The computing and electronics market has started a definite shift from the model that turned Microsoft into one of the most powerful companies in the world. Over the past ten years, while Microsoft has remained the dominant operating system, shares have largely stagnated while its nemesis Apple has gained nearly 3000 percent and newcomer Google grew by nearly 300 percent. Even IBM, one of the company's earliest foes, has outpaced the software giant in the past decade, though only slightly.
While many see Microsoft's declining dominance as the result of refusal to adapt, the company actually preempted several business strategies that have proven successful for its rival. Windows Mobile was first released as far back as 2000 and Nielsen notes that it remains the 4th most popular smartphone platform as recently as this past May, capturing 9 percent of the market.
In the meantime, however, Apple and Google have grown quickly to secure 38 percent and 27 percent shares of the market, respectively, while Research In Motion remains strong with 21 percent. The emergence of this strong competition pushed Microsoft to drop support for Windows Mobile completely and introduce its new Windows Phone 7, though DailyTech reports that even Microsoft chief executive Steve Ballmer must admit the platform has not proven successful.
Microsoft's other major lacking from many perspectives is its failure to invest in the rapidly growing tablet market. The iPad has taken the world by storm, while Android-based tablets at least offer a growing market. PC Magazine, meanwhile, reports that Microsoft steadfastly insists that Windows Phone 7 will not see use as tablet platform, which might have to wait for the upcoming Windows 8.
Despite falling behind in a range of categories, however, Microsoft has not gone entirely without success. Forbes reports that, while Windows Phone 7 commands less than 2 percent of the smartphone market and 1 percent of new phone acquisitions, Microsoft actually stands to gain from Android's dominance.
The open Android platform was developed by Google, but makes use of several patented technologies. Tech Crunch explains that telecommunications company Nortel put up some 6,000 of its patents for auction and Google attempted to purchase the rights to them, but was ultimately outbid by a group including Microsoft. In addition to its 17,000 other patents, Microsoft has actually been able to push licensing deals on manufacturers including HTC, General Dynamics, Wistron and Onkyo, and is also in negotiations with the largest Android phone producer, Samsung. Earning anywhere from $5 per phone shipped to $15 per phone activated, Microsoft stands to gain billions of dollars in licensing fees, or at least make a more favorable market for its Windows Phone 7.