Press Release

Reports of Windows Mobile’s Death are Greatly Exaggerated

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Despite intensifying competition and the loss of some high-profile licensees, the usage of Microsoft Corp.’s Windows Mobile operating system in smart phones will nearly triple from 2009 to 2013, allowing it to reclaim the No.-2 position in the global market, according to iSuppli Corp.

In 2013, 67.9 million smart phones will use the Windows Mobile operating system, up from 27.7 million in 2009. This will give Windows Mobile a 15.3 percent share of the global market in 2013, second only to the Symbian operating system, which will control 47.6 percent.

Although Windows Mobile is expected to fall to the No.-3 position in the smart-phone operating system market in 2009, the strong rise in usage will allow it to retake the second-place position it held in 2008 by 2012.

“Windows Mobile is facing a host of challenges, including rising competition from free alternatives like Symbian and Android, the loss of some key licensees and some shortcomings in its user interface,” said Tina Teng, senior wireless communications analyst or iSuppli. “However, Windows Mobile holds some major cards that will allow it to remain a competitive player in the market.”

It Takes a Smart Phone Village
The ace card in Windows Mobile’s hand is ownership of a complete infrastructure essential for the success of a smart-phone operating system.

“The battle over smart-phone software has spread beyond the operating systems,” Teng observed. “To win in today’s environment, a company needs not only an operating system but also device support, an application store, a broad portfolio of applications and support from the developer community. While Windows Mobile is losing some share to competitors in 2009, most of the alternatives cannot match Microsoft’s complete suite of offerings.”

For example, rather than just selling a barebones operating system, Microsoft offers a complete set of services that can assist clients in their customization and software integration efforts. In contrast, OEMs wanting to customize the Symbian and Android operating systems by modifying the user interface or widgets must invest in add-on software.

Licensee Losses
’Microsoft’s recent loss of two licensees—Palm and Motorola—has been cited as a sign of Windows Mobile’s weakness. However, these losses may not be as significant as they might appear.

“Palm never used Microsoft for all of its smart-phone operating system needs, so it never represented a large amount of business for the company,” Teng said. “Furthermore, it was known that Palm was working on its own smart-phone operating system for the Pre. As for Motorola, the company’s shipments and market share in the mobile handset business have been declining in recent years, making it a less significant player.”

Meanwhile, Windows Mobile recently gained another key licensee: LG, the world’s No-3 mobile-phone OEM. LG has pledged to produce 50 Windows Mobile handset models. Even after the loss of Palm and Motorola, Windows Mobile still boasts the largest number of OEM licensees among all smart-phone operating systems, at 14. Symbian is in second place, at 10.

“In terms of licensees, Windows Mobile remains in a very strong position in the smart-phone operating system market,” Teng said.

The Bottom Line
Perhaps the most glaring obstacles faced bv Windows Mobile reside in its own shortcomings. “The Windows Mobile user interface looks poor compared to some of its slicker competitors—particularly Google’s Android and Apple’s iPhone operating system,” Teng noted. “The rigid folder system structure of Windows Mobile can be challenging for users. In addition, Microsoft didn’t update the user interface of Windows Mobile quickly enough, and it was slow to market with the dashboard look.”

Furthermore, the current version of Windows Mobile doesn’t support capacitive touch-screen technology, like the multi-touch screen used in the iPhone. “This represents a major barrier for smart-phone OEMs that would like to produce innovative phones,” Teng said.

Despite the drawbacks, Microsoft is expected to provide a remedy shortly. “Microsoft in 2010 will introduce an updated version of its operating system, Windows Mobile 7, which is expected to sport an enhanced user interface and browser as well as multi-touch control,” Teng predicted. “This will make it much more competitive with the alternatives on the market.”

Meanwhile, Microsoft is expected to release a series of Windows Mobile 6.5 products in October that will feature a fresh-looking honeycomb start screen.

Read More, Severe Competition Among Smart Phones Leads to Consumer Benefits >

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