Can Windows Phone 7 Overtake iOS?

Microsoft (Nasdaq: MSFT  ) isn't alone in thinking that Windows Phone 7 can surpass iOS.

Citing "conservative" forecasts from market researchers Gartner and IDC, Windows Phone marketing head Achim Berg expects Windows Phone to claim more than 20% of the smartphone market by 2015. With Apple's (Nasdaq: AAPL  ) most recent market share pegged at 18.2% by Gartner last month, scoring a 20% share would be a victory over Cupertino. The same Gartner report showed Windows Phone with a mere 1.6% share last quarter.

It's a bold goal, but I don't see it happening. Apple would have to fail to garner more market share while Microsoft would need to grab multiples of its current position. It's certainly possible, although doubtful. In fact, it's more possible now than ever before.

The smartphone gods have decided to give Mr. Softy a break, and Windows Phone's prospects have substantially improved in recent weeks despite being late to the party. It must be from all the mobile users sacrificed via Windows Mobile 6 over the years. The operating system itself has some catching up to do, but its next iteration, Mango, makes significant progress in several key departments, like multitasking.

Partnering with Nokia (NYSE: NOK  ) back in February definitely gives Microsoft opportunities. Despite Nokia rapidly losing market share, according to Gartner it still ranks top dog at 22.8% when ranked by overall vendor shipments. Keep in mind that Nokia is getting billions of dollars from Microsoft to help develop and market the platform.

It will be interesting to see if other OEMs, like Samsung and LG, ask for similar treatment as they consider diversifying their offerings away from Google (Nasdaq: GOOG  ) Android. Taiwanese manufacturer HTC just revealed two new phones running Mango, adding to its current repertoire of six.

I'm one of the first people to tell you that Windows Phone is looking more and more like a viable smartphone platform. I just don't think it will ever surpass iOS or Android. However, I do think the stage is set for it to overtake Research In Motion (Nasdaq: RIMM  ) and settle in third place.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple, Research In Motion, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (22) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 04, 2011, at 1:46 PM, H3D wrote:

    When did Gartner move from market research to paid advertising?

    Windows phone has zero momentum or history of success. To predict 20% is pure speculation. Maybe Bada will take 20%. Just as likely.

  • Report this Comment On September 04, 2011, at 3:26 PM, Bunnyturd wrote:

    IDC's predictions are worthless. Only analyst and researchers that can't get a job anywhere else ends up at IDC.

    They are only at predicting numbers from the past... the further into the future the more they are off.

    Just look at their numerous predictions on Itanium servers. (check wikipedia on Itanium)

    Year after year IDC said Itanium is going to be 20 billion industry..in 2 years. 10 years later.. it is still less than 5% of the market that IDC predicted.

    These guys are a bunch of clowns.

  • Report this Comment On September 04, 2011, at 5:19 PM, BedfordNH wrote:

    On the one hand, the market is highly unpredictable and Windows phone may not become number 3. However, the 7.0 OS was terrible; Mango reviews are much better. Nokia has made phenomenal hardware. I am sick of Android's crude interface and its instability. I, for one, will be eagerly awaiting a Nokia with Mango -- more sophisticated OS and hardware than any Android phone available to date, without becoming another blind slave to the half-eaten fruit company.

  • Report this Comment On September 04, 2011, at 7:24 PM, etgh wrote:

    I'm still not clear how an OS with an unbelievably poor history entering an already crowed market is going to zoom into third place. Riding the coat-tails of Nokia might get some marketshare, but the exodus from Sybian has begun and is in full swing.

    While Nokia will continue to sell a lot of phones world wide, they will not be smartphones.

  • Report this Comment On September 04, 2011, at 8:45 PM, robwg wrote:

    Until MSFT figures out that it's not about the OS, but the integrated experience from hardware design, seductive user interface and the App store, they haven't a chance. Mango may have some limited success (that remains to be seen), but but without the panache of apple's hardware or the wealth of toys for a buck in the app store, they'll never make anything like 20% market penetration.

  • Report this Comment On September 04, 2011, at 10:05 PM, gslusher wrote:

    @BedfordNH:

    "...without becoming another blind slave to the half-eaten fruit company."

