Five Reasons Microsoft Should Be Worried About Android

When the Motorola Droid, powered by Google’s Android OS and serviced by Verizon, made its US street debut on 5 November, the comparisons immediately started between the new smartphone and Apple’s iPhone. Fueling the argument was Verizon itself, which launched a series of head-to-head advertisements that emphasised certain Droid functionality – such as the ability to run multiple applications simultaneously – that Apple’s device currently lacks.

Yet Apple may not be the company most affected by Android; as Google’s operating system gains traction, Microsoft could be the one finding itself firmly in the crosshairs.

Microsoft’s Windows Mobile operating system – currently in Version 6.5 but expected to upgrade to Version 7 at some point in 2010 – may end up being the most vulnerable to the rise of Android. Unlike Apple and other companies, Microsoft depends on its operating system and attendant software being ported onto multiple devices offered by multiple manufacturers and carriers – something that has the potential to be a huge advantage in terms of mobile OS market share, unless a stronger competitor enters the ecosystem.

Android’s Market Share Is Climbing – Fast

The Symbian operating system, present on a wide variety of Nokia phones, is not proving to be that competitor, with data suggesting that its market share has fallen from 59 percent in October 2008 to 27 percent in October 2009. That would ostensibly represent good news for Microsoft in its attempt to claim the multiple-device space – except that during the same year-over-year period, Windows Mobile has also seen its market share drop by around 70 percent, according to recent AdMob data.

Microsoft knows that it has a problem. During Microsoft’s Venture Capital Summit on 24 September, CEO Steve Ballmer reportedly suggested that his company had “screwed up” on Windows Mobile and publicly wished that Windows Mobile 7 had already launched. Windows Mobile 6.5, released in the US on 6 October and boasting improvements including expanded touch capabilities, is supposed to operate as a sort of stopgap measure until then.

In theory, Mobile 6.5 would stop the erosion in Microsoft’s mobile market share, before the newer-and-more-improved Mobile 7 comes onto the scene to do hearty battle with the iPhone and BlackBerry. But Android is putting pressure on that model, with the AdMob data suggesting Google’s market share has climbed 1,000 percent in the past year.

That sort of growth rate will attract more manufacturers to embrace Android for their newer phones. Microsoft previously announced that Mobile 6.5 will be present on 13 phones, including ones by LG Electronics, HTC and Sony Ericsson, by the end of 2010. Andy Rubin, Google’s senior director for mobile platforms, previously estimated that the Android operating system could be running on 18 to 20 devices by the end of the year; even if you consider the source and chop that Android number in half – and given that everyone from Nokia and Motorola to Acer and Dell are all either building or considering Android phones, that’s conservative – it still represents a substantial number of Android OS phones crowding the ecosystem.

For Microsoft, it’s one thing to try to improve the fort while no enemy forces are around, but it’s much harder to repair your gates and restock the cannon when the enemy is busy scaling the walls.