Microsoft’s Windows Phone ’07 U.S. launch was a dud; Nokia worried?

“The latest numbers from research firm comScore show that Microsoft’s Windows Phone launch late last year in the U.S. market was largely a non-event,” Mike Dano reports for FierceWireless. “This raises the obvious question: Does Nokia know about this? And is the company concerned?”

“Based on its surveys, comScore showed the number of Americans who reported owning a Microsoft smartphone (either Windows Mobile or Windows Phone) was around 5.9 million in October. That number dropped to 5.5 million in November and 5.3 million in December. Microsoft launched its overhauled smartphone operating system during November with $200 phones from the likes of Samsung, HTC and LG and with carrier support from AT&T Mobility and T-Mobile USA,” Dano reports. “Now, since comScore puts both Windows Phone and Windows Mobile into the same figure, it’s possible that a large number of Windows Mobile owners swapped out their handset for a new Windows Phone device–but I doubt it.”

Dano reports, “Further, comScore’s figures show that Microsoft’s market share in the United States continued its gradual decline through February of this year, which indicates the launch of its Windows Phone platform in November has done little to reverse a decline in the company’s market share that started at the end of 2009.”

Read more in the full article here.

MacDailyNews Take: No telling if Nokia’s worried (they ought to be), but they’re certainly intimately familiar with launching duds in the U.S.

[Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]

Related articles:
How Microsoft’s Windows Phone ’07 can beat Apple’s iPhone in market share – April 9, 2011
Gartner: Microsoft Windows Phone market share to surpass Apple’s iOS in 2015 – April 7, 2011
IDC: By 2015, both Android and Windows Phone will beat Apple’s iOS in smartphone market share – March 29, 2011

40 Comments

  1. Let’s take a proper look at this: Microsoft had this old, clunky, horrible mobile OS (6.5) that was rapidly hemorrhaging market share, since it was very obsolete, based on an ancient code base (Windows CE / Pocket PC), not to mention the level of carrier customisation and front-end replacement that totally confused the market. So, they took their sweet time, worked really, really hard on a mobile OS that would be built from the ground up (kind of like the iOS was), missed several self-imposed deadlines and eventually proudly announced they were ready. In their exuberance and euphoria, they even held a mock iPhone funeral. Massive amounts of marketing dollars went into this new OS. Handset makers cautiously embraced it and built first phones. And the end result? The market share continued steady decline, as if NOTHING had happened.

    Nokia’s top man (I can’t remember the name of the guy succeeding Oli Pekka Kallasvuo) is surely increasingly troubled by this.

    1. Apple played Microsoft perfectly. iPhone’s release in 2007 was initially met with “denial” from Microsoft, followed by furious activity to dump Window Mobile and replace it with something new. It was a distraction, causing Microsoft to almost completely ignore tablet computing, something they have been working on for the last decade.

      Then, Apple released the REAL DEAL for the NEXT decade, iPad. iPad is really what will cause Microsoft serious pain going forward, not iPhone. Microsoft never saw it coming because Apple had them worried about and focused on iPhone. So just as Microsoft was readying Windows Phone 7 for release (finally), Apple stole the spotlight once again by releasing iPad. Windows Phone 7 became a “non-event.” And Microsoft had no answer for iPad (just as they had no answer for iPhone in 2007)… they must be SO ticked off that Apple out-maneuvered them so thoroughly.

  2. I don’t know if the launch has anything to do with the phone over the long haul myself. I wrote it off as an epic fail from the beginning.

    Since then I know about 8 people who picked up phones running the MS OS (which I never thought I’d see happen) and having used one of my friends devices for a day I was actually impressed.

    The scrolling was fluid and the text input was great.

    I don’t see it blowing the iPhone or Android out of the water anytime soon but I wouldn’t write it off due to a lame launch.

    It probably has far more potential than I would even like to admit.

    1. Apple won’t invade the low-end mobile phone business. There’s no profit in it, just bragging rights about market share, which Apple could care less about.

      1. iPod started out high-end, and Apple let the rabble have the low-end. Then, Apple found a way to make a profit at the low-end too, and we have $49 iPods. Today, most of the former competition have given up in digital media players (even Microsoft).

