iSuppli – Windows Mobile on the up

isuppli I have not been as busy with Windows Mobile news since Mobile World Congress earlier this year, and to me that says something about the health of Windows Mobile.

it seems iSuppli agrees, saying despite current troubles with the OS, they expect the operating system to be resurgent next year, with pretty steep growth expected.

iSuppli predicts the OS will go from 20 million sales in 2008 to 67.9 million in 2013, tripling in use and reclaiming the second spot after Symbian.

“Windows Mobile is facing a host of challenges, including rising competition from free alternatives like Symbian and Android, the loss of some key licensees and some shortcomings in its user interface,” said Tina Teng, senior wireless communications analyst for iSuppli. “However, Windows Mobile holds some major cards that will allow it to remain a competitive player in the market.”

It Takes a Smart Phone Village
The ace card in Windows Mobile’s hand is ownership of a complete infrastructure essential for the success of a smart-phone operating system.

“The battle over smart-phone software has spread beyond the operating systems,” Teng observed. “To win in today’s environment, a company needs not only an operating system but also device support, an application store, a broad portfolio of applications and support from the developer community. While Windows Mobile is losing some share to competitors in 2009, most of the alternatives cannot match Microsoft’s complete suite of offerings.”

For example, rather than just selling a barebones operating system, Microsoft offers a complete set of services that can assist clients in their customization and software integration efforts. In contrast, OEMs wanting to customize the Symbian and Android operating systems by modifying the user interface or widgets must invest in add-on software.

Licensee Losses
’Microsoft’s recent loss of two licensees—Palm and Motorola—has been cited as a sign of Windows Mobile’s weakness. However, these losses may not be as significant as they might appear.

“Palm never used Microsoft for all of its smart-phone operating system needs, so it never represented a large amount of business for the company,” Teng said. “Furthermore, it was known that Palm was working on its own smart-phone operating system for the Pre. As for Motorola, the company’s shipments and market share in the mobile handset business have been declining in recent years, making it a less significant player.”

Meanwhile, Windows Mobile recently gained another key licensee: LG, the world’s No-3 mobile-phone OEM. LG has pledged to produce 50 Windows Mobile handset models. Even after the loss of Palm and Motorola, Windows Mobile still boasts the largest number of OEM licensees among all smart-phone operating systems, at 14. Symbian is in second place, at 10.

“In terms of licensees, Windows Mobile remains in a very strong position in the smart-phone operating system market,” Teng said.

The Bottom Line
Perhaps the most glaring obstacles faced by Windows Mobile reside in its own shortcomings. “The Windows Mobile user interface looks poor compared to some of its slicker competitors—particularly Google’s Android and Apple’s iPhone operating system,” Teng noted. “The rigid folder system structure of Windows Mobile can be challenging for users. In addition, Microsoft didn’t update the user interface of Windows Mobile quickly enough, and it was slow to market with the dashboard look.”

Furthermore, the current version of Windows Mobile doesn’t support capacitive touch-screen technology, like the multi-touch screen used in the iPhone. “This represents a major barrier for smart-phone OEMs that would like to produce innovative phones,” Teng said.

Despite the drawbacks, Microsoft is expected to provide a remedy shortly. “Microsoft in 2010 will introduce an updated version of its operating system, Windows Mobile 7, which is expected to sport an enhanced user interface and browser as well as multi-touch control,” Teng predicted. “This will make it much more competitive with the alternatives on the market.”

Read more at iSuppli here.

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