    I guess you'd rather be a blind slave to a company that was found to be an illegal monopoly, used illegal business tactics to ruin other companies, bullied hardware manufacturers into joining its illegal conspiracy, etc.

  • Report this Comment On September 04, 2011, at 10:41 PM, TMFNewCow wrote:

    @gslusher, nice

  • Report this Comment On September 05, 2011, at 2:46 AM, dastaub22 wrote:

    "I just don't think it will ever surpass iOS or Android"

    That appears to also be the consenus of the comments. Luckily, a consensus usually indicates a turning point, so that is bullish for MSFT.

  • Report this Comment On September 05, 2011, at 2:48 AM, dastaub22 wrote:

    "Until MSFT figures out that it's not about the OS, but the integrated experience from hardware design, seductive user interface and the App store, they haven't a chance"

    You just described an operarting system and then said it's not about the operating system?

  • Report this Comment On September 05, 2011, at 2:50 AM, dastaub22 wrote:

    "I'm still not clear how an OS with an unbelievably poor history entering an already crowed market is going to zoom into third place"

    I think that would be called persistence, vision, and cash.

  • Report this Comment On September 05, 2011, at 5:05 AM, H3D wrote:

    "I think that would be called persistence, vision, and cash."

    Persistence and cash is why it's possible. Lack of vision is why it is highly unlikely.

    The history of failure is what makes the prediction laughable.

  • Report this Comment On September 05, 2011, at 10:46 AM, bxbbrian wrote:

    Here is why wp7 will overtake Iphone and Android for that matter a predicted by Pyramid research group.

    http://www.youtube.com/watch?v=DP9HlGB7Sy8

    http://www.youtube.com/watch?v=XpI8252TieM&feature=chann...

  • Report this Comment On September 05, 2011, at 11:45 AM, techy46 wrote:

    It'll be interesting to see how much market share a single OS and UE for all PC from factors gains. MS already has 30,000 apps and the Metro active tile UI is intriguing vesus Android and iOS. I think MS can make a three horse race and as long as they get 15-20% who cares who wins. I want a Xbox server and Windows clients. I don't really care about what Android and Apple consumers think.

  • Report this Comment On September 05, 2011, at 12:02 PM, etgh wrote:

    In reply to techy46....

    Windows mobile has been around for 15+ years and has never gained much traction. They have gained a foothold with Nokia but given the negative reaction of the stock market, the consensus view was not positive.

    While I admit to being a RIM fan, I can't see MSFT really winning in this highly competitive market. As prices drop and revenues get tight, I'm even worried for Apple as they have extremely high profit margin requirements.

  • Report this Comment On September 05, 2011, at 12:54 PM, DonKing108 wrote:

    iOS is used on the iPhone, iPod Touch, iPad, and will probably move to other devices. How will WinPhone7 come close to this?

    Tell ya what. I could certainly be wrong. I'll bet you $100 to your favorite charity that WinPhone 7 (or 8) won't even come close to iOS and that supporting WinPhone, like the way MS supported Xbox for years losing tens of billions, will only be a drain on MS' bottom line?

    You in? Will you back up your claim with your money? Or while you wimp out?

  • Report this Comment On September 05, 2011, at 3:37 PM, dongennl wrote:

    Nobody seems to think about customers in these predictions. WP7 is already on the market and nobody is buying it. (Seriously, have you seen one in the wild..? I haven't either)

    I'm sure it is a lovely OS, sure Samsung and LG may be a pissed off with the big G right now for buying Motorola, but they know what their customers want.

    Customers are seeking out Android these days, if they don't want iOS, they know it is the only other system with decent apps. Seriously, 30k apps is irrelevant if they are virtually spam. Customers know that the iOS app comes out first, then probably Android and maybe, maybe a third one on Blackberry. Try Sonos, try Lutron. or anything else decent.

    And don't you think Google will have done some behind the scenes prep with their partners to explain the 'real' reasons they bought M? Of course they did.

    What MS needs is vision. They will never have it with Ballmer.

