Let's start with quotes from the original article, over at the Boy Genius Report but also (in somewhat traffic-chasing fashion) republished at Yahoo:
The latest Kantar Worldpanel numbers for smartphone market share may not be surprising, but they are grim indeed for Microsoft. In the heart of the Windows empire in the United States, Windows Phone’s market share dropped from 4.7% to 3.6% between May 2013 and May 2014. In Germany, the decline was from 6.2% to 5.9%. In Brazil, the share remained flat at 5.5%. In China, Windows Phone saw a collapse from 3% to 0.6%.
This may seem like just another spring, a season among others. But look closer — we are in fact witnessing the final hope for any meaningful future for Windows Phone being snuffed out.
Let's start with that USA figure. Since when has the USA been the 'heart'(land) for Windows Phone? The USA has been a struggle since the start because of the skewed pricing models there (where the iPhone is king, buoyed up on sky-high monthly contracts). China is also an exception because, again, there's a lot that's different about that market, from economics to technical implementation. The Brazil and Germany data, effectively, show that things haven't changed much in the rest of the world. And for every market where there was a small drop, there are others, not quoted, where there was a small rise. The UK, for example, was up a percentage point, year on year.
Secondly, this is indeed a 'season', a point I'll come back to below.
...All of that helped give Windows Phone 3% to 5% slice of the smartphone market. And now that pitiful toehold is already eroding, washed away by the flood of $100 Android smartphones. There is no coming back from this debacle. The prices of low-end Windows smartphones cannot catch up with Android models — to do so would have taken a rapid climb to at least a 20% share in emerging markets and associated economies of scale. That window of opportunity has now slammed shut.
It's not entirely clear what the writer is comparing here. $100 Android smartphones? Is this in the USA, where $100 phones actually cost $500 and it's the operator subsidising the device? In a more balanced market, like the UK here, where pay-as-you-go is a huge part of the scene, even with network subsidies, any decent Android phones are still £100 or so. The low end £50 devices are complete rubbish in terms of performance and experience. In contrast, the likes of the Nokia Lumia 520 is on pay-as-you-go at £60 and offers (relatively) a much faster UI and better performance all round.
In the U.S. and Germany, the two most important Western smartphone markets, cheapie Androids are also wounding Windows badly.
Ah yes, so it was the USA being written about. But Germany? A 0.3% drop in market share in a growing market qualifies as 'wounding badly'??
But a far deeper injury comes from the inability of Windows handset vendors to exploit the one clear weakness of Apple: The lack of jumbo-display smartphones. Samsung turned phablets into a global craze more than two years ago and Windows had a chance to attack Apple with a strong range of 5-to-6-inch models. It was unable to do so.
The Nokia Lumia 1320 and 1520 have been out for quite a while, so there was indeed an attempt to hit this market. Arguably, Nokia went too far in going straight to 6" screens (with largish bezels, too), though the imminent Lumia 930 at 5" should hit this market head on, albeit a little late to the party.
...This was the spring when Apple was genuinely weak. The new iPhones with large screens are rolling out in the autumn, leaving many consumers unwilling to buy the models with small displays. That’s why Android share in Germany moved from 77.9% to 80.9% over the past year. Apple is now possibly more vulnerable in the smartphone market than it has been since 2008, when it was still shackled by narrow distribution.
I fail to see what Apple has to do with all this analysis. iPhones are a small market of the smartphone market worldwide (way less than 20%) and anyone looking to get an iPhone will get one anyway - for the man in the street, it's about premium brand and image. A would-be iPhone owner will rarely consider a Windows Phone and probably the reverse is true. The far larger Android-owning and feature phone-owning parts of the phone market are where attention should be lavished.
Yet the Windows camp has failed spectacularly to exploit this opening. Germans are nowhere near as fond of Apple as Americans or Brits. It has always been the most likely gateway to Windows Phone’s success in Europe. That year-over-year share decline in Germany from 6.2% to 5.9% is no boring piece of statistics. It is the death knell for the entire Windows Phone project.
Germany is an interesting wobble in the stats, but a wider European view shows the wobble in the other direction.
Moveover, rather than a 'death knell' being sounded, there are several reasons why I think Windows Phone can 'rebound':
- This is indeed part of a season. It's the season before the single biggest update in the OS's history. Windows Phone 8.1 dramatically transforms the OS and its interface, filling in missing holes and bringing some familiarity to people who have played with other smartphone OS. All while, hopefully, retaining the strong suits of Microsoft's next-gen operating system. Windows Phone 8.1 has been 'coming soon' for several months now, but has already shipped in one product (the 630) and is due to hit in the Lumia 930 and via OTA updates to another 100 million smartphones in the next month or so. As I pointed out yesterday, Windows Phone 8.1 is gaining new, vocal fans.
The crucial time for Windows Phone will be the second half of 2014, with 8.1 done and rolled out - how will this affect the market and everyone's perception of the OS? Yes, there are still some mainstream third party applications missing or languishing, but the bundled functionality in each Windows Phone is already almost overwhelming to new users, so it'll be interesting to see how this all plays out across the wider world.
- Microsoft isn't just going to give up on Windows Phone. Or run out of money. It's tied into the company's strategy across desktop, tablet and cloud spaces, and it's all bankrolled by a company as (relatively) rich as Google or Apple. Plus a significant amount of said money is coming from patent royalties from companies making Android handsets/watches/whatever. In fact these sums are increasing, given a bunch of manufacturing patents were acquired with the purchase of Nokia.
- 'Rebound' implies a (worldwide) fall, a term which I don't think is justified. As to success, we've commented at length on what Microsoft's goal is or could be. 10% marketshare across the world still seems achieveable. In a billion-unit smartphone market, 10% is still a lot of devices sold, after all. Moreover, it would be a tightly controlled 10% (Apple-style) while the wider, rather chaotic (skins, forks, AOSP variants, etc.) Android market soaks up by far the largest portion, albeit with much less focus.
Comments welcome, as usual!
Nokia's (Microsoft's) Lumia 930, on which a lot of hopes rest - 8.1, fast, large enough, great camera, great screen, and so on.....!