Last week, Microsoft unveiled its Windows Phone 7 software, which is dramatically different from this company’s previous software for mobile devices. This new mobile operating system software provides an improved user interface, animated icons, a colorful touchscreen, and personalization features which enable users to customize aspects of the phone’s appearance and performance. In addition, these smartphones work with Sharepoint servers, which are being deployed by enterprises.

Sixty mobile operators, including América Móvil, AT&T, Deutsche Telekom, O2, Orange, SFR, SingTel, Telstra, Telus, and Vodafone, will be supporting Windows Phone 7 in 30 countries. In the US, Windows phones will be available in November. AT&T will sell Windows phones from HTC, Samsung, and LG Electronics, and T-Mobile USA will offer phones from HTC and Dell Inc.

Even with these distribution channels, Microsoft faces tough competition in the smartphone arena. The US smartphone market is dominated by Research in Motion’s BlackBerry devices, Apple iPhones, and devices that run on Google’s Android operating system. Given this intense competition, Microsoft is going to be fighting for fourth place in the US. Microsoft has a better chance to capture a significant share of the smartphone market in developing regions, including China and Latin America, where customers are not tied to Android or Apple smartphone devices.

Nokia recently announced that it will focus on expanding its US presence by strengthening relationships with communication service providers and developing smartphones to address US customer requirements. We have heard this US market focus refrain from Nokia multiple times during the past few years. Nokia is the leading handset manufacturer in many other regions of the world, but the company has not had the same success in the US. Can Nokia succeed with its US market efforts this time around? To succeed, Nokia must address three key issues:

1. Consumer smartphone usage is driving US market momentum. Nokia’s strength is in developing enterprise grade smartphones; however, the US smartphone market is increasingly driven by consumer purchases. Results from Forrester’s survey of IT decision-makers in North America reinforce this trend with approximately 60% of firms in North America providing some level of support to some types of personal mobile devices.
2. Intense competition is coming from other mobile device manufacturers with a strong presence in North America. To succeed in the US market, Nokia will face stiff competition from RIM, Apple, and Android smartphones. RIM’s BlackBerry devices are the most commonly used operating system among North American enterprises, with 73% of firms officially supporting these devices. We are also seeing a rise in enterprise support of new types of mobile operating systems to support iPhone and Android smartphones. Currently 30% of North American enterprises support iPhone devices, and 16% support Android devices. In comparison, Symbian operating system devices, which Nokia develops, are currently only supported by 4% of US firms.

Each year, Forrester analysts field over 20,000 inquiries on a variety of topics, which provide insight into the key issues and challenges facing our clients in a variety of roles, including CIOs, enterprise architects, vendor strategists, and marketing professionals. Forrester defines enterprise mobility as the ability of an enterprise to communicate with suppliers, partners, employees, assets, and customers irrespective of location. During 2009, analysts fielded nearly 700 inquiries related to enterprise mobility issues, jumping from 550+ inquiries in 2008 and 360+ inquiries in 2007. What are these inquiries asking about? The key focus of these inquiries is on mobile applications, mobile devices, and mobile employee segmentation.

Questions about mobile applications accounted for over 20% of all enterprise mobility inquiries in 2009. The  majority of these application inquiries were focused on vertical applications, including fleet management solutions in the transportation industry that enable more efficient, real-time routing of vehicles. Today, email and calendaring mobile applications are mainstream in most enterprises, so many companies are broadening their mobile application initiatives to address the needs of particular types of line-of-business workers in their industry (e.g., retail, healthcare, transportation, financial services.) We expect continued growth in the number of mobile application inquiries during the coming year.

On Monday, June 7^th, AT&T will introduce two new smartphone data plans, which will replace the current $30/month unlimited data plan offer and will make smartphone data packages affordable to more customers. The DataPlus package does, indeed, lower the entry-level price for smartphone users. The DataPlus package costs $15 per month for 200 megabytes of data, with the option of purchasing an additional 200 megabytes of data for $15. Customers who are heavy data users can purchase the DataPro plan, which is a 2-gigabyte package for $25 per month. If customers go over this limit, an additional gigabyte of data costs $10. DataPro customers can also use their mobile devices as wireless modems to connect other devices (e.g., laptops) to the network for an additional $20 per month.   

The net-net of these new packages is that customers using the DataPlus plan get a voice and data plan for $55 per month and customers on the DataPro plan pay $65 per month, compared with the current price of $70 per month. These price cuts will benefit the increasing number of employees who are responsible for paying for their own voice and data plans. Results from Forrester’s 2010 Enterprise And SMB Networks And Telecommunications Survey show that approximately 30% of over 1,000 surveyed enterprises have already cut the number of employees who qualify for corporate-liable mobile data and voice services, and 17% plan to cut the number of employees on corporate-liable voice and data services this year.     

HP acquired Palm for $1.2 billion in cash, ending recent speculation over who would purchase the struggling handheld device manufacturer. On the surface, this acquisition appears to bolster HP’s mobility strategy with Palm’s webOS mobile operating system, carrier relationships, experienced mobility personnel, and intellectual property.  

However, if you look under the hood, this acquisition has a key flaw. HP currently offers iPAQ PDAs and handsets that use Microsoft’s Windows Mobile operating system, but these devices have had limited success among enterprise users. Will acquiring Palm put HP in a strong position against other competitive mobile operating systems vendors? Not necessarily. In Forrester’s survey of over 1,000 IT decision makers in North American and European enterprises, only 12% of firms officially support or manage Palm devices. In comparison, 70% of enterprises support BlackBerry smartphones, and 29% support Apple iPhones. Android devices, the newest entrants in the mobile OS wars, have strong momentum and are officially supported by 13% of firms.

HP did gain some important assets as part of the acquisition. Palm's carrier relationships are a plus, and HP can leverage its strong international distribution channel to expand the reach of these mobile devices on an international level. Palm’s highly skilled employees, mobile operating system R&D expertise, and intellectual property are also a benefit. In the short term, HP’s acquisition gave Palm a new lease on life, but given the intensely competitive mobile device landscape, HP’s $1.2 billion investment may not pay off in the long term.