Windows Could Attack Symbian OS, Symbian Could Invade Norway
By Carlo Longino, Mon Mar 01 21:15:00 GMT 2004

A report from analysts ARCchart is making the rounds today, saying that the smartphone market is going to become commoditized, and that Microsoft's mobile OS will gain on Symbian. But Symbian will still have over 40% of the market. And Linux might be strong too. Or another platform. Maybe. This report sounds like it's a $3000 way of saying anything's possible.

ARCchart says that PC and PDA makers, accustomed to those highly commoditized industries, will be able to enter the smartphone market and excel, since they have established corporate sales channels. ARC says, in turn, this will give Microsoft a boost in the mobile market, giving it a 33 percent market share, second to Symbian's 41 percent.

While certainly Microsoft will find some strength in enterprise business, ARC's confidence that the smartphone market will commoditize to the degree of the PC market is a bit premature. Network functionality may be standardized, but the differences in functionality from device to device are still, and will remain significant.

Handset manufacturers see the PC industry as their worst fear, everyone churning out boxes that are nearly identical, inside and out. They're doing everything they can to differentiate their devices from their competitors, and they're succeeding. But the real strength of the device makers lies in the significance of their brands.

Brands like Sony Ericsson, Nokia and Motorola are the strongest in the mobile industry. They're stronger than carriers' brands, and they're infinitely more powerful than any OS brand. Microsoft has figured this out with their Windows Mobile devices, and the introduction of MS-powered Motorola phones gave their efforts a major boost.

This talk strikes me as parallel to what we were hearing about a year ago with carriers saying they were going to move away from branded handsets, and now you're seeing Vodafone's CEO very publicly making up with Nokia and backing away from those statements. It's a symbiotic relationship. Vendors rely on carrier subsidies, and the carriers' customers demand the top brands.

The Symbian/Microsoft/Linux distinction is irrelevant to the majority of smartphone users. What is relevant to them is if their device is made by Nokia/Siemens/some Asian OEM. Operating system market share is going to follow the branded devices, not vice versa, and the OS and UIs these manufacturers choose will be the strong ones. Microsoft's licensing of its OS to top-tier manufacturers like Motorola and Samsung underlines this point.