        Macintosh has always been high-end computing. Apple let the rabble have the low-end. Yet even here, Apple found a way to invade the low-end dominated by “netbooks.” It’s called iPad.

        I am absolutely certain that Apple will eventually find a way to go after low end of the mobile phone market.

      2. It really depends on how much the carriers are willing to subsidize. The previous generation iPhone has provided a conduit for those who don’t want to spend more than $100 on a phone.
        That Apple can sell iPod touches for $199 shows that there must be a reasonable margin for the basic components.

        Apple will see pricing pressure as more touch phones come on the market. Fortunately for them they have great component pricing and that will only improve in the long term as the market builds.

        You’re right that Apple won’t go low end without know they can make money. But realize that Apple’s real dominance of the player market came when they released the mini. Suddenly the iPod became accessible to everyone.

        The phone market is a lot more complex but knowing Apple they will come up with a device if it makes business sense and can drive revenue and profit at the same time.

        1. I am still using my iPhone 3GS. Great device. So good that I haven’t been compelled to upgrade. The iPhone 3GS is now available for $49. Seriously, only FREE is cheaper. Nokia is going to have to price it’s WinOS smartphones low enough for carriers to give them away. Nokia is the current champions of plain ol’ mobile phones, but they’ve never sold smartphones cheaply. Even if WinOS is attractive as a smartphone OS, if Apple keeps a model at below $50, and makes it available to more carriers, even Nokia will be hard pressed to keep it’s market share crown as more people convert to smartphones. As I am writing this I am hearing a radio commercial for a company buying up people’s old iPhones. Why is this? Because if people can find a cheap iPhone, it’s the one they want.

          1. But that $49 iPhone (as a new purchase) involves signing an expensive two-year contract. The monthly payment is more than $49. The fine print at the Apple Store says an iPhone 3GS costs $449, if you buy it without carrier contract. So that means the carrier is paying Apple at least $400 in upfront subsidy, and you are paying the carrier back over two years.

            The true “low-end” mobile phone from Apple will replace the current $49 (last year’s model) iPhone offer. The iPhone 4 is quite advanced, even after one year, so I don’t think Apple will offer it for $49 alongside iPhone 5. So this NEW class of Apple phone would become the $49 or maybe FREE offer for a two-year contact with lower monthly fee. And it would cost around $149 (eventually lower) as a contract-free purchase.

            Just as no customer would confuse an iPod shuffle or iPod nano for an iPod touch, this new low-cost phone will be designed and marketed to NOT take sales away from the highly profitable subsidized “full-featured” iPhone. Perhaps it will use an upgraded version of the touch-based OS currently used on the iPod nano. It will come with plenty of built-in features, but not the ability to add third-party apps.

            And while the $49 iPhone 3GS looks very similar to iPhone 4, this new low-cost phone will be quite distinct in appearance. No one who wants a “real” iPhone will choose it, just as no one who wants an iPod touch would get an iPod nano instead. The target audience will be customers who currently choose low-end Nokia phones and do not even consider an iPhone due to overall cost.

      3. There is a lot of money to be made in selling a Apple phone to the less affluent. Carrier subsidies make that possible and a free-with-plan iPhone ‘Lite’ (sic) is a strong business proposition. It serves Apple well since it multiplies customers for media sales and it grooms them for future upgrading to the real thing.
        If Apple can sell the fine 3GS for $49-with-contract and make a good profit on that, there is scope for a free iPhone with reduced ooomph, 8GB RAM, smaller 640×480 screen, fewer features and perhaps all the free, pre-installed apps but no ability to download more apps.
        It would sell very well. Many people want an almost-smart phone that has a few really useful, relevant apps and excellent phone features. Not a mobile computer but a damn good phone.

  3. Reality : WP7 massive dud as shown by actual sales numbers

    Fantasy : From these numbers Gartner and IDC predicts WP7 overtakes iPhone in 2015

    Wallstreet fund managers : (crunching Exel numbers on Dell PCs) : Gartner is RIGHT!

    aapl tanks

    ????

