Windows Mobile smartphone sales plunge 20% in Q3

Decline occurs despite overall smartphone growth

Sales of smartphones running the Window Mobile operating system declined by 20% in the the third quarter at the same time that smartphone sales with all operating systems surged 13%, according to an analysis of newly released sales data from Gartner Inc.

The fact that Windows Mobile sales declined may not be a surprise, but the size of the decline is. The third quarter ended before an upgraded operating system, Windows Mobile 6.5, began shipping in October, too late to have an effect on sales figures.

But even sales of version 6.5 look lackluster.

Gartner analyst Carolina Milanesi, asked by e-mail today if Windows Mobile will get a boost in the fourth quarter from the new Windows Mobile 6.5, responded: "No, not really ... you might see enough traction that might stabilize the decline."

Microsoft CEO Steve Ballmer criticized Windows Mobile in late September, saying that Microsoft had "screwed up with Windows Mobile." The company had recently reorganized the Windows Mobile team in advance of the 6.5 release and next year's 7.0 release.

Several industry analysts have questioned whether Windows Mobile will last beyond version 7.0.

They have explained their pessimism by noting that the operating system has been in the market far longer than the popular Apple Inc. iPhone but is still fourth in global rankings for smartphones. Some say that Microsoft might want to focus more on its Office applications as a money maker, rather than Windows Mobile.

Windows Mobile runs on dozens of different cell phones and smartphones by several device manufacturers. Only 3.2 million smartphone units running the OS were sold in the third quarter, Gartner said, down 20% from the 4.05 million phones sold in the third quarter of 2008.

As such, Windows Mobile had 7.9% of the total smartphone OS market in the third quarter, out of a total of 41 million smartphones sold to end users, Gartner said. Symbian, the OS used by Nokia devices, finished first with 44.6%, while Research in Motion's BlackBerry OS finished second with 20.8%, and the iPhone finished third with 17.1%.

Phones running Google's Android operating system began appearing on only a few smartphone models, including the G1, by the third quarter and sold 1.4 million devices, giving it a 3.5% share, Gartner said.

Android is expected to gain steady ground in the fourth quarter and speed up in 2010 with several manufacturers offering dozens of different models. The Motorola Droid, which launched last Friday with Verizon Wireless, runs Android 2.0.

Gartner in September forecast that by 2012, Android will have 18% of the smartphone market with 94 million units sold, zipping upward into the second spot behind Symbian, with BlackBerry in third, the iPhone in fourth and Windows Mobile ranking fifth.

Gartner explained the phenomenal gains its expects for Android as stemming from the influence of Google applications and services and the open nature of Android. Some other analysts, including those at ABI Research Inc., have significantly lower forecasts for Android in 2012 than Gartner, although they still see strong Android growth.

Gartner's Milanesi noted that while Android is an open OS, it will be far from uniform on all devices, even though the Android OS share data will be reported by Gartner together as the data for Windows Mobile is. Manufacturers want to differentiate themselves within the Android platform, sometimes with software services and layers, she said.

For example, HTC has launched its "Sense" user interface with Android while Motorola has announced Motoblur, its Web-based service, on the Cliq device using Android. Meanwhile, Motorola's Droid smartphone, which runs Android, does not include Motoblur, even though some analysts and reviewers said it should, to make managing contact information easier.

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