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« Time For 2016 Total Mobile Numbers: The update to my most popular blog article in any year | Main | USA Election Update for mid-May: The Summer Doldrums for Trump and Hillary »

May 13, 2016

Comments

Abdul Muis

http://qz.com/683496/google-was-seriously-afraid-microsoft-would-dominate-the-smartphone-market/

"Palm is dying, RIM [Blackberry] is a one-trick pony, and while Symbian [a closed operating system] is growing market share it’s becoming a Nokia only solution.”"

Tomi T Ahonen

Hi Abdul

Haha well, yeah. This blog has been by far the most accurate forecaster of the handset wars and Windows was never in contention to dominate the smartphone OS wars because of their monopolistic arrogance. It was always going to be a more handset-maker-friendly (and ecosystem-friendly) OS that had the majority, either Symbian before, or Android now. Windows peaked at 12% and that was ten years ago. It hasn't been above 5% in this decade. If some at Google were afraid, they have grown long since past that fear haha. Its no secret they regularly read this blog and use me often as one of their consultants to teach their advertisers about mobile so yeah, Google hasn't been afraid of a Windows dominance in smartphones for quite a long while haha... Funny still seeing those old names, Palm haha, another hopeless proprietary OS that was never going to win over the world..

Tomi Ahonen :-)

Per "wertigon" Ekström

Tomi, I think you forgot to update your OS marketshare numbers... :)

Tomi T Ahonen

Per?

Thanks. But sorry I don't see it. The three-sentence mini paragraph has current OS stats ie 84% Android, 15% iOS. And Installed Base OS shares are not changed from Q4 its still Android 79% and iOS 19%. Did you mean something else or maybe I wasn't clear enough?

Tomi Ahonen :-)

Abdul Muis

@Tomi

The reason I post it because I think that statement is funny. I don't know if it's true or not that at that time Google really think Microsoft were a threat.

Abdul Muis

@Tomi

http://www.bidnessetc.com/68824-apple-aapl-attracting-fewer-time-smartphone-buyers-bernstein/

"Mr. Sacconaghi notes that this estimate is consistent with the firm’s view that on average, users upgrade their iPhones after every 2.5 years, and that there is a used-iPhone market that perhaps extends the installed base of phones by an additional half to three-quarters of a year."

I was wondering what you think of this statement? I found this perplexing. Is it really true that the used-iPhone market only add additional 6-9 months? So, the average poor user who bought the second hand phone on average only use it for 6-9 months?

Tomi T Ahonen

Hi Abdul

Good question. No, the math is reasonably close to what I have. This is what happens. The MOST popular used iPhones are current models. So some who bought an iPhone early, get a newer smartphone within a year. And MOST of those first iPhones end up back in circulation - to family members or sold on or returned to the dealer for upgrade/replacement deal etc. They may be 9-12 months old, they get another 2-3 years of life still. THEN come the 1 year old and 1.5 year and 2 year old iPhones replaced when contract periods run out or on a replacement cycle that owner wants - many addicted rich people simply want the latest model of whatever smartphone then use - EVERY YEAR. Replacing it immediately. Again, most of those then still get back into circulation (but less than the first set, this is not near 100%) and they get another 2-3 years. Then we get the BUYERS. If they get a nearly-new iPhone, it costs quite a lot, it is very little used, it has a lot of life left including its battery is still very strong etc.. It likely gets used for a long time (another 2 years or more, and may well be resold when old) but those iPhones 3 years old, they are sold at FAR lower prices used, they show a lot of wear and they may develop problems due to age including battery etc. And they tend to have a shorter life in their second (and if one has, also in the third) owner pocket.

Because there are LESS devices out of total manufactured original run, that end up being used second, the math means, they add less. Original set say 100 million iPhones sold (year 2011 was 93M) so if they live 2.5 years, that is mathematically 2.5 years of average life. BUT if then only half are re-sold, 50 million, and those live on for another year - that means 50 million at 12 months or equal to the original 100 million living for an average of only half that, 6 months more. The older the phone is, the less of its original run is still in operation, then even we say half of them are sold again, and 25 million are kept for one more YEAR, it only adds 3 months (one quarter of 100 million original units counted now) to the total lifespan. The thinking by Sacconaghi is very valid and my math is built to include those aspects but my specific numbers are a bit different haha, but in rough terms yes, very valid.

