Some of the researchers behind last year's high expectations for Microsoft's Windows Phone mobile operating system are beginning to dial back their predictions, citing the bring-your-own-device (BYOD) trend as a roadblock in some markets.
Both as a Windows operating system and a late-comer to a market dominated by consumer-focused offerings, Windows Phone 7 is best positioned for the enterprise market, according to analysts from IDC and IHS iSuppli. However, the features that are so appealing to IT administrators may go overlooked by end users making purchasing decisions in the new BYOD world, says IHS senior analyst in wireless communications Wayne Lam.
"We can definitely say that it's no longer a top-down decision. We've gone to a new era in mobility, and especially enterprise mobility, where the end user is definitely having a voice," Lam says. If they see that they can accomplish more because of usability on iOS and Android, they're going to grumble about not being able to use the device they want.
Shortly after Microsoft announced its partnership with Nokia last year, the general consensus was that the deal would launch Windows Phone into the No. 2 spot in the smartphone market by 2015, surpassing all competitors but Google in the process.
By teaming with Nokia, Microsoft gained the manufacturing resources Apple has used to integrate iOS so seamlessly onto its hardware. At the same time, Windows Phone 7's presence on Samsung and HTC devices, among others, gave it the openness and diverse price range that has made Google's Android so successful on a global level. Many agreed the result would be a quick rise to the top.
In January, Lam penned a blog post for IHS iSuppli that called the introduction of the Lumia 900 at the Consumer Electronics Show the start of a "renaissance" for Microsoft and Nokia, projecting Windows Phone to reach 16.7% market share by 2015 and to edge out the 16.6% share forecasted for iOS. IDC made similarly lofty predictions in March 2011, projecting a 67.1% compound annual growth rate for Windows Phone through 2015 that would culminate in a 20.9% market share and a 5.6% lead on Apple.
However, even in the weeks following the official release of the Lumia 900, these expectations have waned a bit. Lam says the firm has "ratcheted back" its claims, now predicting Windows Phone will land in third position, behind iOS and Android. Meanwhile, Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team, says IDC has only slightly lowered its market share expectations to 20.1%, but has also erased the difference separating it from iOS, predicting WP7 to be "pretty much statistically tied with Apple" by 2016.
Much of Microsoft's success is expected to come in global markets, where smartphone penetration is now starting to gain traction, as well as new smartphone customers looking for less expensive options. The current state of enterprise mobility, though, may limit growth in more developed markets where consumers may not be actively pursuing Windows Phone's productivity benefits.
Whereas Lam pointed to Windows Phone 7's ability to integrate with existing Windows systems without "all the extra bells and whistles" of third-party software, Llamas cited other such benefits as security, VPN access and compatibility with Microsoft's cloud-based Office 365 productivity suite as reasons the IT department will welcome WP7 devices with open arms.
"From what I've seen with some of the other Windows Phone devices, we can address some of these questions, and I think it's very much a viable option for enterprise users," Llamas says. "Whether or not it's going to be on a BYOD list or if it's going to be corporate-sponsored, that's going to be up to different companies. But if you just look at the specifications list from what an IT department really likes to have, Windows Phone is going to have it."
For the time being, Lam says the consumerization of IT appears irreversible. The continued decline of BlackBerry, whose subscribers "dropped off a cliff" in the second quarter, and the meteoric rise of Android is evidence that the traditional corporate mobile model is a thing of the past, Lam says.
"Within the framework of enterprise purchasing, I think it is hard to put the genie back in the bottle," Lam says. "Once you start down this path where you can bring in something other than BlackBerry, and there are more compelling platforms and devices out there, it's kind of hard to say 'everybody back to the way it was.'"
While the enterprise cannot return to the days of corporate-driven enterprise mobility, Microsoft and its carrier partners might benefit from trying to do so in the sales process. Llamas pointed to the Lumia 900, which he says is a strong consumer smartphone with an interface and user experience that are comparable to those of the iPhone or many Android devices. But because of its shortcomings, namely the number and quality of applications available for Windows Phone, Llamas says consumers will need to be made aware of its benefits as a tool in the workplace just as well.
"What really needs to happen on the other side is that salespeople at AT&T or Verizon or wherever, they've got to be able to tell that story too. Instead of just saying 'here, let me get you outfitted with the latest smartphone,' go down the road of asking 'do you plan on using this for work?'" Llamas says. "Most consumers will respond rather positively to that because it takes the onus and the actual legwork off of them to go back and have all these actual questions answered."
This is a result of the BYOD trend that may be forcing a shift in the relationship between vendors and customers. In the past, when end users were handed corporate BlackBerry phones, "there was really nothing to worry about," Llamas says. The BlackBerry was used for work and little was questioned because few alternatives were available.
Now that smartphone users have found that consumer devices can be also used for work, vendors will need to show them how they can improve upon that enterprise experience, Llamas says. Windows Phone, as a "hybrid" between Android and BlackBerry, will need to be sold to a different market than its competitors simply because BYOD has changed many smartphone customers' expectations, Llamas says.
"You have a lot of savvy users over there, even if they're feature phone users, who have their expectations as to what a smartphone should do," Llamas says. "The point is, show me how Windows Phone is different."
Colin Neagle covers Microsoft security and network management for Network World. Keep up with his blog: Rated Critical, follow him on Twitter: @ntwrkwrldneagle. Colin's email is firstname.lastname@example.org.
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