With the introduction of its critically acclaimed Lumia 900, Nokia Corp. has set the stage to regain some of its lost smartphone market share—and to re-establish Microsoft Corp.’s Windows Phone as a leading contender in the cellphone operating system (OS) business.

Largely based on Nokia’s strong support, Windows Phone is set to regain the No. 2 rank in the smartphone operating system in 2015. Finnish-based Nokia in 2009 lost its second-place worldwide ranking because of rising competition from Google Inc.’s Android and Apple Inc.’s iOS.

In 2015, however, Windows Phone will account for 16.7 percent of the smartphones shipped, up from less than 2 percent in 2011, according to the IHS iSuppli Mobile & Wireless Communications Service at information and analysis provider IHS (NYSE: IHS). This will allow Windows Phone to slightly surpass Apple’s iOS to retake the market’s second rank behind Android, as presented in the table below.

The New York Times has an interesting article this week explaining why HP’s adventure with Palm failed.  The latest explanation is that Web OS just wasn’t ready for prime time, according to Paul Mercer, who was senior director of software at Palm (link).

Paul’s an extremely bright software guy.  It’s unusual for someone with his seniority to go on the record with criticisms of his former product, and I applaud him for it because it helps us all learn.  If Paul says Web OS was unready, I’m sure it was.  But respectfully, I don’t think that’s why Web OS failed. I think the company’s business strategy was fundamentally flawed, in ways that would have almost certainly doomed Web OS no matter how it was built.

The point is important because other companies planning similar products might take away the wrong lesson from Palm’s demise.  (For example, Information Week concludes that it’s too hard for any startup to play in the mobile device market [link]; MIT Technology Review says the lesson is that you have to retain key employees [link].)  To explain what the right lesson is, I need to give you a little background on the dynamics of creating a new operating system.

Nokia (NYSE:NOK) has acquired Smarterphone AS, a developer of software optimized for feature phones. Financial terms were not disclosed. Smarterphone investor Ferd Capital announced the transaction, which was completed in November 2011.

The Smarterphone operating system promises a smartphone-caliber user experience across more basic feature phone devices and is designed to run on limited-resource hardware. Smarterphone (previously known as Kvaleberg) also touts greater flexibility for tailoring handset software to different markets. Partners include Taiwanese manufacturers Compal Communications and Wistron NeWeb.

Although Nokia has made substantial bets on smartphones running Microsoft’s (NASDAQ:MSFT) Windows Phone operating system, the manufacturer has vowed to continue building lower-end feature phones, with an emphasis on emerging international markets. In September, The Wall Street Journal reported Nokia is building a new Linux-based OS to advance its feature phone aspirations.

Some analysts have questioned the longevity of the feature phone business, however. Low-cost, feature-rich smartphones running Google’s (NASDAQ:GOOG) Android operating system are becoming increasingly commonplace, with Chinese manufacturer Spreadtrum poised to introduce Android devices priced below $50.

Over at WindowsITPro, Paul Thurott outlines some details of Microsoft/Nokia’s (purported) marketing plans for Windows Phone in 2012. Amongst them: a $10 to $15 commission for retail sales people who sell Windows Phone handsets over Android or iOS.

In turn, John Gruber asks: “If this strategy was on the table, why didn’t Microsoft start this a year ago?“

Here’s why: because it’s an admission of failure.

It’s only right that the creative individuals behind a multi-billion dollar industry should have access to their own professional body, but for some reason the idea has yet to take hold. That could change at CES, when Jon Potter — formerly of the Digital Media Association — will start selling membership to a new outfit called the Application Developers Alliance. His pitch will open with the concept that “there’s an interesting space in the application developer community that isn’t really organized” and then move on to offer services like an online collaborative network, shared product-testing facilities, discount training schemes and cloud services, and even government lobbying over issues like privacy and IP. Who knows? That sort of thinking could ultimately lead to a fully-fledged union movement to stand up to fat-cat platform owners and let them know who’s boss, but first things first eh?

The three horses are Android, bada and Tizen.