Tomi Ahonen :-)

cornelius

Hi Tomi, Windows Phone market share was under 1% but can you please provide a more precise estimation? If you had to give a 0.x% what would x be in your opinion?

Abdul Muis

@Tomi

"The older the phone is, the less of its original run is still in operation, then even we say half of them are sold again, and 25 million are kept for one more YEAR, it only adds 3 months (one quarter of 100 million original units counted now) to the total lifespan."

Crystal clear.

Barney

@Abdul:

"I don't know if it's true or not that at that time Google really think Microsoft were a threat."

Remember, that was before Android existed. Looking at the market now it is clear that in the last 10 years the only OS that had enough marketing potential behind it was Windows Phone.

In other words: Without a serious competitor it would have grabbed the market, not because it was a good product but because there was nobody capable of fighting it.

Of course now we see that the only way to push an inferior system into the market is if there is a vacuum that can be filled. By developing Android Google made sure that no such vacuum ever existed.
Which ultimately means that the strategy accomplished what it was set out to do - no matter what some of the Apple-tards are babbling about profits.

Per "wertigon" Ekström

@Tomi: Ah, my bad then, I mistook the installed table for the Q1 Smartphone OS share table. Sorry! :)

Tomi T Ahonen

Hi cornelius

Well, Lumia sold 2.3M units so thats 0.7%. All other Windows OS phones by the lilliputs are not even 100K in tot.. thats your rough number haha. Last four quarters Lumia want 2.4%, 1.6%, 1.1% and 0.7%. Wanna guess what its now haha...

Tomi Ahonen :-)

Wayne Borean


@Abdul,

Google was well aware of the Microsoft memo titled 'Roadkill on the Information Highway' and that Microsoft wanted to replicate in mobile its desktop success. Google had good reason to be worried, based on what they knew at the time about how Microsoft handled competitors.

Tomi T Ahonen

Hi Abdul, Barney and Wayne

Let me just clarify. I would not be surprised if anyone on the West Coast wasn't seriously concerned that Microsoft might gain a similar position in smartphones as it had on PCs. That included Google (and Apple) back in the day. That would only last as long as they felt the US market was in any way indicative or even relevant to global mobile victory. It isn't. Its a side-show only. Its not like the PC, cars, movies, airlines, most other industries, even Advertising, where often half or roughly half of the industry is in the USA. Not in mobile. So once Google - very smart people (or Apple, also very smart people) noticed that wait, China is actually a larger market than the USA in mobile phones - AND that the USA is only 7% of the mobile subscribers (today even less) then thats when they would not think that a USA-centric concept can take over the world. Thats why Android is so well designed to be a global OS which immediately seeked international and China-based handset partners while Microsoft Windows tried to pursue the typical monopoly arrogance that Microsoft always had.

So what I wanted to say, was that its quite possible yes, that any West Coast IT company in the mid-2000s decade might fear a future Microsoft dominance of the smartphone industry. We on this blog knew better and its never ever been a viable option for Microsoft to climb into anything like where say iPhone was a few years ago, around 20% market share. Microsoft had simply screwed itself so badly with all its partners, that they would go anywhere else instead - whether Symbian or now Android.

So that article sentiment was probably quite accurate for that time. It was soon known to be bullshit on this blog and all of you have long since of course been among the first to know that, ahead of most others in the mobile space who still feared Microsoft and Windows into say 2012 when still so many analysts promised that Windows would pass iOs into second place OS platfrom bwa-ha-ha-ha-haaa. I love it that Windows is dying on the phone, I can't wait for Windows eventually also die out on the PC.

Tomi Ahonen :-)

chithanh

PCs will continue to run Windows, I think no contender is in sight who can change this. But as PCs descend into irrelevance, they won't matter for the future of computing. Microsoft is already down to ~15% share of the personal computing market with negative outlook.

