The smartphone market is quickly maturing. In 2010, already 21% of phones sold (globally) were smartphones and this trend is expected to continue and even accelerate. There are many contestants in this competitive market, but analysts agree that we have two dominant ecosystems: Android from Google and iOS from Apple. Their dominance as ecosystems in the smartphone market is based really on two pillars:
- They ship units in large volumes
- They have many application and service providers offering apps and content for the OS and its associated handsets.
This “duopoly” is not really healthy for anyone, except Google and Apple, and I hope this year 2011 will mark a change. Who are the players that have any chance of making a change to the status quo and for what reasons? In terms of ecosystems, it is safe to say that there are two that will be fighting for the third place: Windows Phone and WebOS.
Last month, we saw how Nokia and Microsoft announced their plans for a deep partnership with the objective of using Windows Phone as the primary smartphone platform for Nokia smartphones. They expressed very clearly that with this, they want Windows Phone to become the third ecosystem. I don’t want to go into details, but in this deal two companies that dearly needed help came together. Windows Phone 7 has not done as magnificent as was expected. Only a handful of manufacturers made some handsets and since the announcement of these, no new handsets have surfaced (though some are now rumoured). It is clear that it needs more push. Nokia is the manufacturer that is supposed to give the necessary scale to this OS.
These two large companies both need this partnership to be a success, so we have to take it very seriously. That being said, we don’t have to expect any results in 2011. Perhaps Nokia announces and even ships one WP handset by the end of the year, but shipments in volume will become a reality only in 2012. In the mean time, we can assume that other manufacturers will take a back seat and see how this partnership plays out and how it will affect them.
Windows Phone does have a few things that will help it become the third ecosystem. As far as I can tell, they are the following:
- The OS has a very distinct look and feel to it and it has been generally well received.
- Microsoft has managed to grow its app catalogue way beyond what can be expected from an OS with the market share that it has. It clearly shows they have the right tools, contacts and marketing dollars to make that happen.
- Microsoft brings content and entertainment to the table with Xbox and Zune integration.
- In theory, Windows Phone smartphones will be produced by multiple manufacturers which should facilitate scale and sales.
- Nokia is very keen on pushing WP to the mid-range and even low-end of the smartphone market, which should help create even more scale.
However, there are also things that are still question marks:
- The current iteration of the OS is very immature. It lacks very basic features in comparison to iOS, Android and WebOS.
- The promised updates are suffering delays, which is even causing the very loyal crow to worry – listen for instance to Paul Thurrott in the last Windows Weekly or Matt Miller on the last Mobile Tech Roundup.
- The OS is only available on smartphones, while the 3 main competing platforms already have a working version on tablets as well.
- Will the Nokia-Microsoft deal affect other manufacturers’ plans regarding WP smartphones? Possibly… If not in the long term, at least in the short term.
In the other corner, we have HP with its WebOS. When WebOS was announced it was received very positively. I have rarely heard anything negative about the OS. A completely different story was the hardware and application/content ecosystem. The purchase of Palm by HP last year gave everybody hope that HP’s resources could help WebOS develop into something truly competitive, as it gave them the scale necessary to develop WebOS and hardware more quickly and spend some more money on marketing the products as well as pushing/convincing developers.
Indeed, it has quite a few things going for itself when it comes to fighting for that spot of third ecosystem:
- As I said, WebOS is an acclaimed OS in terms of usability and feature set.
- They have already “ported” it to tablets, and analysts agree that WebOS is very suitable for the tablet form factor.
- They will be porting it to the PC and in 2012 all HP PC’s will come with WebOS loaded.
- In theory the development environment is pretty good.
However, they still need to work hard on these things…
- The developer story. Palm did not manage to entice big name developers in the same way as Microsoft has. HP, on the other hand, has good relations and I hope they will persuade the big ones to also focus on WebOS. That being said, in the mean time they are swithing from Mojo to Enyo and this switch will take large part of 2011. Until that switch is complete, there is uncertainty as to how to best develop for WebOS.
- Marketing and sales. HP has never been terribly good at selling smartphones. I wonder whether they have the necessary operator relations in order to push WebOS hard. They will also need to accompany that distribution with very aggressive marketing, as they are coming from far and they are competing with the two established players, Android and iOS.
- Product development and management. The past of WebOS products has been plagued with underperforming hardware, scarcity of form factors, not enough push through carriers and large launch windows. Though hopes were that HP could help in this area, I should highlight that despite the Veer, Pre 3 and TouchPad specs being fine for now, when they eventually launch competition will be fierce. Moreover, WebOS is still missing the preferred form factor: the slate form factor.
To be frank, from what I am seeing right now, I feel that 2011 is not the year of the third ecosystem. The fruits of the Nokia/Microsoft deal will not be seen until shipments in large numbers start in 2012 and Microsoft has no real competitive tablet strategy we can even talk about. HP will have trouble selling in large numbers, as they only offer a limited number of devices and they don’t manage to create the buzz/appeal that Apple has. However, should HP manage to execute well in 2011, they’ll have a leg up on Windows Phone, but they have to do very well!
I am afraid, we’ll have wait for 2012 to be able see actual changes.