How Microsoft Blew It in Mobile

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Wired reports: Microsoft Windows continues to dominate the PC market with a 90 percent market-share stronghold, but when it comes to smartphones, Microsoft is getting beat up worse than a mustachioed villain in a Jackie Chan movie.

Windows Mobile has lost nearly a third of its smartphone market share since 2008, research firm Gartner reports. Windows Mobile had 11 percent of the global smartphone market in the third quarter of 2008, according to Gartner, and last quarter Windows Mobile’s market share plummeted to 7.9 percent.

Meanwhile, Apple’s global market share grew from 12.9 percent to 17.1 percent, and Research In Motion saw a rise from 16 percent to 20.8 percent, according to Gartner’s figures.

It’s worth noting that Microsoft got a head start with Windows CE, its pocket-PC OS, in 1996. Windows CE serves as the foundation for the Windows Mobile OS shipping with some smartphones today. The smartphone OS market, in fact, has existed for several years, and Microsoft was an early leader in the space. But only recently have several additional corporations stepped into this space with their own platforms.

Microsoft’s biggest problem? One word: iPhone.

“It was really the iPhone that came out full-bore for a consumer perspective,” said Ross Rubin, an NPD Group consumer technology analyst. “We saw app development focus on consumer applications like social networking and games…. Particularly with Apple’s retail presence and advantages in that market, through design and so forth, that’s where Microsoft’s main challenge lies.”

Many other technology observers agree that Apple receives credit for sparking the smartphone boom. The 2008 introduction of the App Store enabled third-party developers to sell their own software, further enhancing the capabilities of the iPhone. This proved a workable model, giving 40 million iPhone and iPod Touch owners the ability to choose from the now 100,000 apps in the App Store. Meanwhile, some developers earned hundreds of thousands of dollars with hot-selling apps. Even if most developers didn’t earn that much cash, the success stories helped make Apple’s App Store powerfully attractive.

Apple’s blockbuster success with the iPhone and its App Store compelled other tech giants to offer their own mobile platforms and app stores as well. Google, Nokia, Research In Motion, Palm, and others have opened app stores and begun recruiting developers to compete.

But if Microsoft was the first player in this market, why wasn’t the software giant able to replicate the success it had with PCs?

“It was theirs to lose, and they lost it,” said Raven Zachary, a technology analyst and owner of iPhone app development house Small Society. “They had everything they needed to execute, to do the right kinds of carrier deals to create an app store, create visual voice mail, touchscreens, and so on. They’ve been in this space since the beginning.”

To Peter Hoddie, CEO of Kinoma, which develops a mobile media browser for Windows Mobile and other platforms, a major knock against Windows Mobile isn’t the OS itself, but rather the weakness of the bundled apps included with it.

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