IDC should stop swelling Steve Ballmer's head for things he hasn't done

Steve Ballmer

Is Microsoft's contract with analyst firm IDC up for renewal? Hey, the software giant's fiscal year ends June 30, so it could be. What else, other than group insanity, can explain IDC predicting, again, that Windows Phone will be No. 2 in smartphone operating systems come 2015? It's -- get this --  the second time IDC made such a prediction in less than two months. I guess the first time wasn't enough to get the contract signed.

Mighty Suspicious Timing


Seriously, there is inherent conflict of interest between analyst firms like Gartner and IDC, since the majority of the companies they write about also are clients. IDC has done some mighty Microsoft-friendly research or white papers over the years. But this business about Windows Phone is just too much to believe. IDC's forecast validates Microsoft's Nokia-Windows Phone distribution deal without even one handset shipped. It's sheer speculation in a market changing so fast -- Gartner and IDC are forced to revise their forecasts every couple of months (without really acknowledging how wrong they were so short a time earlier).

This second forecast (June 9) is hard to fathom so close to the other (March 29). Surely it will embolden Microsoft CEO Steve Ballmer to believe that he can turn around the company's lagging performance in the handset market. That's not good for Ballmer, given recent calls to have him removed as chief executive. I promise you that as long as Chairman Bill Gates still believes in Ballmer, the CEO isn't going anywhere else. So IDC is swelling Gates' head, too.

I so disbelieve in IDC's forecast (OK, two of them now), or at least the analyst firm's ability to make a reasonable one four years from now, that in March I promised: "If Windows Phone is No. 2 by 2015, I'll kiss Steve Ballmer's feet." I reaffirm that pledge today, but with a caveat: Assuming Ballmer is running Microsoft in 2015. Hey, IDC, now that would be an interesting prediction to make. Will it be Ballmer or someone else?

Writing for GigaOM today, Ryan Kim shares some of my skepticism: "Windows Phone 7 and Nokia have a lot of believers at market research firms. How else to explain the latest IDC smartphone forecast, which puts WP7 ahead of iOS in the number two spot by 2015, where it will trail behind Android?...The bottom line is that 2015 is a ways off. Consider how fast things have changed in just the past year...Nokia and Microsoft have to nail their execution to ensure that they have any hope of hitting 20 percent by 2015."

Strange Assumptions

I'll say. "Nail their execution" is right. IDC again assumes that the majority of Symbian smartphone sales will go to Windows Phone between now and 2015 -- all without even one handset yet being shipped and ignoring the likelihood Nokia will lose a huge chunk of its customer base to rivals Android and iOS during the transition. IDC sees Symbian's smartphone market share at 20.6 percent in 2011 and Windows Phone's at 20.3 percent in 2015. A complete switchover and nice big swelled head for Ballmer and confidence in the Nokia-Windows Phone strategy.

The forecast actually should scare the crap out of Ballmer. Nokia may become the biggest Windows Phone distributor but it's not the only one. HTC and Samsung are among the handset makers selling Windows Phone mobiles or planning to. IDC's forecast essentially allows for no organic sales growth from other Windows Phone OEMs. Perhaps that explains why Microsoft's path to second place will be so far behind the frontrunner -- by IDC's measure. The analyst firm predicts Android's smartphone market share will be 43.8 percent in 2015. That's a decrease from the forecast 48 days earlier of 45.4 percent.

Here's some more realism for Ballmer: IDC also revised downward its 2011 forecast for Windows Phone - 5.5 percent smartphone share predicted in late March and 3.8 percent yesterday. Maybe there's some sanity left at IDC after all.

The stakes are higher now than 49 days ago. IDC now predicts 1 billion smartphone sales in 2015. For some perspective, there were 1.6 billion smartphones sold in 2010, says Gartner. According to the United Nations, there are 5 billion mobile phone subscribers worldwide. Based on current forecasts, the handset market won't so much grow bigger as move to smartphones.

Dramatic Changes Coming

"The smartphone floodgates are open wide," Kevin Restivo, IDC senior research analyst, says in a statement issued yesterday. "Mobile phone users around the world are turning in their 'talk-and-text' devices for smartphones as these devices allow users to perform daily tasks like shopping and banking from anywhere. The growth trend is particularly pronounced in emerging markets where adoption is still in its early days. As a result, the growth in regions such as Asia/Pacific and Latin America, will be dramatic over the coming years."

Those areas do happen to be Nokia strongholds today, but in the dumb phone and feature phone categories people will be switching from. Meanwhile, Nokia continues to ship Symbian and without a compelling smartphone or supporting services.

I'm a bit flummoxed IDC chose to release this forecast just days after Apple announced iCloud and that iOS 5 would ship this Fall. IDC rightly identifies what's driving smartphone adoption, without applying -- near as I can see -- it to the 2015 forecast. "Underpinning smartphone growth is the rapidly shifting operating system landscape," Ramon Llamas, IDC senior research analyst says, also in a statement. "End-users are becoming more sophisticated about what kinds of experiences are offered by the different operating systems."

