A partnership with Nokia (which dumped Symbian in favor of Windows Phone 7) and the demise of HP's webOS may help, but predictions from analyst firms IDC and Gartner that Windows Phones will top the iPhone in market share by 2015 were surprising to many. Even after the Bada numbers came out, Gartner stood by its prediction that Windows will become the No. 2 mobile platform behind Android by 2015, although it said the turnaround will not start immediately and will happen mostly outside of the United States. Even this optimistic scenario depends on the vast majority of Nokia Symbian users switching to Nokia Windows phones, instead of the more popular iPhones and Androids.
"The question, again, is Nokia Windows Phone 7's white knight?" Miller says. "I think Nokia makes some brilliant hardware, but I'm not sure it's really enough to pull consumers in."
Developer interest in the platform will, as always, be crucial. One challenge is that instead of scaling its phone OS up to tablets, Microsoft has chosen to adapt its desktop OS to potential iPad competitors. This means applications built for Windows phones will be difficult to port to Windows tablets. Microsoft is set to release more details about Windows 8 in September at its BUILD conference, and this is one question Miller believes the company should address. "My hope is we will see something about app unification at BUILD," he says.
Microsoft's response: Microsoft declined to comment about Windows 8, and did not answer questions about Windows Phone 7 market share or the application development issue. Instead, Microsoft released this statement:
"*IDC has forecasted that Windows Phone will be the number two operating system worldwide by 2015. (IDC, March 2011)
*The Samsung Focus running Windows Phone 7 was voted the favorite AT&T smartphone in PC Mag's Readers Choice Awards. 'The Samsung phones had better reliability and call quality and were also noted as being the best for gaming: Windows Phone 7 devices come with Microsoft's excellent Xbox Live.' (PCMAG.com)
*There are more than 45,000 registered Windows Phone developers.
*Customers have access to nearly 30,000 apps and games on Windows Phone Marketplace, with an average of 100 added each day."
4. The desktop
Arguing that Windows is a weakness takes some work. Really, it is a potential weakness, but an important one because it is also Microsoft's greatest strength. The 80 percent to 90 percent market share Windows holds on desktops and laptops is the reason Microsoft has direct access to most of the personal computing users on Earth, so even small percentage drops in sales are problematic. Windows 7 has sold more than 400 million copies, but revenue declined 2 percent in the fiscal year that ended June 30.
While Windows 8 will be optimized for both PCs and tablets, Microsoft is holding off on any big announcements regarding the next OS until the BUILD conference in mid-September.
"With a $32 billion chunk of Microsoft's business (Windows Client and Office combined) dependent upon Windows 8's long-term success, it is a fair statement that Windows 8 may well be one of the biggest bets any company has made in a long time," Gillen writes in a new IDC paper titled "Getting Back in the Game: Can Windows 8 Reverse Microsoft's Position?"