I came across a report by IDC (International Data Corporation) that really caught my eye. IDC claims that Android and Windows Phone will rule the smartphone market in the near-future. I get why Android would be listed here, but I’m a bit skeptical about Windows.

The report cites the Windows/Nokia partnership for the increase in market share. Nokia is a HUGE handset manufacturer, so I can understand why this conclusion is reached. But I just think it’s way too simplistic to think that just because you create a partnership with a big handset manufacturer that it’s going to explode your share of the market in just a few years.

In my previous post, I argue that the OS that wins this battle will win because of the availability and variety of the apps they have available. My intention with that post was to set up my next post, which was to talk about the economics of the app markets. My colleague, Brian Lampright, beat me to the punch with an insightful comment.

The gist of his comment was that iPhone users have been conditioned to purchase apps through their use of iTunes, and that Google has done just the opposite by offering most of their services for free. I agree with his assessment wholeheartedly.

I think Google’s challenge is deeply fundamental. They are building Android as open source, and every bit of software they have created has been “free.” In a way, they have conditioned users of their wares to expect it as a freebie, so this has possibly carried over to the Android Market.

Apple, on the other hand, has done the opposite. You probably don’t realize the conditioning you have been subject to with iTunes. People have been buying files on iTunes for 99 cents for years, and now they are used to the model. They’ve launched the App store built on this foundation of conditioning. This is ABSOLUTELY BRILLIANT! They created a billion-dollar market where there was none – it’s like creating gold out of thin air!

This brings us to the likes of Microsoft and RIM. With BlackBerry, they are no doubt lagging behind because they don’t have as robust an app market as Apple and Android, but their App marketplace generates revenue and sales. In fact, RIM has nearly one-tenth the number of apps that are available for Android, but they are ahead of Android in revenue by more than 50 percent. BlackBerry may not be winning the volume game, but they are keeping up with revenue.

Which brings us back to Microsoft. As of March 2011, there are only around 9,000 apps available for the Windows Phone. That’s a far cry from the more than 350,000 in the Apple App Store and the approximately 250,000 in the Android Market. My point is, the Windows Phone ecosystem is extremely undercooked at this point, and even though your operating system has found a home on Nokia handsets, that doesn’t necessarily mean people will stick with your platform. I think IDC’s conclusions are premature at this point.

I still believe the quality of the app market will drive OS adoption rates. Economics will drive and prove that theory – and it won’t just be because of an inexpensive device.