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Microsoft's Windows Phone: 2012 Success

Stocks in this article: MSFT GOOG AAPL RIMM

NEW YORK ( TheStreet) -- My first prediction for 2012 is that Microsoft (MSFT) will succeed in its smartphone efforts and stake out a credible third position behind Google's (GOOG) Android and Apple's (AAPL) iPhone.

By the end of 2012, the number of Windows Phone users may still lag behind what could be very close to 100 million BlackBerry users at that time, but the Windows Phone growth rate will almost inevitably be a lot higher, suggesting it may pass BlackBerry as early as 2013.

Having suggested this trajectory for Windows Phone for several months, I am typically met with extreme skepticism. People ask me, "Why? Aren't Apple and Google already entrenched with iPhone and Android?"

I have no beef with the assumption that iPhone and Android will remain the market leaders by a wide margin for at least the next three years.

All I am saying is that Microsoft will be able to get a sustainable and clear position in the marketplace by the end of this year.

So what does Windows Phone have that Google's Android and Apple's iPhone lack? And what about Research In Motion's (RIMM) BlackBerry?

Let's examine the entry points for Windows Phone in turn:

1. Windows Phone vs. Apple's iPhone:

In many ways, Microsoft copied some key aspects of the iPhone software architecture -- in particular, the end-to-end control of the software, including the centralized update procedure and the absence of customization by hardware manufacturers and carriers.

There are two key differences between and Windows Phone and iPhone, however:

  • Diversity in hardware. Currently, the main Windows Phone hardware makers are Nokia (NOK), Samsung and HTC. LG and Dell (DELL) are the two smaller players right now. This diversity is in stark contrast to the iPhone's single size and form.
    Although the iPhone is available in one screen size -- 3.5 inches -- and lacks a keyboard option, the Windows phones range from 3.7 inches to 4.7, and there is one good keyboard option in the form of the outstanding Dell Venue Pro, which is available SIM-unlocked directly from Dell for only $300.
  • A new user interface. The iPhone interface is great, but many longtime users admit it's getting a little bit stale. In contrast, Windows Phone offers a refreshing take on how to absorb information quickly.

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