The success of any software platform rests upon available apps, and if Windows Phone (WP) wants to establish itself as a part of the “third ecosystem”, it needs to close its app gap compared to iOS and Android. If we look at the interest of software developers toward WP, things are looking quite positive: The quarterly Appcelerator / IDC Mobile Developer Report -one of the best known surveys on developer interest- suggests that WP has reached third place in the hearts of software developers, while iOS (iPhone and iPad) enjoys a persistent lead followed by the slightly fading Android. While the respondents are clearly not random developers, they represent both US and European perspectives.
Meanwhile in Finland
In the last year’s survey we found that Windows Phone (WP) development in Finnish software SMEs would explode by 500% the end of 2012 – at least if we take companies’ plans to “significantly develop” for the platform seriously. Taken, the reference point was low in 2010 (4% of firms), but on the other hand, the projected 2012 level (24%) was the same as for Android, a mature and leading platform. Can these results be nothing more than an expectation bubble?
Our first explanation for the results was a disproportionate knee-jerk reaction to Nokia’s move to dump Symbian and focus on Windows Phone. However, when we compared Windows Phone numbers to the firms that developed for Symbian in 2011, it seemed unlikely that the popularity of Windows Phone was only about jumping off a burning platform. In fact, we found that 76% of firms that developed software for desktop Windows in 2010 (about half of the respondents) had plans for Windows Phone in 2012. Taken together, the popularity of Windows Phone seemed to be driven by the industry’s overall shift toward mobile platforms, synergies between MS desktop and mobile development, and a Nokia-driven Finland effect, which is more about perceived opportunity than unavoidable necessity.
Is there a bubble?
Looking at our preliminary 2012 data (130 responses out of an expected 500), is there any sign of the Windows Phone euphoria fading? The following figure looks at how realized platform adoption for development purposes changed when comparing companies in 2010 and 2011. As Mikko wrote in his previous blog, the share of companies developing for Windows Phone has more than doubled (from 4.1% to 8.5%) making it the clear number 3 behind Android and iOS – in line with the Appcelerator developer interest survey. This indicates robust growth for the platform, but similar growth can also be seen for Android and iPad applications. Only iOS development for the iPhone shows signs of leveling out, and the margin compared WP is narrow. Slightly surprisingly, Symbian and Meego are still hovering at 2010 levels. We believe that this is largely due to maintenance of existing software (in the last figure, they are expected to collapse).
But can we expect that almost quarter of Finnish Software companies will have significant development for WP by the end of 2012, as our 2010 survey indicated? Looking back at the outcomes of 2011, this would require a three-fold increase within a year and having twice as many firms developing for WP than Android had in 2011 – the platform with the largest installed base in the world. So is there a WP expectation bubble in the Finnish Software Industry? – Our answer is a clear “yes”: there is simply no way that Nokia would create a pull that would offset the competitive situation between mobile platforms – even considering that supply leads demand in new platforms.
A bubble - so what?
Provided that expectations are probably overshot, does this make WP an insignificant development platform? Should companies start to scrap plans for adopting it? To provide a different perspective, let us consider the revenue forecasts of software firms: even though our surveys show that companies systematically and significantly overshoot their revenue forecasts one year after the other, the Finnish software industry has still been growing at a faster pace than the overall economy. Hence, while the industry is stuck in a perpetual bubble, its growth is still far from insignificant. (It is even likely that the same holds for all entrepreneurial activity irrespective of industry.) What we perhaps should be looking at is changes in expectations, regardless if the expectations are realistic or not.
To do this, the following figure presents plans to develop software for different mobile platforms - The 2012 plans were surveyed in 2011, and the 2013 numbers are fresh from this month. These numbers point out that WP development plans are going even further up from 2010. Looking at the stagnating iOS numbers, WP is strongly headed for second place. And even if its adoption rate falls short of expectations, it has already reached a position near Android and iOS – far from insignificant.