Seems like just a few years ago you were either number one - or done. Now, there seems to be room to roam. And that may indicate exactly the reason for the change. Mobile - and the larger issue of mobility - has created a more competitive landscape in which slices of a very large and fast growing market can add up to real opportunity and real money.
As the following article points out, once you get locked into someone's financial and operational eco-system, the hassle of switching tends to build what was once called loyalty. The notion of prisoners' identifying with their captors may be more apt but the affect is similar. This may actually work to the advantage of Microsoft and its junior partner, Nokia. It may also benefit The Company Formerly Known as RIM. Blackberry, as it is now called, sensibly, in line with its best known product won the hearts and minds of corporate IT officers years ago. Many would prefer to transfer to the updated products rather than force the retraining and cost on already beleaguered employees.
Taking significant share from either Apple or the Google-Samsung Android death-star seems unlikely. But it appears that a handsome living can be made from the leftovers. JL
Jessi Hempel reports in Fortune:
In the past two years the half-dozen contenders in the crucial American smartphone market have dwindled to just two. Google's Android phones and Apple's iPhones command 89% of the market, according to Comscore, up from 51% two years ago. Some would-be competitors like Nokia's Symbian and HP's Palm webOS have been abandoned. "It comes down to a battle between Microsoft (MSFT) and RIM for that third spot," explains Forrester analyst Charles Golvin. "Any spot beyond No. 3 doesn't matter." How did two of tech's most powerful companies suddenly find themselves scuffling for table scraps? The smartphone world shifted. Consumers once bought phones with the fanciest hardware; now they care more about software and browsing the web. They gravitate toward devices with the most popular apps. Developers with limited resources, in turn, focus on the platforms most likely to bring them users -- and profits.
Consumers are also increasingly finding themselves locked into one company's ecosystem, and the cost of switching is high. An iPhone user, for instance, can easily share material with an iPad or Apple TV. Likewise, Android-powered phones integrate effortlessly with Gmail, Google Maps, and the Siri-like Google Now. But, either by design or by circumstance, they are not often interoperable. (In January, Google admitted it was blocking Microsoft Windows Phone 8 owners from accessing Google Maps.) For this reason, many analysts wonder if there is even room for a third operating system.
To compete, Microsoft announced a strategic partnership with Nokia (NOK) in early 2011. Nokia agreed to adopt Windows Phone as its primary smartphone platform. The two share development and marketing resources, and Nokia abandoned Symbian. Last fall the companies introduced the Lumia 920, which runs on Microsoft's latest software, Windows 8. (Like Google, Microsoft also makes Windows Phone software available broadly to the likes of Samsung and HTC.) But while Microsoft CEO Steve Ballmer said initial Windows devices had sold out in many places, the company's 3% share in the U.S. hasn't budged.
Meanwhile, RIM has seen its market share drop to just 7% from 34% two years ago. (Before the iPhone came along in 2007, it owned 50% of the market.) To be successful, the company will need to woo back deserters and win new customers without alienating BlackBerry diehards. Leaked plans show a pair of devices -- one with the traditional BlackBerry keyboard and another with a touchscreen. The operating system itself has been rebuilt from scratch. This offers a window into CEO Thorsten Heins's plans. He has said that BlackBerry 10 is meant not just to be a smartphone but a fresh start for the troubled firm.
To make inroads in the current market, RIM is betting that chief information officers, long its biggest customers, still have considerable influence over the devices their employees carry. Microsoft, meanwhile, has committed hundreds of millions of dollars in promotional spending to lure would-be customers.
Both companies have another advantage: heavyweight backers. Carriers, app developers, and other partners are rooting for the rise of a credible third player. A representative from a carrier, who declined to be identified, puts it this way: "Having just two players becomes polarizing, and then they become entrenched. You need a strong third to be able to have that choice and innovation." In other words, no one wants Apple and Google to call all the shots.
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