Smartphone space now dominated by Windows Mobile

Despite analysts’ predictions to the contrary, Microsoft has come out on top with its latest smartphone software. Symbian sees declining market share as ever more manufacturers switch to Windows Mobile for the best in smartphone functionality and ease of use.

This trend has left Nokia in disarray and denial, while the future of Symbian is in doubt. The catalyst for this turn-about was the ‘super micro-kernel’ developed by Microsoft, allowing a rich, fully featured operating system to run on a relatively inexpensive handset, and still enjoy substantial battery life. That and exponential advances in memory and battery capacities have paved the way for Windows smartphones to become the ‘laptops’ of Generation M – the mobile generation.

At the Consumer Electronics Show in Las Vegas today, a smiling Bill Gates held up the latest fully loaded smartphone from Sony Ericsson and declared: “Microsoft has won the battle for the mobile screen-top.”

ANALYSIS >> SYNTHESIS: How this scenario came to be

Nokia loses the smartphone contest
The birth of Symbian reflected a desire by handset manufacturers not to become beholden to software giant Microsoft for the operating system that would power their new generation smart mobile phones. Just as Palm chose to develop its own operating system for PDAs (and ultimately succumbed to Microsoft’s dominance of the corporate market) this was a strategic decision supported mainly by Nokia. While other manufacturers produced phones with several systems, including Windows on certain models, Nokia rebuffed all approaches from Microsoft, and championed the Symbian cause.

At first this succeeded, with Symbian accounting for over 70% of the smartphone market, mainly due to Nokia’s dominance of the consumer and business professional user market. But in its attempts to make cool, stylish smartphones more and more capable, Nokia strayed from the path of keeping a phone first and foremost a phone. The philosophy of letting the network do the work, and making the handset a simple, reliable access device was lost in the desire to have a better visual interface and more enticing music and video capabilities. This opened the door for Microsoft to counter with a re-vitalized Windows system; one which focused on rock-solid telephony first, but still had all the inter-connects to mail, office and web functions.

Ultimately Microsoft was learning to do things right in the mobile arena, while Nokia lost its original franchise, trying to compete in a field where it had little experience.

Another whammy for Symbian is its inability to rapidly exploit new wireless technologies. The primary difference between a smartphone complete with keyboard and web access and a small laptop is the phone’s ability to make voice calls over standard GSM networks. A broadband-connected laptop needs Skype or a similar voice-over-data program to make calls. Symbian seems to be unable to bridge these two worlds, so much so that Nokia’s new web tablet uses Linux instead of Symbian, and connects by WiFi rather than 3G. It also cannot make calls on cellular networks.

Windows smartphones, on the other hand, can both make conventional calls and take advantage of broadband connections to save on long distance calls over data networks. Windows based devices, both phones and laptops, are better poised to take advantage of WiMAX networks as they emerge.

2004: 3G will set you free
As 3G cellular networks finally begin to roll out globally, Symbian capitalizes on the fact that it has the only smartphones that are 3G capable – from Sony, Motorola and Nokia. The market is by no means sown up, but there are no Windows Mobile offerings with 3G, and GPRS suffers a speed penalty while WiFi eats up battery power and lacks range.

Yet still Windows perseveres, and HP comes to the market with highly capable and sleek iPaq smartphones that have good telephony features and seamless networking to corporate mail servers.

Nokia counters with a slew of announcements for stylish mobile phones that offer everything from internal hard drives to high quality cameras and digital music storage.

2005: Palm Treo plumps for Windows
Facing declining share with its PalmOS Treo smartphones, and competition from Blackberry and others, Palm finally turns to Microsoft for its latest Windows Mobile smartphones. The phones are powered by Intel processors, so this is no great challenge for Microsoft. The Windows Mobile 5 system gets good reviews for solid telephony functions and built in connectivity to corporate systems like Outlook.

According to Gartner, Microsoft has made steady progress with its mobile operating system, and handheld vendors actually shipped more Windows Mobile-powered devices during the most recent quarter than Palm OS-based devices. Sam Bhavnani, senior analyst, said that Microsoft’s ability to link Windows Mobile to its enterprise software, such as Exchange, makes perfect sense for Palm, which has been trying to break into the corporate market for a long time.

With Palm, Dell and HP all sporting Windows, Microsoft eyes the big prize: Nokia. Nokia concedes an inch, licensing Microsoft’s Activesync software for Symbian phones to connect to corporate mail servers, but takes forever to make this technology available to users.

2006: Symbian the new dinosaur
Despite Nokia throwing pots of money at Symbian development, it gradually earns a reputation for being slow, buggy and unsophisticated. Users complain that, although Symbian gives them cool music and video features, it lets you down when you just want to make a simple call.

What’s the use of being able to browse the web, if you can’t even interrupt your browsing to answer a simple text message without a memory error or a non-responsive keypad? It seems Nokia has lost the plot, and doesn’t understand the value of constantly updating the operating system.

Users voice their frustrations on the Symbian Forum.

“The problem for Symbian,” analyst Brian Pellegrini notes, “is that they’re only targeting higher-end phones, which form a tiny part of the market.” ABI Research speculates that only a small percentage of the market will adopt these expensive models.

Sony Ericsson finally releases a Symbian phone with 3G as well as WiFi capability, and decent mail and office integration. But this is one model versus many, and suffers from performance problems, even as Windows phones enjoy maturity and improving stability.

2007: Memory in a flash
The new nano-flash memory modules from Samsung and improved battery technology give the smartphone of today the storage and power of yesteryear’s laptop. Now there are no barriers to running a rich, full suite of functions on a simple smartphone. Coupled with WiMAX and ‘Super 3G’ there are no connection limits either, and the choice of operating system for your phone becomes a moot point. Except for one thing – Microsoft has been doing this for decades, and understands the end-user’s desire for reliable, constantly updated systems that still offer the best integration into corporate mail and data.

“There is also an old-time mind-set among many IT-purchasing departments that branded items work better together,” Bhavnani said. “For example, an enterprise might buy HP PCs, and also HP printers and HP iPaqs, because they all have HP on them and thus ‘work better together.’ The same thing is happening with Windows-based PCs and Windows-based phones.”

This is even more the case as voice-over-data and digital voice converge. Users don’t want to be bothered with the complexity of connecting by different methods to different networks, and the devices that offer seamless roaming from WiFi or WiMAX to 3G or GSM are their first choice.

2008: Windows wins on mobiles
Windows Mobile becomes the leading smartphone system. Sony Ericsson, one of the pioneers with Nokia of the Symbian consortium, follows the market and licenses the Microsoft software for its new range of phones. Only Nokia stubbornly clings to the Symbian system, just as Palm did a decade earlier with PDAs, and sees the same declining trend.

One question remains: Will Apple’s new iFone be the dark horse in this race?

Warning: Hazardous thinking at work

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