Microsoft the ‘Vital New Underdog’

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A mobile duopoly looms, and Microsoft is the only one who can save us.

Xconomy’s Wade Roush  have published an interesting editorial on the mobile market, and notes that with HP dropping out of the phone business, and RIM rapidly crashing out of the market, he is rooting for Microsoft as the new mobile underdog.

He notes the ecosystem needs a “strong third option” to he healthy and stable, according to the “Rule of Threes”.

There’s a concept in economics called the Rule of Three. It’s the tendency observed across many types of markets for customers to clump around three generalists—that is, companies competing to sell a full line of products. Think of United, America, and Delta; Carnival, Royal Caribbean, and Norwegian; or, in the old days, ABC, NBC, and CBS, or Ford, Chrysler, and GM. Such markets tend to function best when no single player controls more than 40 percent or less than 10 percent of the market—at least, that’s what marketing professors Rajendra Sisodia of Bentley College and Jaqdish Sheth of Emory University found in a study of more than 200 industries.

Together, the three leaders usually control 70 to 90 percent of a market. But if one competitor gains more than a 40 percent share, Sisodia and Sheth found, it often becomes too expensive to operate and attracts anti-monopoly scrutiny. If it falls below 10 percent, it risks becoming a niche player, forced to spend its energy fending off other small specialists.

Wade notes Microsoft may not be Apple’s equal when it comes to user-centric design, but is “way ahead of Google, where engineers clearly rule and designers have had a notoriously hard time being heard.”

He conclude:

Microsoft is now the only force that can save us from an Apple-Google duopoly in mobile computing—which increasingly means all consumer computing. …  I never thought I would hear myself saying this—but a stronger Microsoft means more innovation for everyone.

So there we have it, a perfectly rational reason for rooting for Microsoft in the mobile wars.

Read the full editorial at Xconony here.