Windows Phone as No. 2 by 2015? Really?

IDC's ambitious forecast for coming Nokia/Microsoft smartphones spurs debate

IDC's surprising forecast that Windows Phone will surge to second place in global smartphone OSes by 2015 -- up from its current fifth place standing -- has some support from other analysts.

While several called IDC's Tuesday forecast "optimistic" for Microsoft's Windows Phone OS, they didn't entirely dismiss the prediction.

The main reason the forecast has some weight is because Nokia, now partnered with Microsoft on Windows Phone, distributed 36% of the 303 million smartphones shipped globally in 2010, according to IDC figures. That share makes Nokia by far the biggest smartphone maker, even though it is relatively unknown in the U.S.

(IDC is owned by IDG, the parent company of Computerworld.)

The 2015 forecast "is not a bad estimate..., but still a stretch," said Rob Enderle, an analyst at Enderle Group in an interview. "Nokia's reach exceeds anybody on the planet, and while they are clearly in distress, they are the most powerful. And Microsoft is throwing more money at [smartphones] and has resources equivalent or greater than Apple."

Windows Phone and Microsoft's earlier Windows Mobile OS finished in fifth place in 2010, according to IDC, making its latest forecast of Windows Phone ascendancy a subject of scorn and criticism by many -- especially Apple iPhone fans, said IDC analyst Ramon Llamas, who explained the forecast in an interview Wednesday.

In the IDC forecast for 2015, Android will be in first place with 45% of the global smartphone market, Windows Phone follows in second with 21% ,with the iPhone in third place with 15.3%. (Android will finish first in smartphones in 2011, IDC said.)

After Apple, BlackBerry from Research in Motion will be fourth with a 13.7% share in 2015, IDC said.

Even with Nokia's prowess for smartphone hardware design, manufacturing and global distribution, some analysts said Microsoft is not a proven player in smartphones. They noted that Microsoft performed poorly with Windows Mobile as a smartphone OS and hasn't performed well with early Windows Phone 7 devices by failing to include copy-and-paste functions at launch time.

"I am not sure I can see that [Windows Phone moves to second place]," said Ken Dulaney, an analyst at Gartner, who gave the most critical appraisal of the IDC forecast from several analysts. "This is predicting that Nokia will resurge past Apple and Android. I just don't think Microsoft has shown that they can get there."

Jack Gold, an analyst at J. Gold Associates, also took note of Microsoft's past performance and Nokia's general weakness in smartphones compared to its more popular -- and lower-priced -- cell phones.

"This [IDC prediction] might come about, but I think the forecast is on the optimistic side given all the turmoil and transitions that need to take place in the next four years to make this happen, and the fact both Nokia and Microsoft need to execute flawlessly -- something they have not been known for in the past," Gold said.

Nokia, which has brand loyalty outside the U.S., might not remain so popular abroad with the Windows Phone partnership, he added.

In IDC's defense, Llamas reiterated some of the same themes as other analysts. "Nokia is a world-class manufacturer, so when they click the switch on Windows Phone, it's going to be on," Llamas said.

"Nokia is well-known outside the U.S. and we in the U.S. are very westernized," Llamas added. "The iPhone really is the standard here and Nokia is not really heard of. But in all other parts of the world, Nokia is the out-and-out leader, from Latin America to Europe, Middle East, Africa and Asia. That's everywhere but North America.

"Nokia is number one, and even if they got a fraction with Windows Phone of what they got before when riding high with their Symbian OS, they will be that much better when Windows Phone is out the door," Llamas added.

Llamas also said that carriers will also want Windows Phones as a way to round out their product lines beyond Android devices, iPhones and BlackBerry devices.

Microsoft's Windows Mobile OS "didn't work" as a smartphone OS and "that set them up for challenges," Llamas said, conceding a debate point. "But Windows Mobile was a PC OS shoe-horned into a mobile phone, while Windows Phone 7 is designed for phones." The early lack of copy-and-paste functions "doesn't spell complete failure," Llamas added.

Even though IDC has Android hitting the top spot this year and staying there in 2015, Enderle wasn't so sure that will pan out. Android could be vulnerable to lawsuits from various parties over intellectual property and patent disputes, he said.

"Any forecast for 2015 really depends on Android," Enderle said. "I count 37 different lawsuits against Google over Android IP, over all bases." Google has become a target for Android lawsuits, partly because of its success, but that doesn't make the lawsuits weak.

Enderle believes that Windows Phone's biggest obstacle will be the iPhone, not the others. "Beating Apple would be a bitch, but moving around Android and RIM is very possible," he said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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