With its market share hovering near 3%, Microsoft's (NASDAQ:MSFT) Windows Phone is far behind its chief rivals. Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android account for roughly 15% and 79%, respectively, of the global smartphone market.
Microsoft's modest market share is far from surprising -- its mobile platform faces a variety of issues, including a lack of third-party software, inconsistent updates, and less diverse hardware. But it's about to fall even further behind. Apple's and Google's mobile ecosystems are on the verge of taking two big steps forward -- ones that should put Windows Phone at an even larger disadvantage.
Want a smartwatch? Forget about Windows Phone
Smartwatches supplement, rather than replace, an existing smartphone. They enhance a handset, giving their owners increased functionality and convenience; effectively extending a smartphone's operating system to the wrist.
Next month, iPhone owners will be able to purchase an Apple Watch. Starting at $349, the device is certainly expensive, and with its lackluster battery life, it may not appeal to many -- at least at first. Nevertheless, iPhone users have the option to purchase one.
Owners of handsets running Google's Android can already select from a wide variety of Android Wear watches. There are half a dozen models on the market right now -- including the G Watch R, the Moto 360, and the Zenwatch -- and more are on the way. Owners of Samsung's Galaxy devices have even more choice: They can purchase its Gear products in addition to Android Wear devices.
The idea of selecting a smartphone based on the ability to use a particular smartwatch may seem asinine: Smartwatch interest and penetration are relatively low. But as these devices grow in capabilities and in power, Microsoft's Windows Phone could be at a huge disadvantage.
There are no smartwatches that work with Microsoft's Windows Phone. Even the relatively low-tech, Kickstarter-backed Pebble does not currently support the platform. The closest thing approaching a smartwatch for Windows Phone is the Microsoft Band. Unfortunately, it's more of an activity tracker than a smartwatch -- its features pale in comparison to the Apple Watch and most Android Wear devices -- and it has received relatively lackluster reviews.
There's no Windows Auto
iOS and Android are also about to invade automobile dashboards. Later this year, Google's Android Auto and Apple's CarPlay will begin showing up on dozens of new car models in dealerships across the country.
Using a micro-USB or Lightning cable, owners of cars equipped with Android Auto or CarPlay will able to effectively beam their smartphone's interface to their car's dashboard -- assuming, of course, that their smartphone is an iPhone or an Android-powered handset.
There is no Windows Phone equivalent of CarPlay or Android Auto -- yet another example of how Microsoft's mobile platform is becoming less competitive. Like smartwatches, it will take some time for the effects to play out, but a car owner looking to take advantage of their new vehicle's technology would be less inclined to choose one of Microsoft's handsets in the future.
Will Microsoft respond?
Of course, Microsoft could respond to both points: The Microsoft Band's very existence is proof of its interest in wearables, and as it once provided the technology underpinning Ford's Sync in-car connectivity system, a dedicated Windows Phone automotive interface isn't outside its capabilities.
But if it doesn't enter these two areas -- and soon -- Windows Phone will become even less appealing.