According to Bernstein Research's Pierre Ferragu, who has joined Nokia and Windows Phone skeptics, consumers simply don't want Microsoft's mobile platform, no matter which OEM pumps out hardware - it's just too little too late. It was thought that Microsoft could see a surge of interest in Windows Phone due to the results of the Apple and Samsung patent battle, which we covered earlier this week.
Ferragu believes the Windows Phone situation (low marketshare and activations) will not improve any time soon and any pressure on Android will have little effect, if any.
"Our research shows that for many years, poor sales of Windows-based phones stem from a deep and stable lack of consumer interest for the product. Despite numerous and repeated efforts of manufacturers (Nokia, but also Samsung and HTC) and Operators to develop an alternative to Android and Apple based on Windows, and despite the launch of numerous phones based on Windows with strong features, reviews and marketing support, the operating system remains cornered to less than 5% market share in smartphones."
While it doesn't take a genius to work out Microsoft and partners are in a spot of bother when it comes to Windows Phone, we (as well as Microsoft) are aware of the long and difficult path ahead. No one said it was going to be easy. Microsoft even stated many times they are in a marathon, not a sprint. Ferragu continues:
"The situation of Windows in mobile phones is now very unlikely to revert. Smartphone Operating Systems benefit from ecosystem dynamics in terms of application ecosystem but most importantly consumer advocacy and adoption. Given the strength of Android and Apple today in consumers’ minds and the scale of both ecosystems, it is unrealistic to believe anything short of a true product revolution, like the iPhone was in its time, could instil life into an alternative platform."
Ferragu believes there's greater chance for Microsoft to succeed with tablets running Windows 8, and with what we've seen today from Samsung, we'd look to agree with such a statement - OEM partners have thrown considerable weight behind Windows-on-the-move. But one cannot simply rule out Windows Phone.
As well as noting the above, Ferragu also goes on to explain how he believes Nokia's patent catalogue is worth less with Apple's victory over Samsung, and ends by modelling €0.50 to €1.50 per share in royalty value to Nokia of those patents.
"Last week’s ruling showed Apple was able to bag in significant court victories with its patents relating to software and screen experience, despite Samsung and more broadly the Android camp now having access to a deep portfolio of more traditional wireless patents (Samsung’s own portfolio and Motorola’s portfolio). We don’t believe the ruling has a significant impact on the current declining trajectory of prices in IP transactions that we described in recent research."
It's down to Microsoft to ensure that partners and -more importantly- carriers are actively supporting Windows Phone. Nokia is starting to be seen as a single manufacturer in the Windows Phone ecosystem for the choice, services and exclusive apps available with its Lumia range of smartphones. The likes of HTC and Samsung do release hardware, but software (as well as general) support is lacking compared to the Finnish manufacturer.
With Windows Phone 8 just around the corner, which will compliment both Windows 8 and Xbox, it's going to be an eventful 2012/13 for sure. A unified UI and innovative hardware will see Windows Phone rise or continue to dwindle on its current trajectory. We've been impressed so far with what Samsung has come up with at IFA 2012 today, the ATIV S (while looking fairly similar to the Galaxy S3) is a modern and attractive device. Nokia, HTC, and other OEMs are yet to unveil Apollo hardware, but if all partners market their Windows Phone lineups to match effort on competitor platforms, we could see a significant rise in marketshare.
Here's hoping anyway. What are your thoughts on Windows Phone's chances to pick up momentum? Do you have high expectations for Nokia with what Samsung has announced so far? Let us know in the comments.
Source: Barron's

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