Apple's iPhone and the Future of Microsoft

This is a very strange perspective but I think in the mobile world the iPhone is actually driving the market towards Microsoft’s (MSFST) Windows Mobile OS, and away from the current OS leader Symbian. Let’s go through the logic step by step.

Let’s stay with the thesis that one of the key differentiators of the iPhone is the presence of the MAC OS on the device, which makes the possibilities on the application side virtually unlimited, as long as we stay within the Apple (AAPL) eco-system.

Nonetheless, we have also said that the iPhone is positioned against the laptop, not the cell phone, that Microsoft has a much larger market share in the laptop OS world, and that the number of applications available on Windows is infinitely larger than those available on the MAC OS. (Of course, all this may become irrelevant if the world truly embraces hosted, on-demand applications as presented by Google (GOOG), Salesforce.com (CRM) and others, but as it stands, the world still cares about resident apps on the device.)

The above indicates the increasing necessity for a robust and full-scale OS on this convergence device, making the Palm OS, RIM, and even Symbian, gradually irrelevant. [I simply don’t see Nokia becoming a major player in the OS universe!]

In 2006, Symbian was estimated to have a 73% share of the smartphone OS market, yet ABI Research forecasts that it will fall to 46% by 2012, due to strong competition coming most notably from Linux, but also from Windows Mobile. At the moment, Microsoft, Palm (PALM) and Research in Motion (RIMM), each have very low market share in worldwide Smartphone OS. The MAC OS competition has not even started yet!

If Microsoft strengthens Windows Mobile OS, optimizes it for the killer apps on the convergence device, Apple is definitely providing the momentum needed behind the trend for the handset industry to move away from Symbian, its key competitor.

Thus, Bill Gates’ comments about the iPhone being largely irrelevant to Microsoft’s future appears to me like hogwash, since any of us would be a fool to underestimate the guy’s intelligence!

Comments

[waynethompson]

Need a big change in mobile phone and maybe apple will do it with thier new screen. I use my cell outside mostly. The sun make it hard to use and sometimes all I have is a gray screen. If the iphone with its 160 dpi and light control fixes this problem It will change the user environment and people will use it not only inside but any place. I have had about six good cell and 3 pda sony, moto, and treo nice inside but do not go outside. Try using your contact list outside, also Microsoft takes a long time to get things wright.