Apple promises a compelling experience with both iCloud and iOS. Google promises to improve the smartphone experience with Android version codename Ice Cream Sandwich. Where does IDC see iOS smartphone share in 2015? A mere 16.9 percent, behind Windows Phone. Quick, run for the door before Ballmer's swelled head fills the room!

24 Responses to IDC should stop swelling Steve Ballmer's head for things he hasn't done

  1. jbicha says:

    Typo in article title

  2. sean001 says:

    Joe, you are off again. I would change 2015 to 2013, rest the same.

    • Sparxx2k7 says:

      @sean001 - um it's not Joe that's 'off' ... he's simply reporting what IDC is reporting along with several other documents and resources to put it in a concise and readable format. Tell IDC to change the numbers, not Joe.
      Besides, it wouldn't matter if they did. As stated in the article - things have changed so fast in the last 365 day time frame that M$ has a LONG way to go to actually become 2nd place.

      • terminalx says:

        I think MS is looking to be 3rd place right now - You made some good points then you had to be childish with the M$ (ZOMG they are a company and want to make money...lets add a $ to it, its SO original and never been done before)

  3. Bladeforce says:

    does it matter? microsoft pr is so bad it doesnt matter what is said about them or him

  4. vincentw56 says:

    As much as I like my Windows Phone 7, I don't believe what IDC says. Sure I would like it to be true, but I don't see it happening. I would like to see Windows Phone 7 do better, but until it gets more mainstream, their prediction isn't going to mean much. :)

    • rrode74 says:

      This is how I "think" IDC sees it.

      Adroid is doing well, the best in terms of activations or whatever. iPhone, lots of iFans buy it and its not going away.

      That leaves RIM, Microsoft and HP (Palm). Lets face it Palm is DEAD! (HP was a fool to pay that price).

      RIM.......sorry its about the Apps for consumers and Microsoft Exchange connectivity for the corporations. They have a little of both but less than Microsoft.

      Microsoft has got the Exchange stuff going for them. WP7 is going to work better with corporations than any of them. RIM has BES but it cost $$$ especially compared to Active Sync which is free with Exchange Server. BES is a cost in addition to Exchange Server.

      While Microsoft currently does not have as many apps as Android and iPhone, at 20,000 in 7 months they pretty much have blew past HP/Palm and RIM.

      Two more advantages that Microsoft has over everyone but Adroid.

      1. There will be multiple WP7 phones on all carriers to include outside of the US. Like Android those sales of $99 (or less phones) that have the great WP7 UI and ever increasing number of Apps will add up in a year or two. This is the #1 reason Apple got left in the dust by Android in a very short time.

      2. Developers. Microsoft has more developers writing apps for Microsoft platforms than the rest put together. If you look at corporate type apps alone they will crush Apple and Android.

      I agree with IDC. I think RIM will be #4 and Palm will die and ugly death.

      • InfoDave says:

        vincent and Joe have a better idea than IDC, rrode and sean. IDC's revision comes on the heals of Nokia disappointing investors and making no promises for the future. What is IDC thinking? Nokia is getting market share taken from them on both the high and low end phones. They will continue to lose market share until long after the first Winokia phones are released

        Here's a disjoint list of other factors:

        Handset makers other than Nokia have far less incentive to offer WP7 since Winokia was formed.

        We still haven't seen sales figures for WP7, only shipped figures.

        Web OS is not bad, and HP is desperate. HP could be the first to have the same OS on PC, tablet and phone.

        Exchange means nothing since Microsoft licenses Active Sync. It's a level playing field to talk to Exchange.

        Microsoft developers are miffed at the talk of HTML5/CSS/JavaScript in Windows 8. SilverLight is not .Net, and neither platform is open. Microsoft is doing well with HTML, finally.

        Microsoft is still figuring out how to get updates out. Mango will be a good test.

        Windows will replace Windows Phone as soon as Microsoft can figure out how to do it. Windows Phone is a short term solution. No corporate entity (other than Microsoft) will buy into it.

        The competition is not standing still. In fact, they're accelerating development.

        Winokia is NoWin.

      • rrode74 says:

        "Handset makers other than Nokia have far less incentive to offer WP7 since Winokia was formed."

        And you know this and can prove this how???

        "Exchange means nothing since Microsoft licenses Active Sync. It's a level playing field to talk to Exchange"

        Exactly my point. So you run an IT department at a corporation that uses Exchange, congrats you are one the 70+% that do. So you can buy Exchange+BES server + BB devices or go with Exchange+WP7 devices. Which will save you money???

        "Windows will replace Windows Phone as soon as Microsoft can figure out how to do it."

