Windows 8, BlackBerry 10 Won't Win Any Smartphone Wars

Windows 8, BlackBerry 10 Won't Win Any Smartphone Wars
A BlackBerry 10 smartphone prototype at the BlackBerry Jam Asia developer conference in Bangkok on Nov. 29, 2012
Photograph by Brent Lewin/Bloomberg

Today’s smartphone industry stands at an interesting juncture. In 2007, Apple’s iPhone practically invented—or re-invented, if you will—the current smartphone age, with a full capacitive touchscreen and support for mobile apps. Google Android followed in 2008 and, although it was slow to catch up, is now relatively on par with iOS in terms of usability and app support.

Can Microsoft and RIM succeed where others have failed?

The incumbents—Apple and Google’s Android partners—accounted for 89.9 percent of smartphone sales as of the third quarter of 2012, per IDC. Some alternative platforms, such as Palm’s webOS and Nokia’s Maemo software, entered the market, only to disappoint and disappear: WebOS is now an open-source platform and Maemo became MeeGo, which Nokia abandoned when it chose to use Microsoft’s Windows Phone software. Windows Phone has been around for two years, but it has relatively little in the way of sales to show for it.

With Windows Phone 8, however, Microsoft now has its best chance for success. It appears that Research In Motion’s BlackBerry 10 system, which will be unveiled on Jan. 30, is RIM’s last-ditch effort at relevance as well. I’ve used, and I like using, Windows Phone 8. I also like what I’ve seen from RIM as it has shared limited details of BlackBerry 10. But I’m unlikely to switch platforms now. And based on the timing of these two products, I expect many current smartphone owners to avoid switching, too.

What can a new smartphone platform offer?

My first reason for thinking negatively is the maturity of current smartphone platforms. After five years in the current era, all the heavy lifting is done. The biggest platform breakthroughs have been made. Put another way, all the recent incremental upgrades to iOS and Android are just that: incremental. The pace of change for a native smartphone operating system has slowed, and the changes themselves are mainly small features or minor user-interface tweaks.

It’s always nice to have more options, for sure. And in my opinion, some native smartphone features are better on Windows Phone than on Android or iOS. The People Hub in Windows Phone, for example, makes it easy to see all your contacts, their social status, updates, and photos. While the approach is sound—perhaps better than contact management on the alternatives—users could always add Facebook sync to their phones for a similar experience. So the value of the People Hub is diminished for purposes of comparison.

And while RIM employees I’ve spoken with tell me that the BlackBerry fan base is excited by BlackBerry 10, nobody at RIM responds directly when I ask: “Yes, but what feature(s) will broaden the BlackBerry base, which has been shrinking over time?”

Consumers are investing in platforms, not hardware

I’ve been saying this for months, if not years: The battle for smartphone dollars is only partially won or lost by the hardware itself. The longer handset owners stick with one platform, the more they invest in content and apps that work only with that platform. This lock-in cost—something I mused about more than two years ago—poses a potential barrier to switching. Those who invested early in a platform, as much as four or five years ago, are highly unlikely to switch. Who wants to re-buy premium apps, books, videos, and other content?

Microsoft has more of a platform play than Research in Motion does. Between Windows 8 and its Xbox Live service, Microsoft has a wide range of support for music, videos, games, and more. So far, however, that platform strength hasn’t equated to Windows Phone sales. Microsoft’s Xbox 360 has the been the best-selling console for 23 consecutive months. Total lifetime unit sales hit 70 million as of Microsoft’s most recent fiscal quarter. Still, Windows Phone shipments in the third quarter of this year are estimated to reach 3.6 million handsets. Put this in perspective: Some 1.3 million Android devices are activated each day. And Apple just sold 2 million iPhone 5 handsets in China during the past weekend.

Maybe there won’t be a third horse in this race, after all

Barring a major smartphone advance by Microsoft or RIM, neither appears poised to become a third horse in smartphones, at least when it comes to smartphone switchers. Bad timing and prior consumer investment are sure to hold back both platforms, at least in areas where smartphone penetration has already reached the tipping point. Could either do well in other regions?

Yes, but the upside appears limited, in my opinion. Even in areas whose smartphone population is low, both platforms are competing against low-priced, but still capable, Android handsets or older and less expensive iPhone models. Even so, I think the idea of offering a low-cost device to first-time smartphone buyers—exactly what Nokia is doing with its Lumia 620—is a smart play at this point. That strategy may not get you or me to switch platforms, but it could rack up sales to first-timers.

Whether you currently own a smartphone or still use an old feature phone, I’m curious about your thoughts: What would it take for you to switch to—or initially start—with Windows Phone 8 or BlackBerry 10?

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