By a curiously-timed coincidence, three lines of evidence have combined over the last week to convince me that I have been seriously underestimating Microsoft’s competitive potential in the smartphone market. One is that I actually got my hands on a Windows 7 phone; another is a report from a major market-research outfit that has been reliable in the past; and the third is a revealing report from an informant on the hardware side who I’ll call Deep Chip.
The sporadic reports that Microsoft has achieved something remarkable with its WP7 interface turn out, much to my astonishment, not to be lies. A major, underappreciated strength of the design is that the large, simple, rectangular touch areas turn out to require less dexterity and mental effort to use than the rows of tiny icons on an Android or iOS phone. Mate this to a well-thought out navigation structure and you get a sort of art that conceals art – not flashy, but more effective than a design that focuses more on eye candy. I’m thinking they may actually have stolen a march on Apple here.
Next, we have Android, Windows Phone to rule mobile. IDC’s projection of a 67% compounded annual growth rate over 2011-2015 may seem implausible, but the company points out that Nokia is in a strong position to upsell its Symbian userbase (still a plurality worldwide) into WP7 phones. And IDC has an enviably accurate record in such market projections.
Finally, I’ve received a fascinating report from a source inside a major component vendor. Deep Chip informs me that several major Pacific-Rim electronics manufacturers want Microsoft to break out of its present 2% basement because they fear being stuck in an Android monopsony, a concern which has become more acute as a result of persistent rumors that Google plans to go into the hardware business and produce own-brand phones.
Apple manufactures its own chips, and its relationship with one contractor (Foxconn) is so intimate that the other electronics houses fear having to accept ever-decreasing margins through having no competing buyers. Thus, they’re actually pulling for WP7 demand to rise fast enough to create a vigorous non-Apple, non-Android market for their hardware.
Meanwhile, Microsoft is quietly flexing its muscles. While Google has been unable to prevent premature tablet ports of Android, Microsoft has successfully prevented the carriers from issuing its March WP7 upgrade before it was fully baked. Microsoft’s contention all along has been that Android is chaos and that the carriers would benefit from a more measured and disciplined approach; that argument might be getting some traction.
Between Microsoft, its allied carriers, and the electronics houses, the outlines of a coalition actually capable of surging past iOS and seriously threatening Android seem to be gradually emerging. A little-noticed feature of the Nokia-Windows alliance – the lack of an exclusivity clause on either side – assumes greater significance now. I’m thinking it may turn out that the NoWin deal was a billion-dollar head-fake.