  • Report this Comment On September 06, 2011, at 9:55 AM, laserfloyd wrote:

    Viral is what this day and age is. If something doesn't immediately catch on and become a raging success; it is deemed a horrible epic failure. Anyone in their right mind wouldn't expect WP7 to gain a lot of market share in the first 10 months. People talk as if it's been around for years. WinMo was around for years but WP7=/=WinMo.

    There is a stigma attached to Microsoft and Mobile. It isn't "cool" or at least it wasn't. WP7 is aiming to change that. If I tell someone I have a WP7 device they might shrug or even cringe. When I show them the device they are intrigued and compliment it. It's going to take some time to dig out from what Windows Mobile was. MS has the resources you can be sure about that.

    Also, as an answer to iOS on iPhone, iPod Touch and iPad. Microsoft is getting ready to push Windows 8. That's their answer; a fully functioning OS that can run from a simple slate up to the most powerful machine you can piece together. Do some looking around on it. MS will host a conference in a couple of weeks in which we'll get a lot more Win8 info.

    It will be an interesting next couple of years. :)

  • Report this Comment On September 06, 2011, at 11:42 AM, techy46 wrote:

    In reply to etgh...

    I agree that MS can't do it alone but with an open W8 software platform for all PC form factors including phones and tablets and help from all the device OEMs like Acer, Dell, HP, HTC. Levono, Nokia, Samsung, Toshiba it could become realyy interesting given MS's overwhelming enterprise and gaming presence. I don't put too much value in the market's initial reaction as they're too involved in FUD, hype and consumerism to judge strategic value.

  • Report this Comment On September 06, 2011, at 5:05 PM, Mykem wrote:

    I'm thinking people in this forum aren't looking at the forces at work. It's not entirely about the features. While the Mango release is very nice, and feels very smooth, which helps a lot, there are several factors going for WP7...

    There is an army of well-trained app developers, a tight quality controlled app store (greater concentration of qualiy apps), a hardware partner (Nokia), tons of marketing capitol, the most efficient hardware accelerated OS for mobile devices (think more battery-life and lower hardware specs without sacrificing performance), an army of evangelists training sales reps nationwide, and I would imagine a strong marketing campaign coming up.

    Couple that with the recent buzz about Mango, the tie-ins with Office, Xbox, Zune, Skydrive, Live services, and all popular social networks, and I think we're looking at a winning combination.

  • Report this Comment On September 10, 2011, at 2:46 PM, dastaub22 wrote:

    Viral is what this day and age is. If something doesn't immediately catch on and become a raging success; it is deemed a horrible epic failure.

    Signed: A teenager

  • Report this Comment On September 10, 2011, at 2:53 PM, dastaub22 wrote:

    Look at the retail experience if you want to explore an iPhone versus the retail experience if you want to explore a Windows Phone.

    It should be embarrassing for MSFT. It appears the retail experience was ignored by Microsoft Mgmt and given a never ending, thoughtful attention by Apple Mgmt.

    The Windows Phone in stores is a dead brick with a sticker over the screen. The retail employees will say: "you don't want a Windows phone...you need to wait until a few more versions have been released..."

  • Report this Comment On November 16, 2011, at 11:40 AM, BedfordNH wrote:

    @ gslusher,

    you are taking things so personally ... poor guy!

    I wish there would be more competition in the market of personal computing. I pledge no allegiance to MSFT, GOOG or AAPL. Each has its downsides. I am not afraid to say that WP7 -- and MSFT in general -- has been behind, that MSFT has put out one lackluster OS after another. Android is still rough around the edges, although each OS update has made improvements.

    AAPL has its own problems. AAPL needed Mr Steve Jobs to bring it back from the brink of death. Let's see if it will continue to have the leadership necessary to carry its current intense levels of innovation. I say it's a big fat NO. I give AAPL until Nov 13th, 2014 and it's all downhill from there.

    Hopefully a new and exciting company will have charged forth by then because the selection in smartphones and tablets right now is just pathetic. In the meanwhile, AAPL will hang around 400 +/- 5% because of this terrible economy, and it is giving you ZERO dividends. At least MSFT yields approx 3% and NOK 7-8%. Let's see whose money is working harder (I have no positions in MSFT, nor any intention to in the foreseeable future). IMO NOK hit bottom and has only one direction to go. I am long NOK.

    May the best win.

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