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Today in 2015: The Big Three rule the smartphone market

This article is a fictional work of my overactive imagination depicting how the smartphone market might appear in 2015.  Don’t count on it turning out this way…

Ah, how time flies!  It feels like only a few months ago that Microsoft announced Windows Phone 7 Series and fans lined around the block for Apple’s iPhone Evolution, yet five whole years have passed since then.  During these telling years the smartphone market has truly evolved.  Vertical platform integration, wider corporate adoption and growth in the tablet market have been kind to Microsoft, Apple and Google at the expense of the RIM, Nokia and Palm.

With the benefit of hindsight it should have seemed obvious that as vertical platform integration improved, the smartphone market would come to resemble what used to be called the desktop computing market.  In the last five years the Microsoft, Google and Apple smartphone platforms developed such successful integration with their desktop siblings that corporates would logically align their end user computing platforms to the corresponding mobile offering.  Chrome OS & Google Apps to Android, Windows to Windows Phone 7 Series and OSX & iPad to iPhone.

Meanwhile the once-strong RIM fell increasingly out of favor with corporates during 2012 and 2013 as Microsoft re-entered the mobile space with its well received Windows Phone 7 Series.  Microsoft successfully marketed the new platform to corporates as a cost conscious work-play device; cheaper to administer than BlackBerry, more appealing to staff due to its Zune, Xbox and social networking features and fully integrated with the Corporate Cloud concept.

At home the tablet market, initially a niche, became better adopted by consumers as they looked to leverage their substantial app investments.  As personal devices grew further in complexity and platform app stores grew in content, consumers chose to leverage their app portfolio by settling on one platform.  Apple led the way with the iPhone/iPad combination, later enhanced by the iPad 13 and the OSX branch of the App Store.  Microsoft followed suit with Windows Phone 7 Series Tablet, which complemented its smartphone platform with screen sizes of up to 12 inches and Android developed in a similar, although less structured, way.  Models such as ‘buy a phone app and get the large screen version for half price’ or vice versa were pervasive by 2012.

Consumers also became weary of learning new smartphone operating systems as each release became ever more complex.  As each of the Big Three came to offer similar functionality with different app portfolios, consumers inevitably wanted to learn one preferred system and stick with it to protect their time investment.

Of course there continue to be enthusiasts and switchers who hop around; that population continues to do so and hopefully always will.  Main Street however has emphatically shown itself to value platform alignment.  These days you’re either a Googler, an iBod or someone who uses Windows stuff…since nobody’s been able to coin an easy term for a Windows Phone 7 Series user.

RIM suffered from both corporate market share erosion and difficulty in convincing consumers with its Storm range and Hurricane (2010 touchscreen slider).  In 2013 it refocused its efforts upon streamlining its messaging backbone to create lower internal throughput cost along with developing cheaper devices.  The gamble has worked well so far for RIM, which has become a mass market player in emerging markets where bandwidth capped data plans are dominant.  Local wireless infrastructures in those markets often struggle to provide messaging reliability on competing smartphone platforms, unlike in today’s developed markets.  RIM has been successful in these developing markets with its reliable messaging system.

The question for RIM now is what the company will offer those markets in 2020, when network reliability is taken for granted and participants become more interested by the vertical platform integration offered by the Big Three.  Perhaps RIM might have benefitted more by building a new OS back in 2010 aimed at the messaging-intensive youth market, which remains dominated by the ever popular Sidekick brand.

By the end of 2010 Palm and Nokia’s respective smartphone market shares in the US were already well in decline from a shaky start.  Nokia never really managed to gain a strong foothold with any major US carrier but continued to be successful as a high volume seller to emerging markets.  These days developed smartphone markets outside of the US are looking increasingly problematic for Nokia as the company’s earlier struggles between Symbian and Maemo left it way behind the Big Three in both OS design and cloud integration.

While Symbian won out in the end within Nokia, the lost time was enough for both Android and Windows Phone 7 Series to overtake Symbian’s market share outside the US.  Meanwhile Palm, which rose from its own ashes in early 2009 with a good product based upon its promising WebOS platform, was ultimately out-muscled by the growth of Android and Windows Phone 7 Series which now share the market with the iPhone.

So the last five years have been a story of vertical platform integration.  Corporates have used it to deliver cost management and employee cloud services while consumers have leveraged it to maximize their app and time investments.  In a way this is similar to the outcome of the desktop OS wars we saw in the 1990s where there was a wide selection of viable platforms.  In those days corporates and consumers used a mix of Windows, OS/2 and Mac amongst others, but in the ensuing years both sectors trended towards consolidation upon just a couple of end-user platforms.  By 2010 that consolidation was emerging in the smartphone market, today it’s largely complete.

Neil Berman

Mar 15, 2010 - Posted by | Analysis | , , , , , , , , , , , , , , , ,


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