Monopolistic Competition of Smartphones

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Microsoft was once a leader in smartphone operating systems. The introduction of the iPhone and the popularity of smartphones caused a decline in Microsoft’s Windows Mobile. Some of the top cell phone makers who used Windows Mobile, Microsoft’s operating system, are making phones that use Android, Google’s new operating system. Motorola has completely switched to Android, and Dell’s first cell phone, the mini 3, is using Android.

The four major wireless carriers in the United States will offer Android phones. Cole Brodman, the chief development officer of t-mobile said that Android is becoming very important to cell phone manufactures. Android is on 1.8 percent of the world’s smartphones. In 2008, Windows Mobile dropped from 12 percent to 9.3 percent, and Apple increased from 2.8 percent to 13.3 percent. Nokia’s Symbian and the Blackberry were in the lead. Microsoft charges cell phone manufactures $15 to $25 dollars per phone for Windows Mobile. Android is becoming more attractive to cell phone makers. It has more applications than Windows Mobile, and its touch user interface is more convenient than Windows Mobile’s stylus user interface. Android is also an open source operating system, so any manufacturer can customize it.

Windows Mobile is ideal for the business person who wants to extend Microsoft’s software from the desk to the pocket. Microsoft is revising its Windows Mobile to appeal to the average consumer. Critics and analysts suggest Windows Mobile is obsolete. According to a consumer satisfaction survey by J. D. Power & Associates Windows Mobile had the lowest rating and Android was second to the iPhone.

Tero Kuittinen, an analyst with MKM Partners, does not think Android will be popular. He based his opinion on the success of the first three Android devices. However, Kevin Packingham, senior vice president for product and technology development at Sprint, expects Android to grow.

The smartphone market is a monopolistic...
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