Hardware wars

22:27, Sep 15 2013
Phone home: Microsoft New Zealand general manager Paul Muckleston says Microsoft’s Windows Phone software has gone from 2 per cent of the New Zealand market two years ago to 15 per cent in July. New Zealand can expect more local apps as a result.

Google's Android mobile operating system has won 80 per cent of the global market, as it's installed on everything from the cheapest to the most expensive hardware, but Apple is battling it out with Microsoft for second place. 

Who's copying whom?

Microsoft New Zealand says it is finally getting good reception with its Windows Phone smartphone platform: general manager Paul Muckleston claims it hit 15 per cent of the Kiwi market in July.

"Windows Phone for our previous financial year ending June 2012 was 2 per cent of the market," Muckleston said. "For the full 12 months ending June 30 this year, it was 4.5 per cent. In the quarter that ended June 30, it was 8.5 per cent, in July it was 15 per cent, in the last 12 months we have got another 9 per cent share."

Muckleston shared Microsoft's internal market share figures at this week's Microsoft Tech Ed 2013 conference in Auckland, New Zealand's biggest annual technology event, putting the growth down to Finnish cellphone maker Nokia's colourful Lumia range of Windows Phones.

"Windows Phone is tracking at around 10 per cent share and with new product releases coming from Nokia we should get to a consistent 15 per cent by the end of the year."


As Muckleston was sharing the news, competitor Apple was unveiling the latest iPhone models at its Cupertino, California, headquarters. Apple launched a silver, gold, or space grey iPhone 5S (US$199 with a contract), which is twice as fast as its predecessor with "Touch ID" fingerprint recognition. It will be available alongside a lower cost iPhone 5C (US$99 with a contract) available in blue, green, pink, yellow and white.

Apple's Australasian director of corporate communications, Fiona Martin, said no details relating to launch or pricing for New Zealand had been announced.

But Nokia's Lumia range, which makes up 80 per cent of the sales in the New Zealand market, has an entry level Lumia 520 for $299, which is available in black, red, yellow and white. At the top end is the record breaking 41 megapixel camera-sporting Lumia 1020, which Nokia will launch via Telecom for $1149 in the last week of this month.

Nokia New Zealand head of sales Scott McFarlane said Apple "had woken up to colour" a long time after Nokia had.

"When the Lumia 800 came out [in October 2011], half the sales were in blue - not just in the consumer space. A lot of sales are going through corporate channels."

Earlier in the month, Microsoft announced it was buying Nokia's phone hardware business and patents for $9.1 billion. Nokia CEO Stephen Elop is the frontrunner for the role of Microsoft CEO after Steve Ballmer's resignation.

Neither Muckleston nor McFarlane could say how the acquisition would affect either brand in New Zealand and whether the next generation of Windows Phone would carry Nokia branding, Microsoft branding or both.

Consumer.org, comparing the Windows Phone platform to Apple's iOS platform for iPhone and Google's Android platform, described it as: "The new kid on the block" that "also looks the best . . . The main weakness is that it doesn't have many apps currently available, although the fact that you can link it to your Xbox Live account means that there are plenty of games."

Microsoft has 120,000 apps in its Windows Phone app store. There are 938 for New Zealand, from Kiwi banks to Trade Me. That's expected to change after market share busted double digits.

Apple's own app store has 100,000 apps.

Enlighten Designs chief executive Damon Kelly was excited to hear of the growth. His Hamilton-based company writes apps for all software platforms and he sees Windows Phone as another opportunity.

"You can see by the amazing Windows Phone growth numbers Paul Muckleston has reported in the New Zealand market that Microsoft is dedicated to growing share so that developers will ensure their apps are also built for the Microsoft platform."

Muckleston said: "When we look at other markets that have got more over 10 per cent, a couple of things have happened. We have seen a dramatic increase in the number of local apps and some of these markets get Windows Phone and Microsoft Surface together and you get a deal and a really uncluttered experience."

The Surface is Microsoft's answer to the Apple iPad - a tablet computer running the Janus-like Windows 8 operating system. The software is looking forward, with touch friendly apps, and backwards, with the traditional Windows desktop.

Because the Surface RT and Pro models run Windows they can run Microsoft's Office productivity suite which Apple's offering can't, although a version of Office is now available for the iPhone.

Microsoft director for the Europe, Middle East and Africa time zone of enterprise strategy and architecture Martin Sykes said there were 2800 different models of Windows 8 computer available from Microsoft and original equipment management (OEM) partners like Hewlett-Packard, Dell, Acer and Asus. That compares to Apple's offering of a dozen or so variations of computers and portable devices.

Microsoft, and its partners, challenge then is to declutter the marketplace and market the options better to a mostly untechnical audience who just want their technology to work.

In response Microsoft has increased its outsourced merchandiser staff in New Zealand from two to 20 to work with retail salespeople.

Muckleston said he had head hunted them from the likes of Hewlett-Packard, Samsung and telecommunications companies.

"We are trying to change that retail experience," Muckleston said. "It's a bit harder for us than it is for Apple.

"We are trying to get a lot more co-ordinated with the major original equipment manufacturer (OEM) partners. "

"The Surface, for example, must sell in its own area. When you team that up with the Windows Phone experience it's much easier."

Microsoft director of customer channel group David Rayner said the merchandisers were holding weekly meetings with retail staff to ensure they understood the products on the shelf and could convey that to buyers.

"Most of the time it's a five minute demonstration showing where the new start screen is and where the old desktop is," Rayner said.

Decluttering the sales space was also a key message.

"If you look at any PC display in the retail store you have got ultrabooks and sleekbooks mixed up with laptops and touch enabled computers with non touch enabled machines."

"The whole idea is as Windows 8 gets more visibility in the market, people get used to the user interface. After people have seen the Windows Phone they say ‘I know what this is'," Muckleston said.

Muckleston would not release Surface sales figures in New Zealand, but statistics collected by the Stat Counter website show that 76.05 per cent of New Zealand web browsing is done by machines running a version of Windows.

Windows 8 personal computer operating system, launched last October, has 5.25 per cent of the market - a figure Muckleston is happy with as he says it mirrors Windows 7's market penetration after a year. Windows 7, launched in 2009, has 49.85 per cent of the market.

Windows 8.1 will arrive next month, as a free download to Windows 8 users, a year after the last version, breaking Microsoft's traditional three-year product life cycle.

"The speed at which we are doing things is very different," Muckleston said. "There's a lot of changes in the product. There's a lot of stuff that makes it a lot easier."

In some parts of the world retailers are colour coding different categories of Windows 8 devices in their stores depending on their core functionality.

"You are going to see more and more of the Microsoft environment in stores," Sykes said. "What we have realised is you need a little bit more help when making the choice. It's the new face of Microsoft being a bit more customer aware."

Microsoft director of marketing and operations Frazer Scott said the Windows 8 and Windows Phone 8 experience was designed around a consistent experience across computing devices.

"The one thing I love about Windows 8 and 8.1 is that that experience travels with me wherever I log in."

Microsoft is ending support for Windows XP in April next year, no longer updating the 12-year-old software from then and leaving internet attached machines open to attacks from hackers. In New Zealand 480,000 machines will be forced to unplug from the internet, or upgrade to Windows 8..