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Smartphone wars: Analyst sees threat from WP7

Smartphone wars: Analyst sees threat from WP7

Success with WP7 would hurt Android, help iPhone

A prominent Wall Street analyst declared Friday that Windows Phone 7 has seen a "successful launch" and that Microsoft will heavily market the new platform further, leading to a possible pitched battle against Android smartphones that would leave the iPhone on top.

Whether WP7 has really experienced a successful launch has been widely debated. Random spots checks with retailers in the U.S. and U.K. have shown somewhat limited sales, as well as some supply shortages. There's also been little initial commentary on early WP7 success by either Microsoft or AT&T, the U.S. carrier with the most WP7 phone models.

However, the analyst, Charles Wolf of Needham & Co., called the Nov. 8 launch of WP7 in the U.S. "successful," after earlier launches abroad. But Wolf noted that only 135,000 active users were on the WP7 Facebook app on Nov. 30, a possible indication of the number of WP7 phones sold at that time. His research was first reported by AppleInsider.

Even so, Wolf argued that Microsoft will use its planned $500 million WP7 marketing budget to "buy the support of the leading smartphone manufacturers." While he said there's been some WP7 launch success, he said if WP7 is ultimately successful, there will be fallout for the Android OS more than any other smartphone platform.

In the event of a battle between WP7 and Android, iPhone would win out, he concluded.

"With its growing brand equity, the iPhone could end up as the last man standing in this race to the bottom," Wolf added.

Wolf's analysis brings many factors to bear in the smartphone platform wars, including how Android and WP7 both work with a variety of manufacturers such as HTC, Samsung, LG, Motorola and Sony Ericsson, while Apple alone manufactures iPhone, a model also followed by Research in Motion with its BlackBerry OS.

Wolf said that if WP7 is ultimately successful in coming months, "it's difficult not to conclude that the Android platform will be impacted more than any other operating system because of the similarity of the two licensing models."

Wolf is also aware that the iPhone is expected to be sold by Verizon Wireless in early 2011, which would further hurt Android.

"Android benefited from the absence of the iPhone on the Verizon network, because the carrier spent heavily to promote the platform as an alternative to the iPhone," Wolf said. "Android effectively moved into a vacuum created by the implosion of Windows Mobile."

Windows Mobile preceded Microsoft's WP7 and still runs on many rugged handhelds and other devices, but was considered a flop for mainstream smartphones. Microsoft shook up its development teams to create the new WP7 platform.


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