The Windows Phone is dead right? Apparently not-survey after survey indicates that Microsoft Corporation (NASDAQ:MSFT)’s mobile platform is gaining strength. In fact, Windows is growing faster than and other operating system and its best days might still be ahead.
Quiet success story
This conclusion is based on recent numbers from Kantar WorldPanel ComTech. It shows Windows increased its U.S. market share from 2.9% in the second quarter of 2012 to 4% in the second quarter of 2013, for a gain of 1.1 points. While iOS and Android battle for the title of the top selling mobile operating system, Windows is quietly stealing share.
| Smartphone OS Sales Share (%) | Q2 2013 | Q2 2012 | YoY % pt. Change |
|---|---|---|---|
| Android | 51.5 | 52.6 | -1.1 |
| iOS | 42.5 | 39.2 | 3.3 |
| Windows | 4.0 | 2.9 | 1.1 |
| BlackBerry | 1.1 | 4.0 | -2.9 |
| Other | 0.9 | 1.4 | 0.5 |
Source: Kantar WorldPanel ComTech
And Windows success isn’t restricted to the U.S. The platform is picking up share overseas as well. In Europe, Windows took 6.9% of smartphone sales during the second quarter gaining 2.2 percentage points year over year. Windows is consolidating its position as the third operating system on the continent accounting for 9% and 8.6% of smartphone sales in France and Britain respectively.
Nokia Corporation (ADR) (NYSE:NOK) has been the biggest beneficiary of this trend. The Finnish handset manufacturer is responsible for 87% of Windows handset sales globally. Although it made up only 4% of smartphone sales worldwide during the first quarter of 2013, Nokia Corporation (ADR) (NYSE:NOK) has seen its share of sales rise from just 1% during the same period last year. Finally, Nokia Corporation (ADR) (NYSE:NOK)’s bet on Windows appears to be paying off.
But the best day are still ahead
Fortunately for Microsoft Corporation (NASDAQ:MSFT) investors, these positive results are expected to continue. According to estimates by Canalyst, Windows is expected to start closing in on the iPhone with 12.7% of smartphone sales worldwide versus the iPhone’s 14.1% by 2017. Three trends are driving this growth.
First, Windows Phones are particularly popular with first time smartphone buyers. Of those that bought a Windows handset in the past year, 52% upgraded from a feature phone. With feature phone owners still making up over half of U.S. mobile phone owners, Microsoft Corporation (NASDAQ:MSFT) is well positioned to capture this market.
Second, Microsoft Corporation (NASDAQ:MSFT)’s main competitor for the industry’s bronze medal is in disarray. Over the last none months BlackBerry Ltd (NASDAQ:BBRY) has lost eight million subscribers. The company’s BB10 launch is a flop. Last quarter the struggling Waterloo company moved only 2.7 million BB10 devices falling well short of the street’s expectations.
