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Windows Mobile use has plunged in the last year, while Apple's OS X-driven iPhone and RIM's Blackberries have both posted impressive growth.
Microsoft's sales have plunged while competitors Apple and RIM have flourished

Smartphones only recently have risen to sales prominence over more crude cell phone models.  The shift has come largely thanks to more powerful and energy efficient mobile processors, putting unprecedented media, internet, and communications devices in the hands of users.  A year ago, Microsoft looked comfortable in that market, coming off another year of growth and holding a promising 11 percent global marketshare, almost tied with Apple's 12.9 percent and just behind Research in Motion's 16 percent.

The picture became increasingly dismal for Microsoft over the course of 2009, though.  According to market research firm Gartner, Windows Mobile's marketshare now stands at 7.9 percent.  Apparently its competitors ate its lunch as Apple's (OS X) share rose to 17.1 percent and RIM also grew significantly, now at 20.8 percent.

That's disappointing considering that Microsoft was one of the first players to enter the market with its Windows CE, released in 1996, which went on to form the foundation Windows Mobile.  One of the main problems has been the iPhone, which launched in the summer of 2007 and has since seen two compelling hardware updates, the first bumping it up to 3G and the second delivering a faster processor.  States Ross Rubin, an NPD Group consumer technology analyst, "It was really the iPhone that came out full-bore for a consumer perspective.  We saw app development focus on consumer applications like social networking and games.... Particularly with Apple's retail presence and advantages in that market, through design and so forth, that's where Microsoft's main challenge lies."

Raven Zachary, a technology analyst and owner of iPhone app development house Small Society comments on Microsoft's missed opportunity in the smartphone market, "It was theirs to lose and they lost it. They had everything they needed to execute, to do the right kinds of carrier deals to create an app store, create visual voice mail, touchscreens and so on. They've been in this space since the beginning."

One problem has been the segmented hardware.  RIM doesn't overly rely on media to sell; rather it sells itself with a strong suite of proprietary business tools.  Apple, meanwhile has a single basic hardware design (with some variations between its three generations) allowing an App to easily work on any of its phones.  Windows Mobile phones, however, include handsets from HTC, LG, Samsung, and others -- in other words developers have to deal with the headache of creating multiple versions of a single app to reach the entire audience.  At least Microsoft is not alone in this plight -- segmentation has also become an emerging problem for Google's Android OS.

Another problem has been the slow pace of updates.  With the launch of Windows 7, many heard that Windows Mobile 7 was soon forthcoming.  However, Microsoft instead released Windows Mobile 6.5, a stopgap solution. Windows Mobile 7, codenamed "Photon", has been bumped back to 2010.  That delay has caused many buyers to simply not upgrade -- or more likely, pick a Blackberry or iPhone instead.

Microsoft isn't out of the game just yet.  Just as Apple looked to be on its way out of the PC market, but managed a turnaround, Microsoft still can hope to right the ship and dig out a nice niche of marketshare for itself.  Forthcoming proprietary phones may play an important role in that.  However, the trouble signs remain for Microsoft and if doesn't take strong action, it risks losing OS war for good -- in the smartphone market.

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RE: .
By Donovan on 11/20/2009 8:49:16 AM , Rating: 3
I don't think segmentation is a big problem really. A significant part of my work is developing Windows Mobile navigation software and we have a single executable that runs on all phones running WM 2003 or later, with or without a touchscreen. There are some minor issues with how certain GUI controls are handled but they aren't that difficult to deal with. The more serious issues I've encountered are:

1) Networking sucks. They've been using an outdated version of WinInet for years which doesn't allow you to set a sane timeout on the connection, and their Connection Manager is a piece of crap. It is very easy to get into a situation where you absolutely can't get a working connection unless you restart your program (even IE can get stuck like this).

2) While Windows Mobile uses most of the same APIs as desktop, there are a lot of functions that are not implemented. These holes are frustrating when the function you really need is among the missing.

3) Real graphics support has been slow in coming to Windows Mobile. Direct3D is supported in theory, but it is only just beginning to be worth the effort. If Microsoft had pushed for better graphics capabilities sooner there would be more eye candy to compete with iPhone.

4) Microsoft needs to create a new set of controls and window classes for Windows Mobile. As it stands currently, if you want to have a pretty UI like iPhone you have to either license a third-party library or roll your own. Otherwise you are stuck with boring desktop-style controls that are not designed to be tapped with a big, fat finger.

5) The app store came way later than it should have. In the meantime the supposed "unique" IDs developers can use to identify the hardware for registration purposes (Windows Mobile 5 ID, HAL ID, MAC ID, radio serial number, etc.) all manage to have one problem or another that prevent them from being truly unique.

6) Microsoft has been so intent on pushing .NET and C-sharp that they have intentionally created a lot of nifty managed APIs that have no counterpart in native C++. That may not matter much for Windows desktop, but there's a lot more value in using native C++ on Windows Mobile where CPUs are puny and GPUs are non-existent. A Microsoft blog on doing game graphics claimed .NET was around 10% slower than unmanaged code in their tests. It's foolish to penalize developers for wanting maximum performance.

While I have run into some device-specific issues, the real frustrations usually come directly from Microsoft. They really need to step up and stop assuming their position in the market is automatically secure.

"If you can find a PS3 anywhere in North America that's been on shelves for more than five minutes, I'll give you 1,200 bucks for it." -- SCEA President Jack Tretton

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