Commentary

Microsoft Still Mum On Windows Phone 7 Sales

One of the surprises of the smartphone forecast released Wednesday by IDC was the bold prediction that Windows Phone 7 will be the No. 2 mobile operating system behind Android by 2015, surging to a nearly 21% share from 5.5% this year. The optimistic outlook for WP7 stems from Microsoft recently forming a long-term alliance with Nokia that will make WP7 the primary platform for Nokia smartphones.

That must have been a pleasing sight to Microsoft as it makes a major push to get back in the smartphone game with Google, Apple and Research in Motion. But when it comes to actual numbers of WP7 phones to date Microsoft remains tight-lipped. In advance of its MIX11 conference kicking off April 12, eWeek noted the company this week threw out various figures relating to developer adoption of the upgraded Windows Phone software including 1.5 million downloads to date.

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But it hasn't disclosed much in the way of WP7 handset sales from manufacturers including Samsung, HTC and LG since last fall. In January, Microsoft confirmed 2 million WP7 phones had been sold by manufacturers to retailers. But that still leaves open the question of how many units have been sold by retailers to end users.

Wouldn't Microsoft want to tout those figures if they showed how strong sales were? And, in light of its partnership with Nokia, wouldn't it want to highlight strong demand for its smartphone platform to boost confidence in the deal?

The software giant's reticence about WP7 sales is all the more conspicuous because of the contrast to the marketing blitz Microsoft launched to promote its debut. What's the ROI been on the reported $500 million the company spent on TV advertising for its revamped mobile OS? By one measure at least, not so good. For the three months ending in January, the Windows Phone platform continued to lose U.S. market share, dropping from 9.7% to 8%. In the same period, Android gained nearly eight percentage points to grab the lead in market share from RIM.

With handset manufacturers growing increasingly frustrated as Google imposes tighter control over changes to the Android OS, Microsoft has a potential opening to exploit by positioning itself as a more flexible phone partner. That may sound unlikely, but Microsoft will have to be uncharacteristically flexible if it wants to make headway against Google and Apple in the smartphone business. Opening up about WP7 phones sales would be a good start to re-establishing itself as a serious contender in the market.

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