The latest comScore US mobile market share numbers came out the other day and it’s not painting a pretty picture for Microsoft, which once again lost ground.
comScore looked at the period from September 11th to December 11th and found that Microsoft dropped 0.9 percent from 5.6 percent to 4.7 percent of US smart phone market share for the period. I’m guessing this is not the trend Microsoft was hoping for.
Windows Phone 7 has had time to mature and find a market, yet it has completely failed to do so to this point. Let’s repeat. It didn’t gain a bit or break even. It actually lost market share. Meanwhile, the guys at the top Google and Apple gained 2.5 percent and 2.2 percent respectively.
Microsoft is still hoping for some lift from Nokia as it releases its Windows phones, but so far it has yet to materialize. If we don’t see some positive movement in the next set of numbers, you have to wonder if Microsoft is ever going to gain any significant market share in the US.
This can’t be making CEO Steve Ballmer and his team very happy as they continue to throw large sums of money at the problem with little to show for it, except continuing to lose ground.
As I mentioned last week in my post, Rim Could Do Worse Than Microsoft, Microsoft may want to rethink its consumer-oriented phone strategy and shoot for the enterprise, which in many instances still screams for a more secure smart phone alternative to iOS and Android.
As badly as Microsoft did in this report, RIM did worse dropping yet another 2 percent of US market share. It’s just plain ugly for that company and it doesn’t seem to be getting better. Yet RIM still has the strength it’s always had — it’s secure server business.
As I wrote before, by bringing RIM’s struggling enterprise business together with Microsoft and its overall strong enterprise business, it could shift the focus from consumer to business and give business and government customers a secure, relatively reliable alternative– and I’m willing to bet there would be a market for that kind of service if it were done well.
Microsoft and RIM haven’t been able to get out of their own way in the US mobile market for some time. Maybe by bringing the two companies together, it would play to each one’s core strengths and give Microsoft a decent market share through its enterprise business.
For now, these latest numbers show how badly these two companies are floundering in the lucrative US smart phone space. Maybe bringing them together would produce something productive. It couldn’t be much worse than how they’ve been doing apart, that’s for sure.
Never mind Nokia, Microsoft, especially its enterprise business, and RIM, could each gain a lot from a partnership.
Even as Blackberry has lost market share in disturbingly large chunks in the US (and increasingly Europe), dropping from a market leader to an also ran in just a couple of years, one thing has remained constant. People see RIM as a secure alternative.
They may not love Blackberry phones compared to iPhones and Android offerings, but if you ask anyone who is serious about security, there’s a good chance they are still using Blackberries whether their users like it or not. It might not be sexy, but the outage last year not withstanding, it has for the most part been a reliable enterprise offering.
That’s why connecting with enterprise service providers who have a solid footing in the enterprise as Microsoft does is a good bet for RIM. For the most part to this point, even though Microsoft is offering its own phone OS–Windows Phone 7–it seems to be aimed squarely at the consumer market.
Microsoft and RIM together create a secure, enterprise mobile powerhouse. Microsoft could even buy RIM and just fold its mobile server technology directly into the Microsoft family. Given the partnership like the one the two companies have now it makes so much sense. And it could continue to sell handsets for as long as the market demanded it, while offering the same services on Windows phones, making them all the more enterprise friendly.
I wrote a post last summer, how my sister-in-law who works for the Australian government carries two phones. She has an iPhone for personal use, but all work correspondence gets done on the Blackberry. When I asked her why, she said it was because it was so much more secure and people were trying to hack the government servers on a regular basis (much as they are likely trying to hack your company’s servers).
As we’ve learned, no system is fool-proof, and RIM is no exception, but in a world where users are increasingly bringing their own devices, if you have a facility that requires more secure access, RIM is still a great bet.
RIM has a new CEO, which is a step in the right direction, but it still needs to pull off a dramatic turn-around to come back and be a player in the market. Perhaps its servers are the key to its survival, much more than the phones and tablets it has produced in recent years, and maybe it needs more enterprise partnerships like the one it just announced with Microsoft — or even better, become Redmond’s Canadian mobile enterprise affiliate and be done with it.
If you didn’t know by now that companies like Facebook and Google were keeping tabs on you and your company you’re probably naive, or you failed to notice the ads that appear next to your content, which somehow relate to what you’ve been doing.
