Slicing Up the Smartphone Layer Cake
Microsoft’s Nokia debacle could still lead to an ultimate success in the mobile UC market.
The smartphone market has settled into a three-layer hierarchy, important to know for anyone planning or supporting UC deployments.
This is so for two reasons. One, enterprise mobile users will need some type of UC capability, even if it doesn't include the virtually meaningless mobile offerings we have seen from the UC vendors up until now. And two, user expectations are shaped and user preferences solidified in the mobile market. Understanding what's happening there will guide you on how to excel in UC.
Apple on Top
The top layer of the enterprise mobile cake belongs to Apple. While Android dominates in the overall smartphone market, among enterprise users, Apple's share is still hovering above 70%. On top of that, Apple gets 92% of the total operating income earned by the top eight smartphone manufacturers, up from 65% last year, according to Mike Walkley, managing director of investment firm Canaccord Genuity, as reported by The Wall Street Journal.
In another article, WSJ reported that Apple is asking suppliers to manufacture a combined total of between 85 and 90 million units of two upcoming iPhone models with 4.7- and 5.5-inch displays, just like the current iPhone 6 and 6 Plus models. Continuing to develop and refine the user experience, the new models will likely feature Apple's Force Touch technology, which can distinguish a light tap from a deep press, giving users control options based on how hard they push on their screens.
However, things are not going as well for the recently introduced Apple Watch. In a previous No Jitter post, I expressed my skepticism about the Apple Watch's prospects, and early market data does show a drop-off in interest. Slice Intelligence, a digital research firm, is reporting that while Watch sales reached 1.5 million units in the week following its April 10 launch, they have now plummeted 90%, from 200,000 to 20,000 units sold per day. If you wear it, it's "fashion," and it seems not even Apple is able to make tech "fashionable."
Android in the Middle
At the Android layer, the problem is that sales don't mean profits. While Samsung overall is profitable, smartphones are dragging down those profits. WSJ has reported that the company is expecting its seventh-straight decline in quarterly profits due largely to smartphones.
A lot of the decline has to do with misjudged demand for the Galaxy S6 and the curved-screen S6 Edge. The company geared production to the expectation it would sell four S6s for every Edge model. However, the demand for the two turned out to be roughly equal, leaving a shortage of Edge models and excess inventory for the S6.
Microsoft Below... for Now?
The worst news is hitting at the bottom layer, where Microsoft last week announced it is taking a $7.6 billion write-down on its $9.4 billion investment (81% of value) in Nokia and laying off some 7,800 workers. Clearly the plan crafted by former CEO Steve Ballmer to emulate Apple's strategy of controlling both the mobile device hardware and software has not played out. To his credit, current CEO Satya Nadella is not flinching when it comes to making tough moves.
The Windows Phone market share is wallowing around 3%; with little developer support, that figure is not likely to improve in the foreseeable future. Ironically, the abysmal failure of "Ballmer's Folly" might just hand Microsoft the strategy it needs to succeed in mobile -- swallow your pride and bet on the winners.
Microsoft is a software company, and its success in mobile should never have depended on its having its own mobile operating system; it rests on its ability to have Microsoft software running (and running well) on as many platforms as possible. This is all the more true now that the number of smartphones and tablets in use far exceeds the number of desktops and laptops.
For now, Microsoft's iOS implementation is far superior to its Mac offerings, and that is particularly true of Skype for Business; the Skype for Business app on my Mac crashes roughly a dozen times a week, mostly when coming out of sleep mode, while the iOS version never fails.
If Microsoft were to get in front of Apple on mobile devices that merge the Mac and iOS, then this layer cake could potentially change into an upside-down cake. One of Microsoft's more creative ventures has been the Surface Pro 3, a tablet-cum-laptop that can fill a significant niche for enterprise users. In the Apple world, the Mac and the iPad are integrated but, in the end, totally different platforms.
Now Microsoft is offering Office versions that work surprisingly well on iOS devices. Of course, iOS still lacks a meaningful file management system, but a cloud-based file solution like Microsoft OneDrive in combination with a functional Office on iOS and any of the detachable keyboards for iPad could add up to a Surface 3 Pro-like option for the Apple world.
In the eight years since the iPhone launched and revolutionized the smartphone market, we have seen any number of twists and turns. What has not changed is the fact that user expectations are now shaped by the mobile world, and the traditional desktop/laptop universe has had to struggle to keep up. User experience is the key to technology adoption, and the mobile device experience has set the bar high.