  4. Well, wp7 did not get much of a launch for Microsoft new os and since then, very little love from Lg, Samsung,etc. Just this year alone, there are more android phones launched then wp7. Plus, they are having difficulty in even launching updater. It has been 4 months and there so little numbers of apps developed. Will there be dual core wp7? It’s the kin effect all over!

  5. Windows Phone is too late to the game and has too few apps to interest anyone. While it may be a decent OS (I have messed around with a couple for a few minutes in the store), there’s nothing to differentiate it from iOS or Android.

    However, Microsoft has an uphill battle for a number of reasons:

    1. Many people have been burned by Microsoft Windows in the past, and don’t want Blue Screens of Death on their phones.

    2. Microsoft had all that time, and courted almost no developers. Where Are The Apps?

    3. No iTunes/iPod/good music store.

    4. No buzz. Frankly, the launch was pretty ho-hum because Microsoft didn’t do anything with the product to attract attention, other than say, “Here it is!”

    5. Microsoft’s history: Release a new product, and then get it working decently by version 3. Windows Phone is still on version 1.

    6. The Kin Debacle. While not very many people bought them, TONS of people saw the ads and remember that this product got killed off 6 weeks after being released. “Is Microsoft going to do that to my new Windows Phone?”

    1. Careful, I remember people saying Apple was late to the game and would never overtake BB. Not saying Windows is on fire, just saying that I’d be careful about my statements.

  6. The only Windows ’07 phone I ever saw in the wild belonged to a guy who told me yesterday he had returned it and was buying an iPhone 4. I seriously doubt that as many as 2 million W7 phones ever were bought by an end user, and I suspect upwards of 10%-15% of those were returned.

  7. Will these Microsoft smartphones be shipping with the spyware and viruses preinstalled in them or will the users of the Microsoft smartphones have to get infected on there own?

    Also, can the “Blue Screen of Death” also work as a built in flash light app?

  8. The situation for Microsoft is worse than they report. comScore uses a 3-month moving average, which has a smoothing effect on the numbers. February’s actual Microsoft share is lower, as the February number is actually an average of December, January and February.

  9. Microsoft launched a new phone OS ? Well I’ll be ! Where was I for all the Brou-Ha ?

    Oh thats right…. it was a microsoft launch…… iOS devices unaffected…. others…. not so lucky….

  10. WP7 has no future because the manufacturers prefer Android. They have to pay royalties to Microsoft if they use the OS. They do not pay royalties if they use Android. And free Android has Apps and is far more popular then WP7. So you will hardly see manufacturers marketing their WP7 phones. That is why Microsoft had to pay Nokia to use WP7 and not the other way around. That payment prevents Nokia from going to Android…. And seals Nokia´s destiny.

    Poor Nokia. With MS7 as the OS on Nokia´s phone, not even the diehard Nokia fans are buying. I know because I sued to be one of them. This is a perfect storm and the mother of all the Osborne´s effects. Feel sorry for a once great company.

  11. Everybody missed the point of this article.

    There are actually 5 million people that bought a windows phone? WOW!

    Why?

    What were they thinking?

    What were their state of mind when they did this?

    Its an incredible story.

    Do they prefer black and white TVs rather than color?
    Do they prefer caves rather than houses?
    Do they prefer raw food rather than cooking it?

    Its definitely fascinating.

    1. Quote: Do they prefer raw food rather than cooking it?

      Easy now – that’s uncharted and dangerous territory. Raw fruits & vegetables are great, as are some kinds of raw meats (steak tatare, sushi, hackepeter come to mind) Raw milk and cream are delicious Lots of food items don’t need to be cooked to be enjoyed.

      I would definitely agree with your other points, though. 🙂

    2. probab.y a lot of M$ old business partners like DULL. I remember an article late last year saying that it was DELL’s official corporate phone. I’m sure they issued it to all their constituents in India as well as state side.

  12. Steve Jobs said it already re the iPod: In order for MicroSoft to beat us they will have to do something they have never done – break with their traditional licensee agreements and become hardware maker. The Zune soon followed, albeit much too late.

    Apple is leading the market this time, not a bit player like in 1995 when Windows took over on the back of IBM. This time MicroSoft and Google must change to fit Apple’s model, not the other way around. If they don’t, they will lose.

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