Microsoft (NASDAQ: MSFT ) has long enjoyed dominance in the PC arena, with Windows 8.1 recently passing OS X Mavericks in installed copies and locking down the top five operating systems as different versions of Windows. The same can't be said of its mobile OS Windows Phone, however. Despite positive gains in Europe and some other parts of the world, Windows Phone still lags significantly behind Apple's (NASDAQ: AAPL ) iOS and Google's (NASDAQ: GOOG ) Android in terms of mobile market share.
To help correct this, Microsoft is working on its Windows Phone 8.1 update (which shares a naming convention and overall strategy with the Windows 8.1 update for PCs and tablets). Despite adding features that might make it more attractive to consumers and app developers, however, the update might not be enough to take Windows Phone where it needs to be.
Windows Phone's coming of age
With Windows Phone 8.1, which is expected early in 2014 but currently has no definite release date, a few new features are reportedly being added, but they're old hat to iOS and Android users.
The most prominent of the rumored features are a notification center that is accessed by swiping down from the top of the screen and a Siri-like virtual assistant named "Cortana" (taken from the character in Microsoft's "Halo" game series). It's also rumored that Windows Phone 8.1 will feature the ability to individually set volume levels for different apps, and that it will see the demise of physical buttons by introducing on-screen buttons instead.
It's easy to understand why Microsoft is making these changes (assuming that they all come to pass.) Adding features that are common in the leading mobile platforms would make it easier for new users to adapt to Windows Phone if moving there from the competition, and removing physical buttons could lower the price of manufacturing handsets as well. It might also make it easier for manufacturers to adopt Windows Phone since they could release WP versions of Android-powered smartphones without having to redesign the phone to add buttons.
Will it work?
I recently discussed some of the headway that Microsoft is making in the mobile market. While Windows Phone is currently in a distant third place, it's inching closer to 10% market share and in some regions has actually captured 15% to 20% of the local market. The platform is even making headway in regard to a perceived lack of apps; as of November, the platform was seeing uploads of approximately 500 new apps per day and has had over 3 billion downloads to date.
The problem with this is that the rate of growth isn't fast enough to begin closing the "app gap" anytime soon. While it's a positive sign that Windows Phone recently passed the 200,000 app mark, this pales in comparison to Apple's 950,000 apps or Android's 1 million. While those numbers are obviously subject to large amounts of shovelware, Windows Phone suffers from the same problem. Worse yet, apps made popular on the larger platforms aren't always available on Windows Phone right away (or in some cases, at all); this means that consumers have to buy Android or iOS devices just to access the current popular apps.
That doesn't mean that all hope is lost, of course. Some game makers such as Rovio are beginning to produce Windows Phone versions of their new and popular games right alongside the Android and iOS versions, and a growing number of big-name apps are finally making their way to the platform. Windows Phone isn't going to close the gap completely, but if it can become a viable platform for the developers of must-have apps then the gap will matter significantly less. After all, it won't matter if Windows Phone doesn't have 500,000 apps that few users know about so long as it has the few apps that most users want.
The future of Windows Phone
If Windows Phone 8.1 manages to build upon the success of Windows Phone 8, Microsoft could establish itself as a serious competitor in the mobile field. This isn't to say that it would be able to overtake Apple or Google, but it could establish enough of a presence for more developers to include it in their releases and to gain more recognition in the public's eye. That's not going to happen overnight, though.
The rumored features give us a glimpse of the direction that Windows Phone might be headed, and that direction seems to be following the paths beaten by the giants of the mobile sector. This isn't necessarily a bad thing, though; after all, it's Android and iOS that set the expectations of the users Windows Phone hopes to capture. More importantly, potential cost-cutting measures like removing physical buttons could help the platform continue to excel in the lower price points where it has seen most of its recent growth.
Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you what you need to get started, and even gives you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.