For Google users, that’s about to get a tad more creepy. Let’s say you searched for Sting’s concert schedule on Google. You might find that you get a suggestion for a Sting video on YouTube, and as Gizmodo pointed out that kind of cross-service pollination has never happened before.
It’s disconcerting, but get ready for it because from a business perspective, it’s a double-edged sword. On one hand, you too can take advantage of the growing ability to analyze data and serve increasingly customized content on your company’s web site, but as cloud service users, it could raise the paranoia level a few notches when it comes to protecting your company’s private data while using cloud service.
And if you are collecting data, the EU might have just thrown a wrench in your data collection because under proposed new rules, if you have a breach, you would have to notify the appropriate government officials and every individual affected (think of the 24 million that were affected by the recent Zappos breach if you want to see how daunting this could be). Businesses are already complaining about the pressure this would put on them while trying to deal with a breach.
And Businessweek reports, the consequences for failing to comply could be quite costly involving a fine as large as 2 percent of sales, a number that’s sure to get anyone’s attention.
Meanwhile, the right to be forgotten component could pose the biggest challenge of all as individuals could request to be removed completely from your database, or that you fix what the individual considers to be wrong information. The implications for a business to keep up with these requests could be overwhelming and could prove difficult if not impossible to do. Can you guarantee that every mention of this individual is gone across your entire system?
On one hand it puts the whole idea of data gathering into question, something that many cloud services do. On the other hand, it might make you want to think about which cloud services you’re using. Google is clearly rewriting the rules here and it could have some impact on individuals and businesses and how they use Google’s services.
Whatever you think of Google’s new policy or the EU’s proposed rules, we clearly have a monumental clash between data gathering capability, and what services can do with that data, and the desire for privacy. And this is all against the backdrop of a growing cloud business model.
Like I said, we certainly live in interesting times, don’t we? The problem is that we have to sort all of this out and it’s not going to be simple to reconcile.
And that’s just for starters.
Let’s look at the mobile numbers in Apple’s own words:
- The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter.
- Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter.
And that’s just the mobile story. It’s inherently clear that Apple’s mobile strategy is working. Even with competition all around it from Android phones and the Kindle Fire tablet, nothing slowed down the Cupertino juggernaut. To call it extraordinary doesn’t begin to describe how well Apple did.
Oh and by the way the company is sitting on $90 billion in cash.
As we watch Apple rake in the cash, it’s probably worth noting a couple of negatives here. Apple appears to be making money on the backs of exploited Chinese workers. What’s more it tried to sue competitors out of the market, even though it’s clear that the market loves it and it can clearly compete on its own merit.
Heck, Chinese consumers were so hot for the iPhone, they rioted when it sold out, prompting Tim Cook to say (in perhaps the understatement of the year so far), that they didn’t bet high enough on the Chinese market.
As we covered recently, an IDG study found that the iPad was making big inroads inside the enterprise and a new Cisco study confirms this. As Apple makes the transition to the enterprise market and at the same time begins to grow an Asian market, it’s no wonder that Apple is a company that appears to have a license to print money.
The Cisco study found demand is growing in the enterprise (although it varies fairly dramatically by country). In the US for instance, which leads the way in this regard, the report stated that 38 percent of executives have been issued an iPad. That probably doesn’t tell the whole story though because there are very likely many who never asked IT, and just bought one without IT’s knowledge.
From a practical standpoint as you would expect, the Cisco study found that IT worries about security and they want to see more custom apps — no surprises there.
From an IT perspective in spite of these numbers, it would be unwise to think of mobile as a one-horse race. As remarkable as Apple’s quarter has proven to be, there are other mobile players out there and you have to keep your eye firmly on all of them — all superlatives aside.
When I attended CeBIT last year in Germany I was struck by how paranoid most locals seemed to be about cloud computing in general. More specifically they were concerned about the impact of the Patriot Act on storing information on US servers.
And the concern over the legal issues around storage are certainly legitimate ones, but beyond mere security and privacy, this seems to me to be more of a fight over market share. One of the companies that wants a big piece of the European action is France Telecom, which is one of the companies pushing for more European control of the cloud.
