Windows Phone market share continues decline

Microsoft’s U.S. mobile OS market share has lost ground for yet another month, regardless of its promising Windows Phone 7 reboot in October 2010. comScore has dished out it’s most recent set of stats and Microsoft’s U.S. market share has fallen to 8% as of January 2011, down about 1.7% since WP7s launch. It’s not as bad of a slide as RIM’s 5.4% nosedive during the same period but it is a significant decline from the 15.7% market share Microsoft had this time last year. However, there is some silver lining to this so if you see a WP7 fanboy shedding tears quietly by a river, tell him to come back as it will get better.

First take a peek at the chart above that I made as it shows the long term decline of Microsoft’s U.S. mobile market share. Although Microsoft’s market share has been falling steadily over the last year, it was averaging a drop of about 2% each quarter. If Microsoft’s market share was declining at the same rate as it has been since 2009 we should have seen its U.S. market share drop to around 7% instead of 8%. So although Microsoft did see yet another decline in it’s mobile OS market share, the launch of Windows Phone 7 in October heavily applied the brakes on the decline for this last trimester, nearly halving its momentum. Windows Phone 7 has been reversing Microsoft’s misfortunes, you just don’t see it if you only look at the small picture.

What really is hampering down Windows Phone 7 sales is not that the software is still new and people are turned off by the lack of copy and paste, but it is the lack of availability and diversity in its product lineup. Take a peek at the screenshot on the right from Microsoft’s WP7 portal. Those are the currently available devices that are available to consumers. That’s not too shabby for a launch lineup, but pay closer attention to the carrier availability. Customers are limited to either AT&T or T-Mobile, with three of the devices exclusive to AT&T. To make matters worse, the only device that is offered through T-Mobile, is the HTC HD7. That means that the only hands-on experience with WP7 that T-Mobile customers can get in a T-Mobile store is with one phone. The Dell Venue Pro is available only via Dell’s website so the closest a customer will get to it pre-purchase is via the pictures on the website. You’d think they’d learn their lesson from Google’s mistakes with the Nexus One…

What Microsoft needs is to not only get more devices out there but to get them on more than just two carriers. Microsoft doesn’t have the momentum Apple did when it launched the iPhone so making their product available to the broadest audience possible is key. Unfortunately Verizon won’t be seeing a WP7 device until June, so expect the Windows Phone market share to dwindle again this quarter, but not by a lot. What Microsoft really needs to do is focus on getting their Nokia flagship device in the U.S. ASAP, and not in 2012 like they are projecting. Right now is the most crucial time for Microsoft to regain a piece of the pie that they have lost. The latest market share reports show that Microsoft is making it happen, but it is lacking that big punch it needs to change the decline into a gain. Hopefully Q3 2011 will pack that punch and hopefully 2012 won’t be too late.

Sources: InformationWeek, ComScore