Android : Samsung is currently the overwhelmingly largest Android manufacturer, grown far bigger than number 2 in Android: HTC.

bada : Samsung promised 10 million cumulative bada sales in its first year and only did about 6 million. Samsung shook up its bada organization but has not recently given public statements of its intentions with bada. The global average price for smarpthones continues to decline, and bada is well poised to capture the mass market side of smartphones in emerging markets from China and India to Egypt and Nigeria. Samsung will also be monitoring the statements that came from Sony(Ericsson) and Motorola both which boast high percentages of migrating dumbphones to smartphones – Sony will complete its migration to all smartphones by 2012. For Samsung to do that profitably and with a long-term view, they will need to bring bada to full status. We may well see Samsung numbers shift so, that bada becomes the biggest OS on Samsung smartphones and if that happens, bada will definitely become the third ecosystem during 2012 (not Microsoft Windows Phone with Nokia).

Tizen : Intel and Samsung announced the end of MeeGo and the launch of its replacement smartphone operating system, Tizen. Tizen phones should start to appear during 2012 and those are likely to be high-end smartphones similarly to how the N9 and N950 were high-end MeeGo devices. Tizen would be the logical high end OS of preference for Samsung if and when it wishes to move away from building Google’s Android army. Expect Tizen to be built with plenty of family ecosystem thinking with bada and Samsung’s app store, much like how Nokia’s MeeGo strategy was supposed to work with Symbian and Ovi.

The Telecom Regulatory Authority of India estimates that there will be an additional 200 million new mobile subscribers in the coming year.

According to research aggregated by wearesocial.net, there are more than 898 million mobile subscribers in India, 292 million of these living in rural areas.

The same data showed that 346 million Indian mobile users had subscribed to data packages, with more than half of all internet users in the country accessing the web via their mobile phone.

“The mobile phone will drive internet use in India in 2012,” says Mr Agarwal the editor of the Indian gadget blog onlygizmo.com. “Computing begins with the mobile and its growth is fast in India.”

He believes that the increase in smartphone and internet capable phones, selling below Rs5,000 (£61; $94)and built by Indian manufacturers, is making it easier and more affordable to own such devices.

[This week we're launching the biggest survey on cross-platform developer tools. The results will be available as a free report in Q1 2012. This report will address a segment that is rapidly developing as a convergence of factors has created both opportunity and demand for cross platform solutions.]

With VisionMobile estimating that each app on the Apple App store represents an average investment of US$30,000 to develop, the attraction of tools that help developers target additional platforms with minimal additional investment are obvious. As regular updates to platforms can effect functionality in existing apps, it is not just cross platform development but cross platform app management that can tax the resources of many a developer and brings the need for cross platform solutions to the fore.

Nokia CEO Stephen Elop:
Nokia’s Windows Phone devices flop

Stephen Elop

Nokia (NYSE:NOK) CEO Stephen Elop  last week unveiled the company’s first smartphones running Microsoft’s (NASDAQ:MSFT) Windows Phone platform, the opening gambit in whether Nokia’s bet on the new software will help revive its flagging fortunes. The Lumia 800 and 710 will be available in November in France, Germany, Italy, the Netherlands, Spain and the UK, with support from 31 operators and retail partners. By the end of the year, both devices will be available in Hong Kong, India, Russia, Singapore and Taiwan.

For the United States, Nokia did not announce any specific products, but Elop said a portfolio of devices will be coming in early 2012, meaning Nokia will miss the crucial holiday shopping season for the U.S. market. There are lots of unknowns in this gambit: Will Nokia’s Windows Phone devices be differentiated enough from those from HTC, LG and Samsung? Will consumers warm to Nokia’s brand, which has taken a beating in recent years, especially in North America? How will Nokia break through with carriers and retail sales representatives, two crucial constituencies? The pressure is on Elop and Nokia to deliver. If they don’t, Nokia might not last.

Michael DeGusta of The Understatement posted an excellent infographic (that is, a truly useful one) this week showing just how poorly the Android community, namely Google (NSDQ: GOOG), phone makers, and carriers, have supported their early adopters with new versions of the software. Click through for the full graphic, but the stats are telling: of Android phones launched prior to June 2010, several of which are still under contract with their respective carriers, “12 of 18 only ran a current version of the OS for a matter of weeks or less” and “10 of 18 were at least two major versions behind well within their two year contract period.”