But when you read comments from France Telecom’s cloud services point man, Jean- Francois Audenard, it sounds much more like a protectionist argument than a philosophical one:
“It’s extremely important to have the governments of Europe take care of this issue because if all the data of enterprises were going to be under the control of the U.S., it’s not really good for the future of the European people,” Audenard told Bloomberg.
While I can understand the desire to protect privacy and that Europe has a very different notion of privacy than the US, the EU has to be careful that it doesn’t shut out US companies unfairly. In fact, GigaOM reports US cloud companies recognize this as a strategic threat to their markets and have been pushing the US government to support treaties that would allow for the freer flow of data across borders. But as GigaOM points out, this is easier said than done given the long reach of the Patriot Act.
For now though, Bloomberg reported that American companies like Google are still making big deals in Europe, even as Europe tries to change the rules to favor European countries. In November, the New York Times reported on new tougher privacy regulations that will be going into effect this year that could make it even tougher for US companies doing business there.
Meanwhile the US Congress debates the Stop Online Piracy Act and the Protect IP Act while I’m sure the Europeans watch aghast at the prospect of US law that would give the US government the power to shut down foreign web sites over piracy concerns using a US court order.
This could shape up into a digital war over how data moves across borders and web site sovereignty with very dangerous implications.
And none of this would be good for cloud computing or eCommerce or Web business in general. That’s why it’s important to lobby your leaders and find ways to reduce the tension and find ways to make it easier to do business on the Internet. It’s all well and good to say laws and regulations should be friendly to business, it’s another entirely to know when to stay out of the way. The US Congress has obviously not learned that yet and the EU is looking to counter that with its own policies.
It’s time to step back and let information flow freely before we kill the golden goose.
The survey write-up which was compiled from phone interviews and research from a variety of sources found that professionals from virtually ever region are using the iPad in larger numbers than anyone might have imagined if these conclusions are to be believed.
First of all, IT is using iPads in a big way with 51 percent reporting they “always” use it at work and another 41 percent saying they “sometimes” used it at work. That’s a significant number of IT users saying that the iPad is an important device to them.
Not surprising, whether business pros or from IT, users say they use the iPad mostly for content consumption with web browsing (79 percent), reading (76 percent) and news consumption (73 percent) representing the clear usage leaders. Work communication followed at 54 percent and somewhat suprisingly social media trailed at 44 percent.
I’m also seeing ipad usage in a business context in real-world observations. For instance, increasingly at conferences I see many iPads, even for note-taking at sessions. Personally, I still carry a light-weight PC (11 inch Mac Book Air) for the road because I find having a full physical keyboard is important to me, but for most users taking casual notes, the virtual keyboard is sufficient in this scenario.
I’m also seeing the iPad at work in other scenarios. Marketers and sales people love the iPad as a demonstration device. It provides a light-weight, attractive and engaging way to present content to people without the device getting in the way of the conversation as a laptop might.
What’s more, I noted the last time I was in the Apple Store that Apple is using iPads as product brochures on the floor. You walk up to the latest iPod Touch or other device and you can read about the specs on the iPad adjacent to it. It’s a clever way to use its own products in a promotional fashion.
One thing that surprised me about the survey was how much the iPad had penetrated business nearly universally across the world. Perhaps the most astonishing data point to me was that Africa and South America reported the highest use of iPad in business with 70 percent, which was 3 points higher than the US and 10 points higher than Europe. The lowest reported usage was in Asia with 33 percent.
And in what has to be bad news for iPad competitors, users reported a high a sense of satisfaction with the device. In fact, only 17 percent reported they would consider a different device in the future. That shows that once Apple captures a user, it’s very difficult for the competition to get him or her away.
While I see the iPad as the ultimate media consumption device, the fact that so many are using it at work where other devices are available is a surprise to me, but if this survey is even close to accurate, not only your business users probably own one, quite a few folks in IT do too — and that’s probably the most impressive revelation of all in the report. And you absolutely need to be paying attention to this.
That’s why the recent defense authorization bill included clear guidelines for cost cutting. As a post on Internet Evolution pointed out while most of the attention on the bill involved the indefinite detention provision, there was more to the bill than that controversial component.
In fact, it included provisions that requires plans for data center consolidation, cloud computing and desktop virutalization. Now as it turns out, Congress is just the tail wagging the dog, because the DoD has been way ahead of it in this type of planning.
