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10/26/2010

No Such Thing as "Late" in this Fast Moving Mobile Ecosystem - But the Stakes are High

The mobile ecosystem added more moving pieces this month with the release of two new OS platforms. Microsoft's long awaited Windows Phone 7 and HP's updated webOS 2.0 platforms have arrived. Both companies are actively expanding their carrier rosters/geographies. Whether Microsoft learned from its failure with its Kin, and if the Palm acquisition gives HP a vehicle to succeed in the Smartphone market remain to be seen–what is abundantly clear is that both of these heavyweights are deeply invested in the success of their new platform. While Apple, Google and RIM have captured significant market share, churn and competition between carriers (and the financial commitment) give both platforms an opportunity to not only participate, but to also gain new customers. The real "x-factor" is the applications–how important is the level of investment in applications a consumer has made on any given platform.

"Stickyness"

There has been a lot of discussion on app fatigue (meaning that an application's usage decreases over time). For example, while Foursquare, a popular application for "checking-in" to various venues continues to see it's user base ramp, the company must constantly be cautious of its users growing tired of the application. Today, in our view, the "stickyness" isn't there - particularly for the mobile applications aimed at consumers. So does the $50 I spent on mobile applications lock me in on a particular platform (as a consumer)? Maybe, for a certain amount of time, but it's a given that applications will continue to evolve and become more sophisticated and powerful devices will emerge and vie our attention / share of wallet–hence the opportunity for Microsoft and HP.

The Business Environment is Different

As the usage of mobile applications in enterprise environments continue to ramp and employees continue to bring their personal devices into the workplace, we see the equation around application "stickyness" being enitrely different in enterprise environments. When businesses make investments in mobile platforms, IT infrastructure, business process / workflow mapping and integration, they are making a commitment. By default, device management and security are mandatory in these environments, along with the ability to customize and upgrade applications. These investment levels and hardware (device) commitments translate into application "stickyness", as the pain involved in moving to new applications can be significant. Enterprises will always be challenged by application lifecycles, however growing tired/bored of the application isn't an option in these environments as the applications are integrated into corporate systems, and are required tools for conducting business.

The Challenge

So, while there is a window of opporuntity for both Microsoft and HP, the challenge will be to capitalize on the lack of app "stickyness" and to get software developers developing on thier respective platforms. Additionally, both will need to get carriers to promote their respective products. In aggregate, if I had to summarize all of the reviews/blogs I've read, I'd say that (generally) both platforms have received positive coverage. Indeed, both platforms are differentiated in terms of their UI, with very slick multi-tasking capability (Microsoft calls this "live tiles," HP calls it "stacking"). In terms of hardware, the current feature set for both platforms is comparable to the competition, and while both platforms seem to be off to a good start - many technology journalists are saying that Windows Phone 7 is Microsoft's "last chance" to be relevant and to compete against the likes of Google and Apple - they also knock both platforms for not having enough applications. While being "late" to a market can be a disadvantage, it definitely can work both ways - we'll be watching.

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