Windows Phone 7 Off To Solid Start

by , Dec 21, 2010, 3:15 PM
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Microsoft finally broke its silence on initial sales of Windows Phone 7 devices -- sort of. The company said today it has sold 1.5 million units worldwide in the first six weeks, but that figure reflects shipments to partners such as wireless operators and retailers, rather than direct sales to consumers.

That makes it harder to get a true picture of uptake by end users. "We still don't have an accurate gauge of how well Windows Phone 7 is doing at retail," said Avi Greengart, research director for consumer devices at Current Analysis.

Even so, analysts viewed the 1.5 million Windows Phones 7 devices shipped so far as a respectable start for the new Microsoft platform. "Is it the millions and millions of sales Apple has done in one week with the phone? No. But consider the challenges Microsoft had," said Ramon Llamas, a senior research analyst at IDC, referring to the drag effect of Windows Mobile, the failure of the Kin phones and mixed reviews for the Windows Phone itself.

He credited Microsoft's massive marketing campaign behind the launch, including the "Really?" TV spots, for helping the company overcome legacy issues in the mobile realm. Achim Berg, vice president of business and marketing for Windows phones, said on the Microsoft site that sales are "ramping well" and that the numbers are in line with company expectations.

"So congratulations out of the gate. The question is 'what do you do now?," said Llamas, suggesting Microsoft will have to add more manufacturer and carrier partners to continue building momentum for its mobile operating system. "How does Windows Phone 7 fit in with the OEMs' smartphone strategies?" he asked.

To date, Microsoft has teamed with handset makers including HTC, Samsung and LG, and operators such as AT&T and T-Mobile USA. Verizon Wireless and Sprint are expected to begin selling Windows Phone 7 devices in the U.S. and other carriers globally in 2011. A rumor was also circulating online Monday that Microsoft is in talks with Nokia to create a line of Windows Phone 7 devices. The two companies last year formed an alliance to collaborate on business software for the Symbian operating system that runs on most Nokia smartphones.

But Microsoft already faces two big competitors in Apple and Google in trying to gain traction in the consumer smartphone market. Google's Android platform in particular is still growing fast and across multiple handsets and carriers, as Microsoft hopes to do with Windows Phone 7. "Microsoft is coming from behind -- consumers already have a wealth of good choices. It is not clear that consumers are looking for yet another option," noted Greengart in an analysis of WP7 earlier this year.

Said Berg: "We know we have tough competition, and this is a completely new product. We're in the race -- it's not a sprint, but we are certainly gaining momentum and we're in it for the long run." Next year will tell just how much momentum Microsoft has with Windows Phone 7.

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