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5 steps Microsoft can take to beef up Windows Phone 8 market share

According to IDC's most recent data Windows Phone sales increased by 77% year over year, but its market share is still dwarfed by iOS and Android.

A little over a year and half ago, I wrote about an IHS and iSuppli smartphone market report, which claimed that Windows Phone would surpass iOS in market share by 2015, due in part to Nokia’s aggressive push into the space and Microsoft’s huge marketing blitz. In the conclusion of that post, I said IHS/iSuppli’s prediction that Nokia would dominate in the Windows Phone space seemed feasible, but that the massive growth the firm predicted for the mobile OS itself seemed highly optimistic at best. Well, it turns out we were both sort of right—iOS has stumbled, and Windows Phone gained some ground, but the numbers were way off.

Just the other day, IDC released the most recent information available via its Worldwide Mobile Phone Tracker and showed that Windows Phone’s unit shipments increased an impressive 77.8% year-over-year. As a result, Windows Phone’s market share had increased from 3.1% to 3.7%. From the report:

"Windows Phone posted the largest year-over-year increase among the top five smartphone platforms, and in the process reinforced its position as the number 3 smartphone operating system."

IDC claims there were two main reasons for the huge growth: Nokia’s release of two new smartphones and that multiple wireless operators were now selling Windows Phones.

Despite the relatively good news, Windows Phone’s appeal with other phone manufacturers remained limited. Also from the IDC report, “Beyond Nokia, Windows Phone remained a secondary option for other vendors, many of which have concentrated on Android.” This is evidenced by that fact that Nokia accounted for 81.6% of all Windows Phone smartphone shipments during 2Q13. Talk about putting all your eggs in one basket.

In that same time frame, Android and iOS shipments obliterated Windows Phone, but iOS did cede market share, while Android continued to dominate all comers. In the report from last year, iSuppli projected that iOS’s market share would dwindle to 17.3% by this year. But according to IDC, that number has actually shrunk much faster. In IDC’s report, iOS worldwide market share dipped down to only 13.2%, though it’s important to point out that Apple will likely gain some ground again after its upcoming new product launch (which is slated to happen on September 10, if the most recent rumors are true).

Though Windows Phone continues to show signs of life, it’s going to take a miracle for Microsoft to quickly gain more ground. Rumor has it Apple has a “cheap” iPhone planned, which will potentially help Apple in emerging markets. A new high-end iPhone will also be inevitably coming, which will also help Apple’s prospects moving forward.

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Credit: IDC

IDC Worldwide Mobile Phone Tracker, August 2013

And then there’s Android. Android, quite simply, is a juggernaut. It account for almost 80% of smartphone market share and shows no signs of slowing down. If anything, Android manufacturers have stepped up their game as of late, and new high-profile devices from Motorola, Samsung, HTC, LG and others are all coming down the pipeline.

If Microsoft is to succeed long-term in the smartphone space, it has to do five things in my opinion.

  • First, it must rehabilitate its image on the desktop and in tablets—hopefully Windows 8.1 helps that situation. People need to see Microsoft in a more positive light.
  • Second, Microsoft needs to attract more developers to produce Windows Phone apps. Too many high-profile apps are missing from the Windows Phone marker.
  • Third, Microsoft must incentivize smartphone manufacturers to actually adopt Windows Phone. As nice as Nokia’s devices are, Microsoft simply needs more partners and other attractive devices in the marketplace.
  • Fourth, Microsoft must somehow push every major wireless operator to carry Windows Phone. Windows Phone should at least be an option for anybody shopping for a smartphone.
  • And finally, perhaps most importantly, Microsoft has to figure out a way to educate the wireless operators’ salespeople on Windows Phone. Walk into virtually any AT&T store (or electronics store that sells smartphones) and talk to the salespeople about Windows Phone. There will rarely be any excitement for the platform. It may be time for Microsoft to spend some big money and setup Windows Phone stores within-a-store, staffed with Windows Phone experts, to woo consumers to the platform.

One thing is for certain - despite the relatively good news, Microsoft’s got to do something major if it wants to succeed in the smartphone space. The current plan just ain’t cutting it.

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