FierceGovernmentIT reported last month that the DoD was well along to the planning path when it came to consolidation and that included plans for much of what this legislation dictated.
That’s great of course because if the DoD can save billions by moving to the cloud and consolidating data centers that’s going to save all of us, the tax payers, money. But there’s a bigger lesson here than for Enterprise IT.
Now I know the Congress is an easy target, but if even they can figure out that you can squeeze cost savings through consolidation, then maybe it’s something you should be looking at in the private enterprise.
The fact is though that if you are big organization with data centers spread out across the world, you too might be looking for ways to reduce the real estate, the maintenance costs, the cooling bills and so forth that go with running large data centers, and the US government could be a model for you in your approach.
When Vivek Kundra came on board as the US CIO in March 2009, he started the government on this path to consolidation, seeing the cloud and virtualization as a way to cut the cost of running IT in the government. One of those ways was to shut down some of the data centers.
You might want to be thinking about this too. At the very least look at the public plans that the DoD and the Office of Management and Budget has put together. Perhaps you can learn from them and put your tax dollars to work for your organization.
I won’t guarantee those cost savings of course, because how much or even whether you actually save money by going to the cloud is subject to debate, but you can use the Federal government as a lab of sorts. Watch what they do. The goals are ambitious and will be implemented in fairly short order (especially when considering this is the government we are talking about).
So take advantage of this and see where it takes them. You might find there’s something in these moves and your company can learn from that. You would be foolish to ignore it.
I couldn’t help but notice several article trumpeting how wonderful Windows Phone 7 is recently. Beginning with this one in the New York Times, Microsoft Defying Image Has a Design Gem in Windows Phone. The Financial Times of London added to the Windows Phone 7 love fest with the head, Nokia’s Mango-powered Lumia 710 deserves to succeed.
I was particularly taken by the wording of the title in the FT.com. Really? It deserves it? Based on merit or because it’s just high time Microsoft had a winner in mobile or what?
As a lover of trends, I also couldn’t help but observe this Microsoft love was accompanied by stories like this one in Informationweek, Apple’s Cool Factor Waning? It had to be enough to have Microsoft’s PR staff rubbing their hands with delight at such a news convergence. Suddenly Apple’s losing its cool and Microsoft is so deserving of positive attention.
This idea of Apple losing its cool sounds familiar, doesn’t it? It should because I wrote about it just last month coming directly from the mouth of a Nokia executive. In my post, Nokia and Microsoft Struggle to Find Clear Message, I included a quote from a Pocket-Lint interview (which itself included the provocative headline: Nokia: Youths are Fed up With iPhones and Baffled by Android.). Here’s the Pocket-Lint quote from Nokia executive, Niels Munksgaard:
“What we see is that youth are pretty much fed up with iPhones. Everyone has the iPhone,” he said. “Also, many are not happy with the complexity of Android and the lack of security. So we do increasingly see that the youth that wants to be on the cutting edge and try something new are turning to the Windows phone platform.”
Starting to see that we have quotes, then we have stories that seem to mirror the quotes? And we have stories declaring the goodness that is Windows Phone 7.
What we have is what appears to be an orchestrated campaign to convince the public that Windows Phone 7 is really cool and that Apple, well, it used to be, but it isn’t anymore. As for Android, <whispers>, it’s open source, and that’s, you know, a bit messy and confusing.
It may very well be that Windows Phone 7 phones are great phones. I’m not suggesting they are or they are not, but when you see the tech press gushing this way, it may be time to step back and try to separate the hype from reality.
Right now that’s difficult to do, but if Windows Phone 7 phones — and remember there are going to be many of them with varying quality — are deserving, the market will determine that soon enough without help from the Microsoft hype machine.
Whatever Microsoft and its partners spend, they need to produce quality, compelling ad campaigns that makes people stand up and take notice. There has to be a reason for looking beyond the obvious Android and Apple choices. While Apple and Google have a way of creating interesting ads, Microsoft always seems to miss the mark.
If Microsoft, Nokia and other partners want these phones to succeed, they have to find a way to make them cool. Advertising alone won’t work of course, but it’s certainly a traditional starting point for building brand awareness.
