Is Windows Phone Going Down in Flames?
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There's an increasing amount of data that suggests Windows Phone, despite Microsoft's massive marketing campaign and partnerships with any number of companies, is struggling to survive. Microsoft always knew it'd be a hard road ahead for the platform. But as I mentioned in an eWEEK article yesterday, executives in Redmond probably harbored the hope that Windows Phone would enjoy steady and incremental gains over several quarters. Yet that doesn't seem to be the case. Research firm comScore is estimating Microsoft's smartphone market share declined from 7.5 percent to 5.8 percent for the three-month period ending in June. That included both Windows Phone and the company's more antiquated Windows Mobile platform, which is being phased out. Meanwhile, the Seattle Post-Intelligencer estimated Microsoft's possible revenue from Windows Phone at less than $613 million. That figure came from subtracting Xbox 360-related revenue--some $8.103 billion--from that of its overall Entertainment and Devices Division, leaving $613 million split between Windows Phone and a variety of much smaller projects such as Zune and Surface. Even CEO Steve Ballmer's acknowledging the adoption issues: During a July 11 keynote speech at the company's Worldwide Partner Conference, CEO Steve Ballmer described the newish platform's market share as "very small." Microsoft is betting a lot on its upcoming "Mango" update, due to final release sometime this fall. Samsung, HTC, LG Electronics and Nokia have all committed to building new Windows Phone devices preloaded with Mango, along with Acer and ZTE. Some 500 new elements to the update include expanded functionality for the Xbox Live and Office hubs, new multitasking abilities, and Bing deeply baked into the user interface. But will Mango really reverse Windows Phone's fortunes? I find that questionable, particularly since Mango will release just as Apple's iPhone 5 (presumably) hits the market, along with a new generation of ever-more-advanced Android smartphones. Microsoft is also pinning its hopes on a partnership with Nokia that will see the Finnish phone maker adopt Windows Phone as its mobile software platform. Following the announcement of that partnership earlier this year, a few analysts suggested that Nokia's global presence would boost Windows Phone to new market heights within the next few years. Research firm IDC, for example, even went so far as to predict that Windows Phone would overcome both Apple's iOS and Research In Motion's BlackBerry franchise to become the second-ranked smartphone platform after Google Android. According to its latest financials, though, Nokia's bleeding market share, thanks in part to competitive pressures from the likes of cheap Android devices, and also because nobody's willing to buy Symbian OS devices that'll be effectively mothballed in a couple of quarters. If Microsoft ever harbored the hope that it'd inherit Nokia's market share for Windows Phone with relatively little attrition, that's looking highly unlikely. Nor does the partnership help solve Microsoft's issues in the United States, where Nokia has a negligible smartphone-market presence. As I mentioned yesterday, that leaves Microsoft betting that the Mango update, combined with a massive ad campaign and new manufacturing partners, will help change its trend-line among U.S. users. Now don't get me wrong: I like Windows Phone, and I think robust competition always improves a market. But the current data suggests Microsoft's smartphone dreams are in very serious trouble. |


Comments (8)
Don’t worry, they’ve got their patent tax on all those Android phones, which is bringing in more revenue than Windows Phone/Windows Mobile ever will.
So why even bother trying to bring out their own platform? Why not just live off the royalties on the surging popularity of Android? Then they can become a 100% pure patent troll...
Posted by Lawrence D’Oliveiro | August 10, 2011 1:10 AM
Microsoft is in it for the long game. They bet a lot on WP7 but it's more about unifying the user experience between the 3 screens (i.e. Mobile, TV & PC).
There real problem has been educating the sales staff in mobile phone shops.
Posted by Thom | August 10, 2011 10:43 AM
The problem is that almost no-one I know of has heard of the platform. iPhone is a common phrase and Android is becoming one. I've not seen or heard of anyone talking about Windows Phone 7 (it hardly rolls off the tongue anyway) and if I mention it to anyone they just look puzzled. Where is the continuous marketing and pushing of the platform? It's non-existent. No-one will buy it if they don't know about it.
It’s a real shame, I love my WP7 but the marketing seems so far wide of the mark it’s not funny.
Posted by Matt Gilbert | August 10, 2011 11:25 AM
Do you know how much $613 million is when spread across 15$ licenses per phone?
That would mean a huge amount of phones. Much more than they have sold.
Microsoft would do well if they have made $100 million from the phones as of yet.
And they make millions from Android sales as well
Posted by Blog | August 11, 2011 5:19 AM
"despite Microsoft's massive marketing campaign and partnerships "
I guess that must be in the US!!?? coz there aint no marketing in Denmark and perhaps in Europe.
And there are no Windows Phones in the stores.
And if you dont market your phone and the stores dont sell your phone, nothing will happen.
Microsoft have finally made a great phone OS, and we Microsoft geeks love it. But the phone wont sell itself!!!
Posted by Flemming Didriksen | August 16, 2011 6:49 AM
At this point in the cycle of both the iPhone and Android they both appeared as failures. In fact most pundits said as much. Apple has to have slowing sales with the anticipation of the next phone about to be introduced. Nokia sales have to slow because a platform is changing. Nokia is a powerhouse and will succeed. So will this phone.
Posted by larry | August 17, 2011 6:01 AM
Reviewers seem to think it's a 'fail'. Clunky, informative & backwardly slow around the 'People' hub -- that was meant to be its main feature.
Apparently the UI design just doesn't really work well.
My summary of market perception: iPhone is cool. Android is cool. Whereas MS & Windows are synonymous with crashes, horrible virus- and malware-prone OS, slow & difficult corporate ware and non-functional enterprise babble-ware.
Suprise suprise, non-retarded people don't want to buy the broken offal that MS likes to offer.
Posted by Thomas W | December 30, 2011 7:52 AM
I suggest the only way out of this mess is by raising the price of Android a little. It would require some re-negotiation with Microsoft's partners but we should feel configent about their continued cooperation on this matter.
Posted by Bartholomew C. Rottweiler | January 24, 2012 7:23 AM