Windows Phone news

The news isn't good for Windows Phone

As smartphone shipments soar, Windows Phone's market share drops to 2.5% in Q2, IDC says

As global smartphone shipments hit a historic high of 301.3 million in the second quarter, the third-ranked operating system, Microsoft's Windows Phone, saw its share of that pie stumble to well below 3%.

Windows Phone-based devices have been shipping for four years, but they accounted for only 2.5% of the total smartphone market in the second quarter of 2014, down from 3.4% in the same period a year earlier, IDC reported Thursday. Overall Windows Phone shipments for the second quarter totaled about 7.4 million, down 9.4% from 8.2 million a year earlier, IDC said.

Meanwhile, shipments of Android phones from various manufacturers, including Samsung, HTC, LG and Motorola, surged by 33%, to 255.3 million in the second quarter. Android devices accounted for 84.7% of overall smartphone sales during the period.

Shipments of Apple's iPhone grew by 12.7% to 35.2 million, though the iPhone's market share fell to 11.7% from 13% a year earlier.

"It's been an incredible upward slog" for Windows Phone and other smaller [operating systems] in the smartphone market," said IDC analyst Melissa Chau in a statement. "Windows Phone has been around since 2010 but has yet to break the 5% share mark."

Windows Phone did slightly better in the second quarter than it did in this year's first quarter -- though IDC said the sequential improvement was statistically insignificant.

The continuing problem facing Microsoft and other small players in the mobile operating system market is getting partners, mostly manufacturers and developers. Developers tend to work in small shops and can reduce their workload by working with just the two primary smartphone platforms, Android and Apple's iOS, Chau said.

But Microsoft could sign more manufacturing partners for Windows Phone in the second half of 2014, IDC said, citing BLU, Micromax, Prestigio and Yezz as possibilities. In addition to Nokia, which it now owns, Microsoft is currently working with manufacturers Foxconn, Gionee, JSR, Karbonn, Lava, Lenovo, LG, Longcheer and ZTE.

In late May, IDC predicted Windows Phone would account for 3.5% of the smartphone market for all of 2014, with 43.3 million smartphones shipped. However, the second quarter shipments of 7.4 million Windows Phone devices suggests that 43.3 million shipments for the year could now be out of reach.

IDC analyst Ramon Llamas said in an interview Thursday that the research firm is updating its full-year 2014 smartphone forecast. He added that how well Windows Phone performs for the full year depends on how well Microsoft works with new manufacturing partners and its new Nokia unit, which officially became part of Microsoft in April.

Since the second quarter ended on June 30, uncertainty about the future of Windows Phone has escalated, and there are now more questions about its viability than there have been at any time since the operating system debuted in 2010.

Smartphone market share chart
Windows Phone has never held a market share of more than 5% since its debut in 2010.

In July, Microsoft announced that it will lay off 18,000 workers, including 12,500 from the recently added Nokia unit. It also said it would drop its low-end line of Nokia X Android phones.

Those moves prompted some analysts to question the long-term future of the Windows Phone platform.

A recent Good Technology report found that Windows Phone was used in only 1% of 5,000 enterprises surveyed in the second quarter. In comparison, iPhones and iPads were used in 67% of enterprises, and Android smartphones and tablets in 32%.

The 2.5% Windows Phone Q2 market share reported by IDC was even lower than the 2.7% share reported by Strategy Analytics. IDC's count of 7.4 million Windows Phones shipped was also less than the 8 million Strategy Analytics tallied.

Samsung, the world's biggest smartphone maker, credited with 29.3% of all Android-power smartphone shipments for the quarter, also makes phones based on the Tizen operating system, but it hasn't seen sales of those devices make a significant impact, IDC noted.

Shipments BlackBerry devices rose slightly from the first quarter to the second quarter, but sales were still 78% lower than they were a year earlier, at 1.5 million smartphones. That gives BlackBerry market share of 0.5%, down from 2.8% in the second quarter of 2013.

The record 301.3 million smartphones shipped in the second quarter represented an increase of 25.3% from 240.5 million in the second quarter of 2013, according to IDC.

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