. Low end smart phones which would be kept by people in poorer countries would be a security problem by itself, as Samsung’s Touchwiz and apps tends to take up much resources. After awhile, most of the exploits on these phones become known, but the users of the phone won’t care, nor do anything about it.
Windows Phone vs iPhone : The software issue
However, this isn’t an Android vs iPhone debate, but rather a Windows Phone vs iPhone. In that sense, iPhone and iOS still has a big lead in terms of quality apps compared to Microsoft’s Windows Phone. Due to the various screen sizes, Android versions and hardware, even Google’s Play Store lacks quality apps as compared to Apple’s Appstore. And with Google’s Play Store having issues of malicious apps (as below from Wikipedia), the question would be, would Windows Phone be able to maintain a control of malicious apps as they continue growing?
According to a 2014 research study released by RiskIQ, malicious apps introduced through Google Play store have increased 388% between 2011 and 2013. The study also revealed that the number of malicious apps removed annually by Google has dropped drastically, from 60% in 2011 to 23% in 2013. Apps for personalizing Android phones led all categories as most likely to be malicious. The most downloaded malicious app in 2013 was Talking Angela.
Hackers at Black Hat in 2012 claimed to have found a way to circumvent the Blocker system by creating a seemingly benign application that used a JavaScript exploit to turn into an app capable of stealing contacts, SMS messages, and photos.
Harder still for Windows Phone would be to attract quality programmers to program great apps for the Windows Phone. After all, how useful the phone could be, depends very much on the apps ecosystem that it has. If Microsoft is able to grow a strong Windows Phone Store, they would indeed have a future in the mobile industry.
Report from IDC as below.
Smartphone Momentum Still Evident with Shipments Expected to Reach 1.2 Billion in 2014 and Growing 23.1% Over 2013, According to IDC
FRAMINGHAM, Mass. May 28, 2014 – According to a recently published mobile phone forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, worldwide smartphone shipments will reach a total of 1.2 billion units worldwide in 2014, marking a 23.1% increase from the 1.0 billion units shipped in 2013. From there, total volumes will reach 1.8 billion units in 2018, resulting in a 12.3% compound annual growth rate (CAGR) from 2013–2018.
“What makes smart phone growth so amazing is where the growth will be taking place,†said Ramon Llamas, Research Manager with IDC’s Mobile Phone team. “Smartphone shipments will more than double between now and 2018 within key emerging markets, including India, Indonesia, and Russia. In addition, China will account for nearly a third of all smart phone shipments in 2018. These – and other markets – will offer multiple opportunities to vendors and carriers alike, but the key will be balancing affordability with expectations.â€
On a worldwide basis, IDC expects the average selling price (ASP) of smartphones to reach $314 in 2014, down 6.3% from the $335 ASP in 2013. From there, ASPs are expected to reach $267 by 2018. While these prices point to a definite decline, users still expect top-notch experiences regardless of what smart phone they purchase.
“Until recently, low cost has equaled poor quality in the smart phone space,†said Ryan Reith, Program Director with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Given the competition at the high end, vendors like Motorola are trying to skate to where the puck is going by offering extremely affordable devices like the Moto E, which offer a ‘good enough’ experience that will suit the needs of many. This goes to show that components that were used 2-3 years back in high-end smartphones are still sufficient in many aspects, and ultimately will allow vendors to come to the table with viable low-cost solutions.â€
Operating Systems
Android –Android will undoubtedly remain the clear market leader among smartphone operating systems with share expected to hit 80.2% in 2014. Looking forward, IDC expects Android to lose a minimal amount of share over the forecast period, mainly as a result of Windows Phone growth. Android has been, and will continue to be, the platform driving low-cost devices. ASPs of Android smartphones were well below market average in the first quarter of 2014 and are expected to be $254 for full year 2014, dropping to $215 in 2018. Growth of Android phones is expected to outpace the market in 2014, rising 25.6% with volume just shy of 1 billion units.
iOS – Despite rumors of a larger screen iPhone, IDC expects share of iOS to drop from 14.8% in 2014, to 13.7% in 2018. Apple continues to be strong in mature markets, where devices are heavily subsidized, but emerging markets are expected to drive overall market growth, and appetite for smartphones in these markets is at the sub-$200 level, significantly below Apple’s selling prices. iOS volumes are expected to hit 184.1 million in 2014, growing to 247.4 million in 2018. Growth of 20.0% this year will slowly drop to year-over-year growth of 6.1% in 2018, more in line with overall market growth.
Windows Phone – Windows Phone continues to slowly build its global footprint, and growth is expected to outpace the market throughout the forecast period. In 2014, volumes are expected to grow 29.5% over 2013, reaching 43.3 million shipments. This momentum is expected to continue into 2015, reaching 65.9 million units, continuing on to 115.3 million in 2018. It is somewhat unclear what Microsoft has in store for its recent acquisition of Nokia, but an additional positive is the number of new OEM partners recently announced. At Microsoft’s Build conference this year, the company announced a number of key features that had been visibly absent from the platform in the past. If more OEMs get behind the platform, and device portfolios continue to scale the cost spectrum, Windows Phone can continue to gain momentum.
BlackBerry OS – IDC continues to reduce its BlackBerry forecast across the board with volumes expected to drop 49.6% in 2014, equivalent to 9.7 million units. Looking forward, volumes are expected to continue to decline to 4.6 million units in 2018. The question of whether BlackBerry can survive continues to surface, and with expectations that share will fall below 1% in 2014, the only way the company will be viable is likely through a niche approach based on its security assets.
Worldwide Smartphone Forecast by Region, Shipments, Market Share and 5-Year CAGR (units in millions)Â
Source: IDC Worldwide Mobile Phone Tracker, May 28, 2014