Microsoft said last month that phone manufacturers had sold 1.5 million Windows 7 Phones. But at least one manufacturer is not at all pleased with sales. LG said that its sales numbers so far have been disappointing, although it's hoping for a pick-up later this year, with the release of lower-end Windows 7 phones.
The Pocket-lint site interviewed James Choi, marketing strategy and planning team director of LG Electronics Global about Windows Phone 7, and Choi was clearly not pleased with sales. He said:
"From an industry perspective we had a high expectation, but from a consumer point of view the visibility is less than we expected."
Choi believes that Windows Phone 7 won't catch on with techies, and instead will eventually sell well to people who want a simple phone that is, in his words "boring." Here's his explanation:
"For tech guys like us it might be a little bit boring after a week or two, but there are certain segments that it really appeals to. We strongly feel that it has a strong potential even though the first push wasnt what everyone expected."
The problem with Windows Phone 7 sales, he believes, is that the initial phones were high-end and high-priced, but the ideal audience is looking for a less-expensive phone with fewer features:
"There is a lot of scepticism at the moment, but once Windows Phone 7 handsets that are mid-tier to low tier start appearing the market share will grow. Right now it's only exclusively present in a high tier, because of its hardware requirements, and that's limiting growth".
LG is generally known as a seller of less-expensive phones, so it's no surprise that he hopes lower prices will lure more customers. But if he's right and the low end is the sweet spot for Windows Phond 7, then Microsoft may be in trouble.
The big sellers in smartphones aren't low-end phones; they're decidely high end, such as the iPhone, Droid X, HTC Incredible, and others. So low cost doesn't necessarily mean high volume.
In addition, with Windows Phone 7, Microsoft isn't looking just to make money from selling copies of the operating system. More than that, it needs a way to gain revenue from mobile advertising, in the same way that Google is benefiting from Android. Buyers of low-end phones will likely spend less time online than owners of higher-end phones. So if Windows Phone 7 becomes the bargain-basement alternative to Android and the iPhone, Microsoft won't be pleased.