August is the month of punditry. With many workers on vacation—this year, many are unemployed or on unpaid furlough, too—tech companies tend to hold back big announcements. So news and blog sites have to fill the space with something, seeing as how there is less news. Five minutes before Midnight EDT, yesterday, Business Week posted analyst Jack Gold’s Windows Mobile-ending prediction. It’s Microsoft punditry at its scariest.Jack expects Microsoft to exit the mobile operating system business, for several reasons. Among them: Microsoft makes so much from mobile Exchange, it doesn’t need to bother with the increasingly crowded mobile OS market. Another: Upstarts like Apple are doing better.
Jack writes:
Over the past two years, Microsoft’s (MSFT) grasp on the market for mobile-phone operating systems has been slipping because it hasn’t kept pace with the rate of developments in the smartphone market, such as touchscreens and a wide variety of compelling applications. As a result, Microsoft’s share of the smartphone operating system market has become anemic, while those of Apple (AAPL) and Research in Motion (RIMM) have soared.
I won’t disagree with him there. Microsoft has fallen behind, and there’s no sign of any catching up. What bugs me about Microsoft and Windows Mobile: It reminds me of Internet Explorer, which Microsoft let languish for years. There’s a saying that history repeats. It’s my observation this theory applies to human beings and the organizations they create. Microsoft is repeating IE mistakes now with Windows Mobile and not demonstrating the initiative to do better. Is somebody living in denial up there in Redmond? Absolutely, but I’ll explain how in a few paragraphs.
There is now fierce browser competition, driven in part by search revenues, and IE continues to bleed usage share even after two major releases. Internet Explorer 8 is still too complicated to use. The future belongs to Firefox and Webkit-based browsers like Chrome and Safari.
According to Net Applications, IE usage share was 67.88 Percent in July, down from 79.49 in August 2007. By comparison, Firefox share was 22.47 percent, up from 15.45 percent 23 months earlier. Safari: 4.07 percent, Chrome 2.59 percent and Opera 1.97 percent. Remember, that Net Apps data reflects usage and not marketshare, and many people tend to use multiple browsers.
The future browser market is where Microsoft is MIA: mobile handsets. According to StatCounter, which data I am using for the first time, iPhone/iPod touch global mobile browser usage share is 36.7 percent, from July 1 through today. Opera is 24.1 percent. Internet Explorer doesn’t show up among the nine browsers tracked by StatCounter. For the United States, iPhone/iPod touch usage share is 56.62 percent, followed by BlackBerry browser at 19.54 percent and Chrome 5.19 percent. IE Mobile: 1.8 percent.
There’s more than corporate history repeating. Browsers are important to the burgeoning smartphone market, where Internet Explorer trails even more than Windows Mobile.
Back to the punditry, Jack asserts:
Microsoft aimed Windows Mobile at corporations that wanted Windows as a standard across PCs and handhelds. But many companies have loosened those policies. Workers are now using the same smartphones for office and personal tasks—and they’re not choosing Windows. I expect Microsoft to realize this and exit the mobile operating system market within the next two years.
Jack couldn’t be more wrong about Microsoft getting out of the mobile OS market—unless the company’s top managers really are blithering idiots. Microsoft shouldn’t hang up on the mobile OS market but dial into it. What bugs me: I say that Jack must be wrong, but I worry that he might not be. As I explained in a late June post here, Microsoft is overly obsessed with enterprise computing. A Windows Mobile pull back would fit with Microsoft’s enterprise push.
Agreed, Microsoft is too focused on the corporate mobile market, but the trend Jack observes about mobile devices used for personal and professional purposes is nothing new. The first Palm Pilots, Treos, BlackBerries and even Windows Mobile devices came into businesses through rogue employees buying them for personal use and using them professionally, too. This trend is well documented, and a decade old.
Microsoft simply has poorly embraced this commingling of behavior and data, particularly as it applies to smartphones. Hell, even Google gets it, and Google’s mobile OS is the closest to Microsoft’s; both companies license their mobile operating systems to hardware vendors.
Jack recommends: “The most important part of Microsoft’s mobile strategy should be based on enhancing ActiveSync to its strategic advantage by ensuring that the greatest potential number of phones work with the software.”
I couldn’t disagree more. ActiveSync licensing is a drug, an easy fix, that hurts Microsoft’s broader mobile strategy. Exchange revenue benefits today blind overly enterprise-focused Microsoft from being more aggressive in the mobile browsing and operating system markets. Mobile Exchange helps Microsoft executives live in denial about the real urgency to fix the mobile browser and OS.
If enterprises really need Exchange so much, Microsoft has strategically more to gain from using sync as a differentiator for Windows Mobile. As I’ve asserted so many times before: Sync is the killer app for the connected world.
I tell you this: If Microsoft loses the mobile market, it loses the future. Once again, and I’m exhausted from blogging this, I say that Microsoft must launch a mobile Manhattan Project. If not, it will be buyers of all categories, including enterprises, hanging up on Windows Mobile.
Editor’s Note: An updated version of this appeared at Betanews on Dec. 3, 2009.