In the hubbub over demand for Apple's
Attacking the robot, eating the apple
Right now, all we have is a sketch of what's planned. And that's only because Andy Lees, president of the Windows Phone division, was in Asia speaking at a conference sponsored by The Wall Street Journal. Lees told an attending Journal reporter that Microsoft was going into China "in a big way," with Nokia as a top partner.
Apple and Google
We don't yet know how these efforts will pan out, but consider this news through the lens of handset market share. Chinese researcher ZDC found that HTC, Nokia, and Samsung combined accounted for close to 70% of the attention of Chinese smartphone shoppers. A similar survey found that 12% were focused on Windows Mobile. Clearly, there's an installed base for Microsoft to sell to.
A big pie getting bigger
Handset brands are likely to lead the way in generating sales -- Chinese consumers seem more attuned to manufacturers that OS suppliers -- but there are also economic forces to consider. Rising regional demand for PCs and related equipment seems to be fueling enthusiasm for smartphones.
IDC predicts that China will become the world's largest smartphone market by 2015. Globally, some 982 million handsets could reach market that year. Can you imagine? Not only is that more than double the number of advanced devices due to ship this year, but it's also more than six times the number of iPhones Apple has sold since the device debuted in 2007.
The end of feature phones
Couple rising demand with the experience Nokia, HTC, and Samsung have manufacturing on a mass scale. While premium brands do command premium prices -- even in China -- Asia remains a hotbed for feature phones manufactured by Mr. Softy's partners. Drop costs enough, effectively ending the need if not the desire to price smartphones at a premium, and you have the makings of a cost advantage that could become a blunt instrument in the fight for market share.
This isn't just wishful thinking, either. Lees told the Journal that smartphone production costs were falling to the point where, by 2015, it should be possible to build one for $100. Think about that. In a market where there's no such thing as a feature phone, an iPhone could quite quickly become unremarkable without some serious software breakthroughs.
Foolish final words
Don't get me wrong; I'm not suggesting that Apple can't or won't innovate. What I'm suggesting is that, when everything's a smartphone, there's going to be a legion of former feature-phone upgraders looking to China Mobile
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool owns shares of Apple, Microsoft, Google, and China Mobile. Motley Fool newsletter services have recommended buying shares of Apple, Google, Microsoft, and China Mobile, as well as creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.