Microsoft are making a last-ditch effort to compete with Apple and Google in the smartphone war.

Microsoft attempt to take on Apple with a new smartphone

Microsoft’s announcement earlier this month of its new Windows Phone 7 smartphone OS signified the software giant’s last-ditch attempt to enter the smartphone market as a worthy contender.

After a few early false starts and a distinct lack of innovation, Microsoft are back with what Matt Buchanan of Gizmodo hailed as: “The most exciting thing to happen to phones in a long time.”

Over the holiday season Windows Phone 7 will ship on nine handsets through 60 mobile operators in 30 countries around the world. But how much of a threat does the new OS pose to the established heavyweights, Apple and Google?

Microsoft CEO Steve Ballmer has already admitted: “We have a lot of work to do to get into the game.” Ballmer is not exaggerating. The most recent figures show that in the US, the iPhone holds 28% of the nation’s smartphone market.

Both iPhone and Android have enjoyed a steady quarter-on-quarter two per cent increases in sales which has seen the Android now rise to hold 9 per cent of the smart phone market.  With the release of Windows Phone 7 however, Microsoft are eager to change all of this and join Apple and Google in the fight for supremacy.

Early Microsoft predictions estimate sales of 30m Windows Phone 7 devices throughout 2011. This compared with Apple’s own forecasts of 40m sales pits the two as close competitors.

Microsoft achieved an early PR coup when Stephen Fry, a notable and outspoken Apple fan appeared at the Windows Phone 7 launch, full of praise for the system. Asked afterwards if he will make the switch from the iPhone to a Windows 7 Mobile device, Fry said: “I think I probably will, at least for a while.”

However, most insiders suggest that the real battle will be fought between Microsoft and Google, with Apple’s product being too distinctive to be seriously threatened.

Smartphone commentator Damien McFerran explained the allure of the iPhone in an article for the website Know Your Mobile: “Your average Apple fan buys into the brand – they don’t just want functionality from their device, they want to feel that they’re purchasing an exclusive item.”

The Google and Microsoft OS are far from exclusive items. Both have released their operating systems on a variety of handsets, often products of the same company (HTC, Samsung, LG and Dell all produce phones running Google and Microsoft OS).

Many consumers may not even be aware of who provides the operating system running on their smartphone. It is in this sense that Microsoft poses the largest threat to Google in the smartphone wars.

With estimates predicting that smartphone sales will make up 40% of handsets sold in 2011, compared with just 14% this year, the stakes are getting higher. It may come as some relief to both Apple and Google that expert technology analysts Gartner predict that Microsoft will remain fifth in the smartphone market well into 2015.

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