Why Windows Phone 7 Is High Risk For Microsoft

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Microsoft, will this week throw another roll of the dice in a desperate effort to win back market share in the highly competitive Smartphone market, their chance of success is extremely thin if they have any chance at all.

An arrogant Company who four year ago believed that could they could do no wrong the US Software Company is today heading the same way as the US economy, down.
In the mobile phone market Microsoft have seen their share of the Smartphone slip from over 50% with research Company Gartner saying that it will ultimately plunge to 3.9% by 2014, a period by which the company will be dismally lagging behind all other leading developers of mobile OS.
In the browser market Microsoft has seen their market share slide from over 88% with their Windows Explorer Browser to 49%.
In the gaming console market where Microsoft is still carrying billions in Xbox 360 losses Investment bank Goldman Sachs has suggested that Microsoft should “carve out” the company’s Entertainment and Devices division, including the Xbox 360 business, from the rest of the company.
In the Windows OS market Microsoft is facing new competition from the likes of Google with their new Chrome OS and HP with their WebOS offering. Already under pressure from the Apple Mac OS the future does not look good for Microsoft who on Tuesday will team up with another struggling Company Telstra to launch their new mobile phone range in Australia.
Six months ago these two Companies teamed up to launch the HTC HD2, an $896 Smartphone that runs on the old Windows Mobile OS. On Tuesday that phone will basically become old hat.
Sold by Telstra on 2 year $86 a month plans the HD2, will not be able to be upgraded to the new Microsoft Windows Phone 7 OS.
 
According to Gartner, Microsoft’s Windows Phone 7 OS will only give only a slight, transitory boost to the company’s meagre share of the mobile OS market.
In a report issued last week Gartner analysts said that Microsoft will marginally increase their share of the mobile phone OS market from 4.7% in 2010 to 5.2 in 2011.
They said that the Symbian OS will retain its lead of the OS market in 2014, with a 30.2% share, slightly better than the Google Android, whose share will likely soar to 29.6% from 3.9% in 2009.
Another big issue for Microsoft is the lack of mobile phone applications.
Early buyers of the new Windows Phone 7 OS will only have access to 2,000 applications at launch. In comparison Apple has over 250,000 applications and Google with their Android OS offering have over 90,000 applications.
Last week Shares of Microsoft slid Goldman Sachs downgraded the company, claiming it needs to change its course for the shares to release their intrinsic value.
“Concerns over the longer-term sustainability of the Windows, Office franchise have clearly weighed on the stock,” a Goldman Sachs analyst wrote in a note to investors.
Analyst Sarah Friar said that Microsoft has not answered threats from smart phones and tablet computers, “which threaten to encroach on its highly profitable Windows franchise.”
For consumer the real threat now is that if they purchase a Samsung, HTC or LG phone running the Windows Mobile 7 OS they are buying into an unproven operating system that has limited applications.

 
Both Apple and Google are currently delivering superior mobile operating systems, which is why they have the lion’s share of the Smartphone market. They have over 350,000 applications between them with this tipped to be over 400,000 by 2011.
Like the customers who listened to Telstra and purchased the HD2 the chances are that the new Windows Mobile 7 models being introduced on Tuesday by Telstra could by mid, 2011 be old hat as consumers fail to adopt the new OS and both Apple and Google launch exiting new capabilities with their new OS offerings.     
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