Blackberry’s train crash in slow motion, exemplified by their $1 billion write off on Friday, has given me pause for though – Is it worth the time, money and effort to try and build a 3rd ecosystem?
While few think the smartphone world can support 4 ecosystems, many also think three is too much, and even if Microsoft could become second, few think Android can currently be displaced from its dominant position.
While many would point to the cyclical nature of the smartphone market, where in 5 year’s time today’s leader will be tomorrow’s loser as a reason for hope, Microsoft’s Windows dominance is itself a counter example – once the network effect kicks in the rankings can become very stable.
So Microsoft could spend countless of billions and several years slowly gaining market share, to top out at 15% – 20% in 5 years, or they could do something dramatically different.
Microsoft will soon become a smartphone OEM, and the same logic which led Nokia to produce an Android handset will in fact apply to Microsoft – delivering a handset running a smartphone OS which has high acceptance.
Blackberry is near death right now because, instead of adopting Android and modifying it for their purposes, they stubbornly wasted two years developing their own OS, which of course launched with virtually no apps. There is of course a parallel between than and Microsoft’s efforts, except the latter is more resourced, so the delay was not fatal, but its productiveness is still questionable.
In the end Android is just an OS layer, and even if you are forced to bundle Google’s services to get to their app store, it still remains very customizable and modifiable.
In Microsoft’s great tradition, they could embrace and extend Android, preload their handsets with Microsoft’s services such as Bing, Office, Outlook, Lync, Skype, SkyDrive and great integration with Windows, and make their phones the only ones to have the best of what both Google and Microsoft has to offer.
Now the counter argument to this is building your house on the foundation of others is very risky, as Google could yank out the carpet from Microsoft at any time, via important terms and conditions or API changes. The two companies are after all mortal enemies, and by itself it may be enough reason not to go down this road.
Interestingly we are seeing the same scenario play out between Google and Apple. Many people buy an iPhone, and then promptly download the Chrome browser, Google Maps, Gmail and YouTube, and hardly use any Apple services, meaning Google actually earns more money from iOS users than Android users. Apple is of course making efforts to evict Google from iOS, but so far it is proving quite difficult. Google shows that one can successfully set up home on some-one else’s platform, if that platform is open enough, and nothing is as open as Android.
Now none of this is denigrating my favourite mobile OS, Windows Phone. It is merely a recognition that the battle to win market share is tough, with small gains at great expense.
