Microsoft was late to the smartphone game. Microsoft CEO Steve Ballmer himself laughed at the iPhone when it was released, calling attention to what he considered the device’s outrageous price. More than six years on, Microsoft is still trying to buy its way into the high-end smartphone game, leveraging its Windows brand and Nokia to make Windows Phone a competitive platform.
A new report out today from market research firm Canalys shows that it may just be working, if only a little. The report shows that the Windows Phone platform grew 69% year-over-year in 2013, making up 3% of the smartphones shipped during the previous year. This growth may be encouraging for Microsoft, but the company will still have years to go and hundreds millions of smartphones to ship before it catches up with industry leaders.
“The soft end to the year stopped Microsoft from achieving still more positive growth,” said Jingwen Wang, analyst at Canalys. “Market uncertainty and caution affected Nokia’s performance in Q4, with Microsoft’s acquisition of its devices business yet to complete, as did arguably insufficient marketing, as Nokia and Microsoft failed to stimulate sufficient demand for the latest Lumia products to deliver a seasonal sales boost. With Lumia accounting for such a dominant portion of Windows Phone shipments, the growth of the OS faltered too. It will be vital that on completion of the acquisition, integration takes place quickly and thoughtfully. Microsoft has much to do if it is to continue carving out a growing share of the smart phone market, not least driving the platform down to new entry-level price points, delivering innovation and new features, particularly at the high-end, and proactively working with, supporting and encouraging developers to commit to building compelling apps, and bring its app story closer to parity with its competitors. It cannot afford lengthy delays or distractions, and the combined Windows Phone devices team needs to hit the ground running.”
Canalys’ numbers show that nearly 1 billion smartphones were shipped during 2013. Android continues to dominate as a platform with a 79% market share, followed by Apple’s iOS with 15%. Samsung and Apple still largely dominate the industry, though Chinese brands are making headway. In particular, Lenovo’s recent purchase of Motorola from Google may help Lenovo penetrate the Apple-dominated U.S. market.
Image via Nokia