Microsoft's Windows Phone 7 Likely Had Rocky Sales Start

Microsoft's share of the smartphone market, according to comScore, hints that Windows Phone 7 is having some issues with consumer adoption.

Microsoft refuses to break out exact numbers for how many Windows Phone 7 devices have sold to consumers.

This was somewhat understandable in the first weeks and months following the smartphone platform's release in late 2010. Instead of following in the path of Apple and Google, both of which like to periodically announce how many of their respective mobile operating systems are being activated per day, Microsoft chose to embrace a different tactic, with executives informing various news outlets that Windows Phone 7's numbers are roughly "in line" with those of other first-generation smartphone platforms. 

During this year's Consumer Electronics Show in Las Vegas, Microsoft representatives told eWEEK that the company had never made a habit of releasing numbers associated with Windows Mobile, hinting that it would likely continue that tradition-at least in the near term-with Windows Phone 7.

Indeed, the closest Microsoft came to releasing an "official" consumer-sales number was in January, when it admitted that manufacturers had sold some 2 million Windows Phone 7 units to retailers.

But as the months wear on, the pressure could start to build for Microsoft to offer some sort of definitive number. That pressure could come thanks to research firms like comScore, whose mobile market share predictions are widely disseminated by the press.

In a May 6 research note, comScore suggested that Microsoft's percentage of the U.S. smartphone market dipped from 8.4 percent to 7.5 percent between December 2010 and March 2011. This places the company fourth behind Google, Research In Motion and Apple. (Palm, which Hewlett-Packard is trying to resurrect as a viable mobile competitor, experienced the same 0.9-point drop as Microsoft.)

There's at least one caveat behind that number. Microsoft is desperately attempting to leave behind Windows Mobile, Windows Phone 7's increasingly antiquated and fragmentary predecessor. Windows Mobile devices can't be upgraded to Windows Phone 7, and its gradual demise, as businesses and consumers abandon it, could be affecting the trend data of not only comScore, but also the other firms measuring Microsoft's performance in the smartphone space.

In comScore's estimation, Microsoft also didn't suffer to the same degree as RIM, which experienced a 4.5 percent dip between December and March. But RIM is still managing-barely-to hold onto second place in the U.S. smartphone market.

In the meantime, new data from The Nielsen Company suggests that 6 percent of consumers indicated they wanted a Windows Mobile/Windows Phone 7 smartphone as their next device, compared with 31 percent for Android, 30 percent for Apple's iOS and 11 percent for RIM's BlackBerry.

With these sorts of numbers drifting around-and Microsoft staying largely silent, except to tout the supposed growth of its app developer community-questions inevitably arise about Windows Phone 7's vitality despite the company's hundreds of millions of dollars in development and promotion.

Speaking longer-term, Microsoft's alliance with Nokia, which will see Windows Phone 7 ported onto the latter's hardware, has the potential to radically change the current smartphone game. In a March note, research firm IDC predicted that Windows Phone 7 will eventually surpass RIM and Apple's iOS to become the second-most ranked smartphone operating system in the world by 2015.

"The new alliance brings together Nokia's hardware capabilities and Windows Phone's differentiated platform," IDC analyst Ramon Llamas wrote in that report. Although Nokia's ownership of the U.S. smartphone market is negligible, IDC suggests that its Symbian operating system powers some 20.9 percent of smartphones worldwide-presumably, if the changeover to Windows Phone 7 occurs with little attrition, then Microsoft stands to enjoy a massive bump in market share.

That being said, even Nokia's recently released Form 20-F 2010 Report, submitted to the U.S. Securities and Exchange Commission, hints at the substantial risks inherent in the transition to Microsoft's smartphone platform.

And in the meantime, comScore's numbers suggest that Windows Phone 7's first few months out of the proverbial gate have been a little rocky.

Microsoft could dispel much of the blogosphere chatter about its relative strength or weakness in mobile by releasing some numbers. If the numbers in question are terrible, then the company could blunt the damage with a bit of spin-perhaps comparing the data to that of other smartphone platforms that eventually went on to do well.

But for the moment at least, the company's staying silent, while outside research firms paint something of an unrosy current picture.