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Hey, Wait a Second -- Don't Write Off Microsoft-Nokia Smartphones Just Yet

IDC has predicted that by 2015, Microsoft (MSFT) Windows Phone will take nearly 21 percent of the mobile-phone operating system market because of its adoption by Nokia (NOK). Naysayers dismiss the analysis as either overly optimistic or just plain bunk. They are wrong.

Look, it's way too early to write off the Microsoft-Nokia partnership and assume that the future belongs to a war between Google (GOOG) and Apple (AAPL). Windows Phone certainly isn't guaranteed to succeed, but it has a decent chance thanks to consumer buying habits and the realities of merchandising.

Here are IDC's projected numbers (click on the graph to enlarge):

Android has gained enormous ground, and if IDC is correct, it'll take even more. A big reason for the advance is that Google used a Microsoft PC strategy: spread your operating system bet across multiple hardware vendors and increase the chance of consumer favorites.

Such critics as my ZDNET colleagues Mary Jo Foley and Larry Dignan argue that in such a volatile market, four years is too long a time to predict, and that is true. (Four years ago, the iPhone had just launched, and handsets running Android didn't even exist.) The accuracy of the projection is a big question. But Dignan argues that current owners of Nokia handsets that run Symbian might not like Windows Phone:

Windows Phone 7 may not appeal to all Symbian users. How do you assume that most Symbian users will go to Microsoft? Because Nokia says so? The logic doesn't work. Symbian users are likely to watch iOS, RIM's QNX and Android too. Peer pressure may play a role also.

That's where they make a mistake. Outside of a small percentage of technophiles, consumers don't buy operating systems. Most would be lucky if they could name the one on a given phone. In a poll last fall, the Pew Research Center found that only 26 percent of Americans knew that Google's smartphone operating system was Android.

Consumers buy products, experiences, and company brands. When regular people talk about smartphones, the conversations center on models, not operating systems. They want an Apple iPhone 4 or maybe a Motorola Droid X, an HTC Aria, or even, yes, a BlackBerry from RIM (which continues quarterly unit sales growth even as the cognoscenti write it off). They're interested in past experience with the phone manufacturer and whether a given unit wows them. The status the phone can convey (just like any consumer purchase) may attract them, either consciously or subconsciously. The carrier might offer a deal.

Other factors, including an existing company's ability to use its bulk to drive what it wants, also help influence what happens in the market. What happens if patent infringement lawsuits scare off hardware vendors from using Android? There's already evidence that Motorola is making back-up plans. Maybe that has something to do with being sued by both Apple and Microsoft over its use of Android.

There is also the marketing power of the handset vendor. Nokia hasn't been the largest global seller of handsets for no reason. The company has played the game long and successfully and knows how to advance its interests with carriers and retailers. There's something to be said for getting your products in front of people, and Nokia can clearly do that. And if Nokia has the muscle to crowd out enough competition, Windows Phone will improve by default.


Image: morgueFile user alvimann.

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