        Yes they will with WP8. 100% of WP7 apps will run on it. To think otherwise is stupid.

      • InfoDave says:

        "And you know this and can prove this how???" Think about it, draw your own conclusions, you know my opinion.

        Exchange+WP7 devices = Exchange+iOS devices = Exchange+Android devices. Microsoft has no differentiated advantage in the phone space.

        "To think otherwise is stupid." You're calling Windows developers stupid? WP7 is SilverLight. Everything Microsoft is showing on Windows 8 is HTML, and they aren't explaining or apologizing. It will be < 100%

      • TroyGates says:

        Microsoft didn't say "exclusive" HTML5 development for Win8. They are putting it out there as another supported development environment to attract all the web developers into writing apps for Win8. .NET, Silverlight, HTML5, and any other existing Windows development language will still be available. XBox and WP7 use Silverlight at their core, Microsoft is not killing it like lots of the blogosphere are reporting.

      • rrode74 says:

        they have really showed nothing for Windows 8. Marry Joe at ZDnet has a piece about how silverlight will still be valid in Windows 8.

        Have you EVER used Andriod with crap shoot. iPhone is fine, but WP7 has and will continue to have the deepest connection to Exchange and Sharepoint. On the consumer side if you use Office, Live, Skydrive etc WP7 will be your best choice. All that crap Apple just released is different from Live offerings how????

      • InfoDave says:

        iPhone has a deeper connection to Exchange than WP7.

      • terminalx says:

        Which is unfortunate but I believe MS was more concerned with consumers this time around rather then being business

        I believe Mango will have more stuff for enterprise but they are only trickling out stuff - at the very least it will be a fantastic consumer phone, they just need to learn to market better

        WinMo was more a business OS then a consumer OS

  5. acrodex says:

    wp's success depends on win8. If win8 is a hit next year, wp's market share will bloom. when wp got an IE 10 heart, you could use all your apps across all screens.

  6. rrode74 says:

    Joe Wilcox said Nokia wont ship a WP7 this year. Nokia says they will.

    My vote is on Nokia.

    Its Joey Wilcox bash Microsoft hour again folks.....maybe Joey wont get his pay check from Apple if he does not write enough hit pieces.

    Joe Wilcox = FAIL

    • Sparxx2k7 says:

      How rude.

      Why is it when an article is written to pull in resources to display information people may or may not like (in rrode74's case, not like), that the author gets blamed?
      He is offering his opinion in very little of this article as most of it is quoting, summarizing and paraphrasing other articles around the Tech World.

      • terminalx says:

        Its because Joe is a broken record, he says the same thing over and over - its why people constantly berate him.

      • InfoDave says:

        Actually, Joe is all over the map. He's been on many sides of many arguments, depending on current events. The Joe haters are the truly broken record. They criticize him, even when it's clear they have not read what he said. They continue to follow him. Bash Joe is a pastime of many of his followers

        Sometimes I wonder if Joe and the haters are some kind of a packaged deal. The opposite of love isn't hate, it's ambivalence. If Joe wasn't good, we would go elsewhere. We would find other sources of informations. The Joe haters don't really hate Joe, they're secret admirers.

  7. rrode74 says:

    IDC and others predicted Android to surpass the 2012. NO ONE thought it would happen by the end of 2010.

  8. skimore says:

    Windows Mobile beats iOS by 2015.. If we the end user had a choice it might happen before then.. Windows Mobile 7 is very well done.

  9. rjparker1 says:

    If IDC stands for I DON'T CARE, then they are right..

    I don't give a F*CK! They can say whatever they want.. They need to justify their existence.

    I would say Nokia has a vested interest in making SURE there is a product ASAP, not 2012. If Windows get's better great for me, since I have a Windows device. If they don't.. I have to say.. Android is looking REALLY good.

  10. IT advisor says:

    Bizarre. Surreal. That's the only way to describe both Microsoft and Nokia.

    Microsoft has been fumbling the smartphone business for years. How many years of failure does it take before shareholders oust Ballmer? How many failed platfoms: PlaysForSure, Zune, Sidekick, Windows Mobile 6.x, Windows Mobile 7.. never released, Kin, and now Windows Phone at just 3% share. Ballmer in 2007 laughing that the iPhone would not sell. The guy has proven he has no idea, but the bizarre part is that he's still there.

    Nokia: Bet the entire farm on Windows Phone 7. Has anyone explained why it didn't do Android + Windows Phone, at the very least? Elop's explanation about not being able to differentiate Android is nonsensical. IDC also doesn't offer any reasonable explanation as to why Nokia will be able to sell lots of Windows Phones when Samsung could not.

    We wait and ponder why shareholders of both companies sit back and relax and watch their money flush down the drain. It's so bizarre it's hard to believe it is happening. Maybe it was just a bad dream.

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