Windows Phone 8 vs. BlackBerry 10: Which one has a greater chance of success?
Microsoft's (NASDAQ:MSFT) major push to grab market share for its Windows Phone 8 platform is getting under way this week, with support coming from AT&T Mobility (NYSE:T), Verizon Wireless (NYSE:VZ), and T-Mobile USA in the United States. Meanwhile, Research In Motion (NASDAQ:RIMM) said it will hold a launch event Jan. 30 to officially unveil its BlackBerry 10 platform, which is currently in testing with more than 50 carriers worldwide.
The timing puts the platforms on a collision course as Microsoft and RIM try to win the hearts of carriers and consumers by becoming the "third ecosystem" behind Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iPhone.
Carriers likely will support both Windows Phone 8 devices and BB10 phones. The question is, which platform has a greater chance of success?
Microsoft is going to market not only its Live Tiles and personalized user experience, but how Windows Phone 8 is tied to Windows 8 and the cloud, and how documents and experiences can be shared across platforms and devices. RIM is going to emphasize its BlackBerry Flow user interface and how it improves productivity and makes the smartphone experience more seamless, as well as the advanced keyboard function on BB10.
The challenge, of course, is getting carriers to buy into these visions and then promote them heavily and consistently. Executives I spoke with at both Microsoft and RIM said the response they've received from carrier partners for their platforms has been strongly positive. They also both said they are working with carriers to allow them to customize the platforms by adding their own cloud-based apps and value-added services.
Click here for a video demonstration of BlackBerry 10.
"A lot of partners are really, really concerned about that 80 percent of purchases that go to two vendors," said Rick Costanzo RIM's executive vice president of global sales, alluding to the fact that Apple and Google are currently the dominant smartphone platforms. He noted that about one-fourth of RIM's carrier partners want exclusivity agreements.
Microsoft, for its part, is banking on renewed carrier support for WP8, especially from Verizon, which so far has released just one Windows Phone. Greg Sullivan, senior product manager for Windows Phone marketing, said that Microsoft's carrier partners are excited about new, high-end WP8 hardware from the likes of Nokia (NYSE:NOK), HTC and Samsung. He also said Microsoft learned from previous Windows Phone launches that there needs to be a sustained marketing push beyond the initial launches, and that Microsoft's partners need to continually refresh the Windows Phone portfolio to keep momentum going. "It requires more than a 'show up at launch' approach," he said. "You have to have sustained communication around the value proposition. We'll continue to have that."
While it's not surprising that both companies feel confident about their chances, the question is will they both succeed? Ross Rubin, an analyst at Reticle Research, believes that RIM has more of a challenge because of its dwindling mindshare and the sense that the platform has lost momentum. Microsoft also has greater financial resources than RIM. Yet Rubin noted that RIM still has a large subscriber base (80 million), a strong brand name and deep ties to carriers.
IDC analyst John Jackson believes that the near-simultaneous launch of both WP8 and BB10 could spell doom for the companies. "If the past is a predictor of the future, the operators have not historically done a great job putting their money where their aspirations for a third platform is," he noted, adding that operators have a limited amount of ad dollars to spends marketing a third platform. "The worst case is that both platforms' opportunity is compromised due to the fact that they are coming into the market at the same time."
I think that this is going to be a marathon and not a sprint. We shouldn't be as focused on first-weekend or first-quarter sales of devices as we often are. In order to succeed, both Microsoft and RIM are going to need to get their operator partners and retail sales channels to not just want to sell their devices on opening weekend, but the month after, and three months after that.
I want Microsoft and RIM to succeed. Having played with both Windows Phone 8 and BB10, I think they're innovative platforms that deserve a look from carriers and consumers. Now the platform vendors need to convince the carriers that they're worth it for the long haul. --Phil