Risk-Averse Enterprises May Favor Windows Phone 8

By Wayne Rash  |  Posted 2012-09-01

Windows Phone 8 Gets a Chance to Shine as Apple, Samsung, Google Squabble

It's no secret that Microsoft's share of the mobile phone business is tiny. Most estimates I've seen put it at around 4 percent, which is by far the smallest market share of any of the major companies with phone operating systems.

Even beleaguered Research in Motion is running around 17 percent. The big dogs these days are Apple and Android, with Google's OS apparently getting something like half of all sales worldwide (it depends on whom you ask).

So what's the reason for the sudden interest in the new Samsung version of Windows Phone 8? Why the leaked photos of the new Nokia Lumia 920? Or what about the HTC Accord which was also just leaked? Clearly, there's growing interest in Microsoft's Windows Phone 8. But why?

The obvious answer is the indeterminate state of the global series of Apple-Samsung mutual lawsuits, with victories going to both sides, sometimes for the same patents. It's clear that nothing will be settled with these suits for a very long time, and even if Samsung ultimately loses, the allegedly infringing products will have been long since withdrawn from the market by the time the last appeal is exhausted. The same is true if Apple ultimately loses. In other words, when these suits wrap up sometime in the next couple of decades, the results won't matter at all.

But the lawsuits, partly because of their global stage, and partly because of the inconsistent verdicts, introduce uncertainty. Uncertainty raises the perceived risk and if there are two things that large companies hate, they are risk and uncertainty.

While consumers mostly care about whether a phone is cool, or whether it fits their budget or is available from their favorite carrier, big companies are different. CFOs and CIOs are unlikely to care whether a phone is cool, which is one reason so many large enterprises still buy RIM's BlackBerry models. But they do care whether they can be assured that there will be a continued supply of the phones they choose to support in their enterprises.

Some big companies are a lot more exposed to risk in the smartphone market than others. The most exposed are wireless carriers, who are just as risk-averse as any other large enterprise. This means that if there's uncertainty in either the future supply of the devices they carry, or worse, if a court decides that their existing inventory can't be sold, then the carriers want to have a place to go for their supplies of smartphones.

Risk-Averse Enterprises May Favor Windows Phone 8

As popular as the iPhone is, Apple does not provide a safe haven. First, Apple has never been particularly enterprise-friendly. After all, Apple is focused on consumers, and while it watches over their interests, it doesn't provide enterprises with the management tools, the security or an easy process for creating custom, enterprise-focused apps.

Second, while the iPhone faithful will likely buy some 2 million iPhones on the first day of sales, the design is getting a bit long of tooth. Today's iPhone 4S doesn't look greatly different from the original iPhone. And while the iPhone 5 will have a different screen aspect ratio, it'll still look a lot like every other iPhone. The biggest difference is that all those iPhone accessories you have now won't work. Worse, the supply of iPhones may be limited at first as screen production is apparently lagging.

Android devices have their own risks. Corporations see everything from fragmentation to the susceptibility to malware as a risk. Carriers worry that they may be stuck with phones they can't sell. This is where the attention turns to Microsoft and Windows Phone 8.

Carriers like Microsoft because it's not Apple. Microsoft doesn't demand big subsidies from the carriers for every phone they sell, and it doesn't demand royalties that cut into profits. Enterprises like Microsoft because the company has been a reliable partner for years, and it's usually delivered products that were designed with the enterprise in mind (except for occasional slips, like the Kin phone).

Consumers also seem to like well-designed Windows Phones. AT&T sold every Lumia 900 it could get its hands on, effectively causing a worldwide shortage of Nokia phones when it was introduced in the spring of 2012. T-Mobile has no problem selling Lumia 710 phones, despite their small screen size.

Now, the leaked photos of new Windows 8 phones are showing some very sleek devices that don't look like iPhones, but that in fact seem to be more modern designs. The new Windows 8 phone from Samsung is said to be incredibly thin. The new Windows 8 phones from Nokia and HTC seem to have nearly eliminated the bezel, and appear to have screens that reach to the very edge of the phones.

Now what Microsoft needs to do is get its manufacturers to get enough phones into stores to satisfy demand, set prices so that they are clear alternatives to the current crop of Android and Apple phones, and create a collection of compelling apps in the Microsoft store and strong sales will likely result. This could be Microsoft's moment, but everything has to come together just right and that appears to be happening–so far.

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