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IDC Just Can't Stop Predicting Good Things for Windows Phone 7

There is hardly a more tangled web anywhere in business than the one that industry analysts weave in the technology market. Yes, they're smart. (Well, most of them are, anyway. We won't tell you which ones probably aren't.) Yes, they do their research. Sure, companies put a lot of faith (and money) into their predictions.

But if there's one thing industry analysts undoubtedly are, it's conflicted (and we're not the first to notice this by any stretch). The very companies they comment on in the press and whose performances they routinely predict are the same companies that give them boatloads of money for advice and, well, analysis and predictions, we suppose. So, there's a conflict of interest built into every statement an industry analyst makes, although we at RCPU do believe that the overwhelming majority of them do all they can to be objective and credible. It's in their interest, after all, not to show bias. We think.

Still, as independent journalists whom Microsoft doesn't pay for consultations (aside from occasionally buying us lunch), your editor and some of his colleagues do have to wonder where some of the analysts get their crystal balls -- and who's paying for them. Again, last week, IDC said that Microsoft and Windows Phone 7 will surpass Apple and iOS in market share for mobile operating systems by sometime in 2015. We say "again" because IDC made a similar prediction back in March. (To be fair, IDC sees Android as the overwhelming market leader by that time.)

With WP7's market share actually falling since Microsoft replaced the old Windows Mobile with Windows Phone, where on earth is such rapid growth -- at the expense of iOS, which is currently battling Android tooth and nail for top spot -- going to come from? From Nokia, and from the developing world (as opposed to, say, the U.S. and Europe), IDC figures. Struggling Nokia certainly hopes that it comes from somewhere, as former Microsoft executive and current Nokia CEO Stephen Elop seems to be betting big time on his former company's mobile OS. (Meanwhile, some reporting suggests that WP7 literally has no chance against its competitors in the U.S.)

Maybe this developing-nation scenario will happen. It's plausible, we suppose. Plus, the Windows Phone 7 Mango update really does look very impressive. But IDC's numbers seem so far-fetched compared to the current state of the market that they're just kind of hard to believe. And why did IDC feel the need to broadcast these predictions, which are awfully similar to each other, twice in the space of a few months? We're not suggesting any sort of impropriety here, but IDC's insistence that Windows Phone 7 will crush iOS in the space of four years just seems random beyond even the parameters of industry analysts, who can come up with some off-the-wall stuff.

The real issue here, of course, is that nobody really checks up much on these predictions. We remember an article from some years ago (we're talking 15 or so) in one of the trendy mags of the time (Fast Company?) that tracked these predictions over several years and -- to our memory, anyway -- showed a fair number of them to be bogus. Still, will anybody remember in 2015 what IDC said about WP7, whether it's swamping iOS or languishing in third place (or worse)? Probably not. But partners, IT pros and corporate investors are supposed to have enough faith in what IDC is saying to put some sort of money on the firm's predictions. That's kind of strange, isn't it?

One quick analysis of the analysts we found from 2010 showed that they -- particularly IDC and Garter -- actually did pretty well in 2009 with their predictions for the year. Fair enough. But even in that article, there's a big logo on top of the page that says "Content by IDG." An InfoWorld writer typed the piece. IDG is the parent company of IDC. See what we mean about the tangled web? We're not saying it's not on the up and up -- it probably is. But there's always that sliver of doubt. (And, yes, we recognize that doubt exists with regular old journalists and bloggers, too, but your editor doesn't even know who advertises in Redmond or on -- seriously -- and has certainly never sat down with a vendor to talk about advertising. That's the major difference here. Analysts advise vendors all the time on the very stuff they later make predictions on or write about.)

Another reporter, this one from Fortune, tracked analysts' predictions compared to bloggers' prognostications for one of Apple's recent fiscal quarters, and found that the bloggers blew the analysts away. Now, to be fair, that piece tracked Wall Street financial analysts, not tech-industry firms like IDC. But while Wall Street analysts have plenty of conflicts of their own, your editor has always thought that they'd be less likely than industry analysts to fudge predictions because their compensation comes a little less directly from technology vendors than does the payment that industry analysts receive from tech companies. In any case, these highly paid professionals, for whatever reason, and in one particular quarter, got their Excel spreadsheets handed to them by mostly unheralded bloggers.

Of course, we'll have to wait until 2015 -- when the tech landscape will likely be unrecognizable compared to today (where were tablets and the cloud in 2007?) -- to see just how right or wrong IDC was. And it's highly likely that by then, particularly at the pace at which it's going now, IDC will have released a bunch more predictions on mobile-OS market share. So, what should we make today of IDC's bold prediction that WP7 will crush iOS within four years? Make of it what you want -- but we know where we're filing it.

Do you listen to industry analysts? Do you trust them? How much? Send your thoughts to [email protected] or leave a comment below.


Posted by Lee Pender on June 13, 2011


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