Microsoft CEO Steve Ballmer believes his company’s plan to release a revamped operating system (OS) for smartphones, Windows Phone 7, will propel them into the race for smartphone OS market share and the advertising treasure the leader will enjoy. Apple and Google have seen their OS and the devices running on them rapidly erode long time cell phone leader Nokia’s dominate position. Nokia has finally taken their blinders off and has recently released a new version, Sybian 3, of their OS. One would have to go all the way back to 2006 to find Nokia’s last smartphone success, the N95, since that time, Apple’s iPhone, released in 2007, has been gaining ground as has Google’s Android released in 2008.
In my previous blog on this topic, Mobile Search and Mobile Advertising, I provided charts outlining the leader board for the smartphone OS and mobile advertising spending with projections. I noted the absence of Mircrosoft and that they would act quickly to get into the race. Microsoft has taken a two prong approach to gaining on the leaders. The first is with their innovating new OS, the second is with their legal muscle as exhibited by their patent lawsuit against Motorola. The stakes are extremely high for all the players in this space, as is the reward. Will a rash of legal maneuvering and the negative press of a patent lawsuit against an open source backed OS be effective in product promotion for Microsoft? I’m not sure the legal approach is going to help Microsoft’s image or convince the public to purchase a device, nor is it going to assimilate developers and we all know that the applications which run on top of the OS are the steroid for these entrants in the race.
In the graph below take a quick look at how the OS race has been playing out during the first three quarters of this year; it clearly shows a steady player, one that rewards developers via low cost of entry due to being open source and few restrictions, Android and Google.
I like the fact that “Do no evil” is the corporate motto and have trusted the search engine giant for years. They continue to innovate and refine their services, an important attribute an application developer considers when picking a development platform, since they rely on a steady stream of income from their applications. Google’s AdWords is the dominate search engine marketing vehicle, and I believe they will continue to refine it to allow all size businesses equal access to the mobile advertising market. Keep your eye out for more articles on this dynamic, fast growth industry news. We will.
Three years ago Apple released the first iPhone, and mobile advertising will never be the same. The Apple orchard has continued to grow its’ market share of the smart phone niche and now owns roughly, 28% according to Nielsen survey.
Last week the Apple iPhone 4 went on sale with analysts projecting 1 million to 1.5 million units would be sold in the first three days, compared with 1 million during last years launch of the 3GS. The Apple faithful that were upgrading their device represented 77% of the iPhone 4 sales.
Advertisers are aware of this growth, are anxious to tap into these markets and get their content into these smartphones. Just one problem – Apple’s strict control of the applications (apps); these apps will be the vehicle for advertisers to reach this valuable market of tech-savy leading-edge gadget buying consumers.
Apple has truly gotten everyone’s attention, including the U.S. Federal Trade Commission, which will investigate whether Apple Inc.’s practices are harming their competition. Wow, in just three short years, Apple has enraged the folks at Adobe over its choice to ban Flash video technology in favor of the HTML5 standard. Google has also complained about being shutout of the market place for presenting ads inside the iPhone, due to restrictions placed on the developers of the highly prized apps running on their devices. AdMob’s founder and now Google vice president Omar Hamoui said in a blog post, “if enforced as written, would prohibit app developers from using AdMob and Google’s advertising solutions on the iPhone.” He added Apple’s rules “hurt both large and small developers by severely limiting their choice of how best to make money.” These conflicts reinforce the fact that mobile advertising represents a huge potential market worth fighting for.
How this will all play out remains to be seen, but one thing we can agree upon is that it is worth monitoring. Keep your eye on the news out of the MicroSoft camp and their recently released mobile operating system. How will Yahoo place it’s content on these smartphones? Does Yahoo CEO Carol Bartz have a plan of attack via a deal with Nokia to provide email and chat services? I’m sure the next three years will bring more excitement and opportunities for savy internet marketing professionals, and the entrepreneurs mining these channels.