American Marketer


Why your next phone may be Windows

November 11, 2011


By Gary Schwartz

Mobility is a treacherous business. Mobile phones are only used for an average of 18 months before dropping down toilets, falling or table and general wear-and-tear drives the consumer back into the buyers’ market.

For fashion- and trend-conscious consumers, this cycle is probably shorter.

And mobile folk are a fickle bunch.

OS in OR
While some may be diehard Apple or Android loyalists, the masses swap out the old for the new in rapid succession.

Every time a screen smashes, a phone drops down a manhole or domiciles in a taxi without you, there is a fresh opportunity for a handset manufacturer and an operating platform to woo the new shopper.

Of course, there is some stickiness.

Consumers may be faithful to their BlackBerry Messenger group or the slick screen design of their iPhone, or the price point of their Android device.

But when shoppers are back on the market, they tend to be unchaste.

It is not just the device.

Apple has made sure that the consumer is well aware that if you want applications there is only one show in town.

Developers worldwide are working hard to make sure that iOS and Android operating systems can market themselves and sell based on access to this wealth of content.

The Research In Motion BlackBerry Playbook and Hewlett-Packard’s WebOS never stood a chance without a preexisting content library.

Apple’s marketing genius continues to position the iPhone as the aspirational handheld, while Google’s open-Android operating system on Samsung, HTC and Motorola continues to drive the bulk of smartphone sales.

With HP declaring defeat and BlackBerry and Nokia under siege, it looks like a two-horse race.

But recently things have become a little difficult to track.

Window of opportunity
Apple started an IP war, litigating against Samsung and winning a stay of the release of its new Tab in Europe.

Google’s purchase of Motorola Mobility, ostensibly for intellectual property, suddenly makes the giant of the cloud a retail-bound mobile phone manufacturer.

This forces Samsung and HTC Android-loyal hardware partners to reevaluate their strategy and possibly further diversify their operating systems.

The pressure of the looming patent war and Google’s unsettling role in the device market is opening the doors for Windows reenter the market.

With the salvo of recent litigation, the Android operating system is turning into a liability.

Open-Android does not come bundled with an indemnification for the hardware vendors. Windows Phone’s does.

This is becoming an expensive problem for handset manufacturers. Samsung and HTC have found themselves paying for their own legal defense and paying on any ensuing royalty settlement.

In the background, Windows has been quietly enforcing its IP rights globally.

Goldman Sachs analysts estimated that Microsoft will make nearly a half-billion dollars in 2012 on royalties of $3 to $6 per Android device from vendors such as Samsung and HTC.

Microsoft’s “Android” royalties are estimated to be triple the revenue earned on Windows Phone licenses.

With all these mobile machinations, Windows 8 may be powering your new device pick on the shelf next year. Microsoft may allow for light computing with better utility than Apple or Android.

Next time your phone-de-jour falls down the stairwell or is left on the bus, a phone powered by a Windows operating system maybe the new flavor of the day.

Gary Schwartz is CEO of Impact Mobile, Toronto, and the author of “The Impulse Economy” (Simon & Schuster, 2011). Reach him at