Microsoft has tried to increase their Office mobile apps user base, using patent threats and whatnot to make manufacturers preinstall them, but that effort has not been very successful so far:

https://www.surveymonkey.com/business/intelligence/office-365-vs-google-apps-microsoft-struggles-compete-mobile/

So it currently seems that Microsoft will fade along with PCs.

Tester

@chithanh:

" But as PCs descend into irrelevance, they won't matter for the future of computing. "

That's pure and utter nonsense. Think for a moment: Without PCs there won't be any content production for smartphones. True, for pure CONSUMERS a PC will become irrelevant. Just because the sales are declining doesn't mean that the number of PCs in use is also declining by the same degree. I can only repeat what I said before: The PC I bought in 2004 lasted 3 years until becoming obsolete, the one I bought in 2007 lasted 5 years until it broke down (and the main reason I did a complete replacement was the loud fans in it, not that it was too slow.) My current one is 4 years old now and shows no sign of becoming obsolete - unless something very serious happens it will do me some good service for many more years. So I guess it's safe to say that with a PC's average lifespan more than doubling over the last 10 years, the sales only tell half the story.

But be it as it may: Today's smartphones suck balls at content CREATION - hell, you can't even develop the software they are supposed to run on them!
If PCs are to become irrelevant, mobile has to cover all their uses. But right now, none of the mobile operating systems shows even a hint to bridge that gap.


Re.: potential Microsoft dominance on mobile:

I have to concur with Barney here.

Let's not delude ourselves: Android didn't become what it is now because it was so great. The first versions were atrocious, actually. It became what it is because it had no competition while it was struggling to get rid of its initial problems.

It is clear now that Microsoft can't compete. Wherever they face strong competition they fail. The reason they never had a chance to compete on mobile is Android. So, what might have happened, had Google not made Android? Let's just warp back to 2008 and imagine a world without Android.

My guess is that Microsoft would have made a second grade clone of iOS (well, didn't they do that after all?), made sure that all serious competition goes down the drain (guess what: they actually did by subverting Nokia!), and probably by default would have 'won' the market, because Apple would have continued to play the profits game.

The only reason they failed was that this time they did face a strong competitor who couldn't be brought down by their usual tactics and hat the advantage of being there first.


Wayne Borean


@Tester,

You assume that the Chinese smartphone manufacturers wouldn't have designed their own phone OS, possibly using the BSD kernel as a basis. Just like Apple did with the iPhone! Or the Linux kernel, like Google did with Android.

And you assume that PCs run Windows. I bought a new PC in March. It runs OSX. Yes, Macs are PCs too. Macs are heavily used in the content creation industries because of their reliability, lower cost, and superb software.

We don't need Windows to use PCs.

Wayne Borean


@Tomi,

There is reality, and there is perception. While Windows Phone may have had ZERO chance of becoming the monopoly Microsoft wanted it to become, the perception of that threat drove Google's decision to produce Android.

Perception drives decision making.

And yes, I know you know this. I'm stating it for those who haven't worked at a high enough level to see tnis play out.

chithanh

@FIGJAM
I agree that Windows is the best desktop operating system, not for me but in the "millions of flies" sense. It will remain the dominant OS on PCs.

@Tester
About Android:
Android is successful because it was able to out-innovate every other system on the market. Open Source community leader Eric S. Raymond explained this in terms of military theory on OODA (observe/orient/decide/act) loops:

http://esr.ibiblio.org/?p=2975
(too bad Sun Tzu didn't know about OODA loops yet, or Tomi might have written a blog on it ;))

About PCs:
Firstly, PCs are not going away today or tomorrow, or even next decade. But the PC market is in terminal decline, and that decline is accelerating.

Secondly, I don't think that you need PCs for content creation. What you need is maybe a big screen, a pointing device, a keyboard and access to reasonably fast computation. Neither of these is the exclusive domain of the PC (although admittedly, a PC gets you that all in one convenient package).