Whatever the total ad budget, it’s clear Microsoft is in a spending mood, but it also needs to find ways to promote these phones any way it can. If you’re a Hawaii Five-0 fan, you’ve probably seen Windows Phone 7 phones used in cool ways on the show (along with other Microsoft products). Microsoft should definitely be doing more of that. Product placement in popular shows and movies is always a good bet.
What Microsoft doesn’t want to do is follow in the foot steps of its previous failed ad campaigns.
Back in 2008, when Vista sales were flagging, Microsoft decided to hire a fancy ad agency with a $300 million budget. It recruited 90s TV star Jerry Seinfeld as a spokesperson and teamed him with Bill Gates. It was a disaster. (Watch for yourself if you dare).
What I found was frankly shocking; an ad so brittle, so horrible, so not funny; it was actually puzzling. A true ‘What were they thinking?’ moment.
Microsoft wisely pulled the plug on these clunkers after just two commercials.
Microsoft has to do much better than these previous attempts or it will be tossing money down the toilet, but more than producing good ads — although that’s a good first step — Windows Phone 7 needs to be on great phones.
One of the reasons the Apple and Google ads work is they show the companies’ products in the best possible light often with a sense of humor or whimsy. The music fits well with the ads. They seem natural and care-free and they produce a feeling that makes you want to try them.
In addition, to the ads Beta News reports that AT&T will give the phone “hero” status, which means, according to the article, “AT&T itself will promote the device in its advertising, through its retail channels and direct store associates to push the device within its stores.” That should help too.
But it’s not just consumers, Microsoft should be trying to convince businesses that Microsoft provides a good platform for building phone applications for your business. With a huge hole in the US market left by RIM, there is a need for a more business-oriented phone, one that is not trumpeting the availability of Angry Birds.
Google and Apple are firmly entrenched in the top two market positions, but Microsoft can make some headway if it plays its cards right. There are probably few mobile chances left for Redmond and it needs to be sure it gets it right this time, but the ads need to be more than a fluffy cover for a bad product, they need to communicate the greatness of a quality product. Otherwise, it’s throwing good money after bad — again.
In his speech at the Mobile World Congress in the Fall of 2010 when Steve Ballmer announced Windows Phone 7, he struck an optimistic tone saying he believed that Microsoft had a chance to have a “major impact on the market.”
Unfortunately, early on Microsoft has had almost no impact. According to numbers released by NPD, through the end of October 2011, Windows Phone 7 accounted for just 2 percent of US smart phone sales more than a year after it debuted.
But Microsoft began making some moves last spring. The biggest one of course was to align itself with Nokia. While Nokia also bled markeshare as it shut down Symbian and geared up for Windows Phone 7 phones, it also represented a potentially big market for Windows Phone 7.
Meanwhile, Microsoft began to build its app ecosystem and PC World reports just recently, Microsoft surpassed 50,000 apps in the App Store. Sounds good, but it’s still way behind Android and iOS, but as the PC World article points out, Microsoft includes many popular apps as part of the standard operating system offering and you can get just about any major title (think Angry Birds) across all three platforms.
At this point, Apple and Google are so far ahead that it’s unrealistic to think Microsoft could catch either one any time soon, but a more practical target might be RIM, which according to NPD had 10 percent of US marketshare at the end October. RIM has been stumbling backwards since 2009 and it might be a good marketshare goal for Microsoft for 2012.
But it’s going to take a lot of factors coming together. First of all, Nokia (and others) need to produce really nice phones. Microsoft has to make sure the OS is rock solid and there are no glitches on upgrades or anywhere else along the line. Everything needs to work smoothly.
Next, Microsoft has to change public perception around Microsoft products and services. It’s not going to help matters, when you have major thought leaders like Robert Scoble writing that Microsoft was losing the Apps battle, and to him apps were central to the mobile experience.
Scoble also emphasized that Microsoft had to find a way to convince consumers it was a solid safe choice or it would continue to struggle to find marketshare.
It’s hard to argue with that, but Microsoft has a golden opportunity to grab a respectable amount of marketshare. If it can get 10 percent, it will be solidly ensconced in third place, not bad for a company that couldn’t break 2 percent of marketshare this year.
And if push comes to shove, perhaps Microsoft will buy RIM and get its marketshare boost the old fashioned way — by purchasing it. Whatever happens, it’s clear 2012 is a big year for Microsoft and it has a chance to make something happen — if it can just seize the moment.