b2ap3_thumbnail_apple_microsoft_lag_behind_in_mobile_400.jpgOf all the computer company rivalries going on, one of the largest and most well known is Apple vs. Microsoft. The storied competition between these two software giants has driven innovation forward for more than thirty years. Today, the frontlines of this battle take place between the two company’s mobile divisions, and now there’s a third major competitor in the mix.

The Role of Hardware and Software in Mobile Market Shares
One of the ways success is measured in this battle is by comparing market shares held by each company’s operating system. Although, this can be a difficult comparison to fairly make because Apple is unique in that it makes its own software (iOS) for its own mobile devices. Therefore, Apple can sell fewer units and see greater profits.

Then you have Microsoft, which has traditionally been a software company. Over the years, Microsoft has released their own hardware equipped with their own software, but their efforts haven’t been as nearly well received as Apple’s. In fact, Microsoft’s latest and most-marketed hardware/software mobile device combination, the Surface Pro, has been an unmitigated disaster, losing the company $1.7 billion since its release in 2012.

Smartphones are Dominating Mobile Computing
In 2007, Apple’s iPhone changed the mobile computing landscape. Prior to the iPhone, mobile computing was primarily associated with bulky laptops. The iPhone gave users a powerful and functional touchscreen interface that’s small enough to fit in a user’s pocket. Apple’s iPhone set the mold for mobile computing and users now have the expectation for every mobile device from every company to match the iPhone’s sleek touchscreen design–much to the chagrin of company’s like Blackberry.

Despite Apple’s initial dominance in the smartphone market, both Microsoft and Apple are now playing catch-up to a competitor that’s come out of nowhere and captured over 80 percent of the market share. Of course, we’re referring to Google with its Android operating system. This isn’t to say that both Microsoft and Apple are faring poorly in the smartphone arena. Both companies are seeing profits, but the smartphone OS market share enjoyed by Android far exceeds that of its nearest competitors–good ol’ Microsoft and Apple.

A look at smartphone developments over recent years show us a lot about what consumers have come to expect from mobile computing. Smartphones have become the preferred device for mobile computing, as evidenced by the fact that 58 percent of Americans are now smartphone owners. That’s quite the accomplishment for a device that’s only been in the public eye for seven years or so. However, despite the head start enjoyed by Apple with its iPhone boom, iOS is now lagging behind Android in the mobile OS market share.

Microsoft is Down, But Not Out
Microsoft is still in the mobile computing game. Some consumers may be surprised to learn that Microsoft actually released smartphones before Apple’s iPhone. Microsoft’s Palm Treo 700w ran an OS called Windows Mobile, which was essentially a scaled-down version of Windows CE. During the days of the Palm Treo, Microsoft had the most popular mobile OS on its hand; that is, until Blackberry came around.

Microsoft’s current mobile OS strategy is to use its Windows Phone 8 and 8.1 OS in conjunction with newly acquired hardware from Nokia. A strategy that cost Microsoft $7 billion for Nokia’s cellular phone division to be a part of Microsoft Mobile. With this acquisition, Microsoft hopes to see the same level of profits Apple enjoyed from controlling both the hardware and software side of things.

To give you an idea of where the smartphone market is currently at, consider that both Apple’s iPhone running iOS, and Nokia’s Lumia line running Windows Phone 8.1, account for less than 18 percent of the 287 million smartphones shipped in Q1 of 2014. Apple iOS comes in at number two behind Android, but it’s a distant second as Android continues be installed on sleeker and more powerful devices that cost less.

The Tablet’s Role in Today’s Mobile Computing Picture
The other major part of the mobile computing equation is tablets. According to Gartner, tablets are expected to outsell PCs by 2015. Apple is performing stronger in the tablet realm when it comes to competing with its Android foe. In fact, iOS holds almost the same market share as Android for tablet sales. However, even with tablets, Android is making big gains and cutting into Apple’s dominance. Since the iPad was released in 2010, its top spot went unchallenged until Q4 of 2013 when Android finally caught up to it.

Today, Apple is still seeing greater profit margins than Google due to controlling both the hardware and software side of its popular iPad, whereas Google’s tablet success comes from their Android OS being the go-to third-party manufacturers looking to offer consumers with a cheaper alternative to the iPad. This trend of Android cutting into Apple’s tablet market share should continue as more manufacturers use the open source Android platform to develop new devices that meet consumers’ needs.

Even though Microsoft saw big losses with its Surface tablet, their market share rose over 100 percent in 2013, and they’re in third place in tablet sales. Unfortunately for Microsoft, this is a distant third as they sold only 4 million tablets equipped with Windows Phone in 2013, compared to 121 million Android-based tablets and 70 million iPads sold during the same timeframe.

What’s the Future Have in Store for Mobile Computing?
The future of mobile computing may be looking up for Microsoft. Mark Fidelman, CEO of Raynforest and contributing writer for Forbes, is one analyst that sees potential for Microsoft to make huge gains in the near future. Fidelman writes:

As Microsoft rolls out its integration capabilities to business people across the enterprise through Office 365 and Windows 8.1, and to customers on the Xbox, Microsoft will pick up a lot of new users that are looking for seamless app integration across their business and home lives. Most people will not want their information stuck in separate operating systems for much longer.

As Apple and Microsoft continue their storied battle, one thing is clear. On the mobile front, the Android OS is king and it threatens both Apple’s and Microsoft’s business models. There are even rumbles in Silicon Valley of collaboration between the two software giants for the purpose of dethroning Google. For example, it’s now possible to get the Microsoft Office Suite on Apple’s iPad. This kind of partnership was deemed unthinkable just a few short years ago. Whatever the future of mobile computing has in store, Iron Edge will be there to help guide your business toward finding the best solutions for your mobile needs.

Do you have an opinion on this mobile battle? Do you prefer Apple, Microsoft, Android, or even Blackberry? Pick your side and sound off in the comments.

This entry was posted in Uncategorized. Bookmark the permalink.