Take a closer look at
IDC's latest data
on the smartphone market and you'll find several interesting
tidbits. For me, nothing is as interesting as the
Android vs. Windows Phone battle
at the low-end.
, as it tends to do, is staying above the fray.
How will it all play out? No one can be 100% sure, but my
personal belief is that
needs to switch its strategy or risk paying a dear price to win
over customers who might otherwise gravitate to Android.
The world's most dangerous robot
Again, look at the data. No one matches up with
in this market. Android vs. Windows, iOS,
... they're all losing share, and in Q2, only Apple shipped more
Android is dominating the global smartphone market. Source: IDC
Worldwide Mobile Phone Tracker, August 14, 2014. Figures may not be
exact due to rounding.
Notably, Apple took a 3% hit on iPhone selling prices in the
second calendar quarter. But at $561.06, the iEmpire's average
handset wasn't exactly priced like a cut-rate Android device.
A May report
from IDC pegged the average 2014 selling price for Android handsets
at just $254, dropping to $215 by 2018. No wonder so many opt for
A squishy strategy for Mr. Softy
Microsoft is caught in a different position. Windows Phone is
billed as the functional equivalent of iOS, with
the talking assistant
to prove it, yet Mr. Softy also sells a variety of lower-end phones
by virtue of its acquisition of Nokia's handset business.
Declining share and lower shipments suggests the mix is
confusing to buyers. CEO Satya Nadella touched on the need for
developing a more consistent message in
a July strategy memo
to employees: "We will
make the market for Windows Phone, which is our goal with the Nokia
devices and services acquisition." [Emphasis added.]
How much investment amounts to responsibly making the market
isn't yet clear. If IDC is right, there's plenty of work to do. The
researcher's study of the market found that 61.4% of Windows Phone
handsets sell for $200 or less off-contract vs. 58.7% for Android
Look elsewhere for a catalyst
As you might expect, Microsoft isn't making much from Windows
Phone right now--only $54 million on $1.985 billion in fiscal 2014
hardware sales, to be specific. That's a gross margin of just 2.7%.
Add in marketing, distribution, and related operating expenses, and
it's likely Mr. Softy is selling most handsets at a loss. Nadella's
careful wording about Microsoft's future bets on Windows Phone make
sense when you look at the financials. And yet he isn't ruling out
handsets altogether. Instead, he sees them as platforms for selling
"Going forward, all the devices will be created with an explicit
purpose to light up our digital work and life experiences," Nadella
said in the fourth quarter earnings call held last month.
"Good examples of this today are what we are doing with
Surface Pro 3 for note-taking and PPI for meetings. You can expect
to see this type of innovation in our hardware, including
Is that a retreat? Whatever it amounts to practically, Nadella
is apparently no longer interested in a straight-up Android vs.
Windows Phone war. Given the toll it's already taken, I'd say
that's welcome news for investors.
Leaked: Apple's next smart device (warning, it may shock
Apple recently recruited a secret-development "dream team" to
guarantee its newest smart device was kept hidden from the public
for as long as possible. But the secret is out, and some early
viewers are claiming its everyday impact could trump the iPod,
the iPad. In fact, ABI Research predicts 485 million of
this type of device will be sold per year. But one small company
makes Apple's gadget possible. And its stock price has
nearly unlimited room to run for early in-the-know investors. To
be one of them, and see Apple's newest smart gizmo, just
The Next Big OS Battle: Android vs. Windows
originally appeared on Fool.com.
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