Author: Kevin Donoghue, CEO - Telesoft
The votes are in. For the first quarter of this year, Android won 79% of the market followed by Apple’s iOS operating system with 19% of the market. Windows was well behind and registered only 1% in the poll. The results were so bad, it contributed to the decision that Microsoft will sell its low-end feature phone business for $350 million to FIH Mobile, the contract manufacturer owned by Hon Hai/Foxconn Technology Group, and HMD Global – a Finnish company.
Although Microsoft will continue to license Windows 10 Mobile and build Lumia devices, the future does not look good. From the start, Microsoft failed to get carriers to stock its phones in stores, and developers did not create apps for the Windows 10 Mobile platform. HTC, Samsung, Sony, LG never had much interest in manufacturing devices with Microsoft’s operating system.
Microsoft CEO Satya Nadella’s decision to get out of the low-end phone business is part of a dramatic write off of its $7.2 billion investment in Nokia. This highlights what happens with the ‘network effect’ where benefits increase directly to an increase in users. If one’s colleagues are all attracted to the same platform, another network will not attract many users. Facebook, Google, LinkedIn, and other platforms benefit from critical mass and other benefits that come from the network effect.
When enterprises vote for Apple’s iOS platform or Google’s Android operating system they lock themselves in, but businesses also benefit from the network effect. With the critical mass from these two operating systems, managers can spend less time debating which platform to develop apps for their business. Security is easier because they can focus on managing threats from fewer operating systems and the apps on those systems.
Telecom managers also benefit in managing expenses. First, it is easier to identify problems and warn employees about apps that hog bandwidth or drain batteries. Second, the catalog of devices that needs to be maintained is smaller. Third, there is no learning curve. With fewer operating systems, using a smartphone and its apps is easy because employees are already familiar with the platform. Negotiations with carriers for devices are simpler because there are fewer variables to negotiate with two standard platforms. Spares that need to be kept on hand for emergencies are limited to a few models that employees will readily accept.
There can be downsides to monopolies, but Android and iOS have created a rich duopoly where two large competing operating systems have strong benefits for their respective constituents. Telecom managers can celebrate, but they shouldn’t get too comfortable. There are always unexpected surprises in the battle for dominance in operating systems for smartphones with the enterprise market.Tags: Android, Apple