News

Windows Phone Left Out of Smartphone Market Boom

• By Gladys Rama
• August 14, 2014

The market for smartphones is bigger than ever, but Android and iOS continue to vastly outperform all other platforms, including Windows Phone.

Global smartphone shipments passed the 300-million-mark for the first time in the second quarter of 2014, ballooning by over 25 percent from the year-ago period, according to data released Thursday by IDC.

The vast majority (over 96 percent) of those smartphones ran Google Android and Apple iOS. In fact, those those were the only two platforms that experienced year-over-year shipment growth in Q2. Android, which accounted for nearly 85 percent of the market, increased its shipments by 33.3 percent over last year's Q2. iOS, with market share of nearly 12 percent, grew its shipments by a more sedate 12.7 percent year-over-year.

Windows Phone's share, meanwhile, slipped from its already low perch. It captured just 2.5 percent of the market in Q2 2014, down from 3.4 percent in Q2 2013. Its shipments declined by over 9 percent year-over-year, according to IDC's data, totaling just 7.4 million.

"It's been an incredible upward slog for other OS players," noted Melissa Chau, IDC senior research manager, in a prepared statement. "Windows Phone has been around since 2010 but has yet to break the 5% share mark ... The biggest stumbling block is around getting enough partnerships in play -- not just phone manufacturers but also developers, many of which are smaller outfits looking to minimize development efforts by sticking to the two big ecosystems."

Microsoft has made some strides in growing its stable of Windows Phone manufacturers, adding at least 11 new OEMs this year. However, it is still struggling to encourage developers to create apps for the OS. Currently, there are over 300,000 Windows Phone apps, compared to over 1 million for Android and iOS each.

Microsoft has signaled in recent months that it intends to focus more of its smartphone efforts in the low-end device space, which has historically been the domain of Android. For instance, it has plans to transition the low-end Nokia X from Android to Windows Phone, positioning it as an entry-level device for consumers in emerging markets or first-time buyers. This is a strategic move, given than over 61 percent of all Windows Phone shipments in Q2 were devices that cost $200 or less (see table). By comparison, a slightly smaller percentage of all Android shipments (59 percent) were in the low-end category.

However, because of its much higher volumes, Android remains the platform of choice in the low-end market.

"With many of its OEM partners focusing on the sub-$200 segments, