Business Insider Research Morning Call 11/01/2011

Windows 8 devices could start shipping as early as Q3 2012. Windows8 is Microsoft’s big next software platform, which (if all goes well) will work seamlessly between PCs, tablets and phones.

Android is swallowing up the UK smartphone market, now at 50% marketshare, according to research firm Kantar ComTech WorldPanel. Strikingly, Apple’s marketshare is actually trending DOWN. The reason? Basically, Android flooding the market with cheaper phones on plenty of carriers. Could something like that happen in the US and the rest of the world? Anything is possible, but Apple is smart and counter-attacking, expanding the number of carriers and coming out with its “free” (with contract) iPhone 3GS.

Angry Birds maker Rovio will open retail stores in its fastest-growing market, China. It’s easy to see this headline, smirk and cry “bubble”, but this is actually a smart move. Rovio isn’t a games company so much as a mini (and very fast growing) Disney: it makes money not just from games but from licensing its amazingly successful Angry Birdsbrand on plush toys, t-shirts, and the like. Given that business model, opening a store is a smart move indeed.

WhatsApp, a popular smartphone messaging platform, now processes a billion messages a day. With the impending death of SMS and platform vendors like RIM and Apple focusing on proprietary solutions, there is a huge opportunity here. Short-burst messaging just may be the most popular mode of communication in the world. At least one huge company will emerge out of this. The leader in India’s huge mobile market is SMS GupShup, whose founder we interviewed.

Instagram now has 12 million users. Everyone should pay attention to this startup, because it is exemplary of the latest trends that affect all online companies; not photo-sharing, but capital efficiency and distribution. Here’s why we think Instagram is the future of startups →

“BBM was cool, but no one has a BlackBerry anymore so it became useless.” SAI editor Alyson Shontell, describing why she switched from BlackBerry to iPhone. There’s a bigger insight here, about network effects. Network effects happen when a product or service becomes more valuable when more people use it, and technology investors and entrepreneurs are fixated on network effects. We have been advocating a more nuanced view, noting that network effects businesses can be and are sometimes displaced by newcomers. This is a different example of the pitfalls of network effects. BlackBerry Messenger, a classic network effects service, helped rocket RIM to the top of the pre-iPhone smartphone world; but if people stop using your service for whatever reason, network effects can have an equally dramatic impact in reverse—instead of steadily declining, your service’s value to the user suddenly plummets to zero. Which only makes it less valuable to the next user, and so on. Read our study on network effects here →

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