Have you noticed the trend for "remote gaming" lately? This is actually a byproduct of graphics vendors trying to figure out how to replace workstations with less capable clients, and do the heavy lifting server-side.

The increased lifespan that you mention has certainly contributed to the decline of the PC market, but Gartner recently reported that the installed base of PCs is shrinking:

http://www.gartner.com/newsroom/id/3280626

In other words, people throw away their PCs and do not buy replacement.

cornelius

@FIGJAM

There are many reasons why people hate Microsoft. Here is a list from the top of my head, although I for sure forget a lot of other reasons.

1. There was a time when WordPerfect was the king of office suits. Microsoft saw their success and decided to compete with it. Microsoft Office was not getting a lot of traction. Then Microsoft released Windows 95 and by a strange "coincidence" WordPerfect started to be very slow and crash. And people switched to MO. When you control the platform you control every single thing that runs on it. Novell sued Microsoft and of course didn't have proof that Microsoft intentionally killed WordPerfect (Windows source code is closed) but we know what happened.

2. When Sun created Java the idea was that the software would be compiled for a particular operating system, it would run just the same on any operating system as long as there was a Java Virtual Machine for it. Microsoft got worried because if Java gained traction and a lot of software would run on any operating system, then Windows would be irrelevant. People wouldn't need Windows anymore. They could switch to any rival operating system and continue to use the software they were used to. Microsoft tried to destroy Java's cross-platform capabilities and got sued by Sun and lost the case and had to pay over $200 M in damages. Microsoft then tried to compete with Java and created C#.

3. When Microsoft released the Active Directory, Samba wanted to be inter-operable with it but Microsoft refused to allow any competition to communicate with their stuff. Samba won the court case and forced Microsoft to stop being such a horrible monopolist and release the specs.

4. When the Internet was still young, there was a set of standards on how to build a web page. Microsoft wanted to kill all the other browsers that were popular at the time so decided to screw the existing standards and impose a completely different set of standards. Now the web developers had a tough choice to make. They could either build a website that rendered properly in Internet Explorer but not render properly in any other browser, or render properly in all the other browsers but not render properly in Internet Explorer. Or they would have to detect the browser and code for both cases, but that meant a lot of extra work on their part. Luckily Microsoft did not succeed and had to drop their idiotic standards, but their intention is what matters. Microsoft wanted the web developers to build websites for Internet Explorer only and when the users tried to use a competing browser the website would not render the pages properly and the user would say, hey, this other browser sucks.

5. The Nigerian government wanted to buy 15,000 cheap laptops for poor Nigerian kids. And to drive costs down, decided to install Mandriva Linux on them because it was free. And so they did. But Microsoft heart of the project and decided that it was dangerous for those kids to get used to a different operating system. So they bribed the Nigerian authorities (a mere $400,000) and install Windows for free on all those laptops.

6. Flash has many faults but has one big feature. It runs relatively well on Windows, Linux and MacOS. Microsoft didn't like that and wanted to screw Flash by creating Silverlight, which would run amazingly well on Windows, terribly on Mac and not at all on Linux. Luckily for us Silverlight is dead.

7. Android was doing exceptionally well when all signs pointed to the imminent death of Windows Phone when Microsoft decided to send a certain piece of shit to become the CEO of Nokia and adopt their dying operating system. In addition Microsoft bribed Nokia with $1 B per year. The fact remains that Microsoft destroyed one of the most interesting operating systems at the time: Meego.

There are for sure many other instances where Microsoft, instead of competing on merits, tried to destroy their competition unfairly, often promoting their subpar products. If any of you remember other instances, I encourage you to post them.

The PC manufacturers made a terrible mistake when they granted so much power to Microsoft back in the day, and let Microsoft become a virtual monopoly on the desktop. They learned their lesson. On mobile they refused to be fooled twice. Given Microsoft's history of abusing its dominant position, any responsible person would not want to give Microsoft any chance of survival. When Microsoft will die, this world will be a better world. I am all for competition on mobile operating system, just not from Microsoft.

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Hong Kong but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit www.tomiahonen.com Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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