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Microsoft Mobile To Surpass Apple In 2015

One of the more surprising things that caught my attention from Business Insider today was the forecast that Microsoft & Windows Phone would have a greater global marketshare than Apple & iOS by 2015. Research firm Gartner is predicting that their marketshare will be around 20% with Apple declining from a peak of 20% in 2011 down to 17% in 2015.

Other interesting points of note is the prediction for Google’s Android OS to hit close to 50% marketshare in 2015 and Research In Motion (RIM), maker of Blackberry to fall to 11%

I guess what shocked me about this initially would imagining the maker of the ever popular iPhone, iPod Touch & iPad ceding market dominance to a competitor which barely has a foothold in the market today. I mean walk out into the street tomorrow in Midtown Manhattan, Hollywood Blvd or Downtown Austin, TX and ask them;

1. Do you know what the iPhone is?
2. Do you own or would consider buying an iPhone?
3. Can you name any Microsoft phone?

My prediction is that; “Yes, Yes, No” would form maybe 70% or more of the responses you would get. And 12 months from today, I would even be as so bold to wager that it would change much. So the question then becomes, if a year from now in April 2012 you could walk down any street in the country and get little to no recognition for Microsoft’s foray in Smartphones via Windows Phone, how could a mere 3 years later the iPhone be in a losing position.

Well this where Nokia enters the picture. While a relative minor player in the US, Nokia sells more handsets globally than any other manufacturer and thus its current Symbian OS is also the Smartphone OS leader. To put it in context at 37% it is getting close to double Android’s 22% market share and well over twice iOS 16% market share.

Nokia and Microsoft have entered into an Alliance whereby all Nokia handsets will carry Windows Phone from 2012. Now you may notice a disparity that while Gartner is predicting Windows Phone will have a 20% marketshare in 2015, that is a long way from the 37% marketshare it enjoys now.

So now looking at everything in context, the Microsoft marketshare prediction doesn’t seem so far fetched. However what about Apple?

Well, Gartner (& others) are banking on the fact that Apple will repeat their mistakes or maybe not mistakes but rather business preferences from the past. Apple has traditionally always targeted the higher end of the market and with strong controls with their distributor channels enjoyed high margins on their hardware sales. However since the advent of the iPod and later iPhone and iPad, Apple has found itself in the previously unusual position of being the sole market leader or at the very least a large majority player. Generally the organization who holds that position in a competitive consumer electronic market tends to be at a lower price point relying on volume rather than margin for greater profit.

In the Smartphone industry, market penetration globally has not reached anywhere near a majority level and even in mature Western markets there are significant portions of the population just using simple cellular phones. Hence it has been the higher end of the market that has been doing the majority of the purchasing. However the largest growth areas of Smartphones will come from the Developing world and thus lower cost smartphones running an “free” open source operating system (i.e. Android OS) will reign supreme.

So the real prediction Gartner seems to be making here is that Apple will be content to cede the wider market to other players and remain content with the premium end of the market. The interesting part of this is the path of the iPad and the tablet market in general. There is also an implicit prediction in all of this that the swarm of Android tablets, Windows tablets and even WebOS tablets will begin to take charge of that market as they are now with Smartphones.

Let the battle begin…..

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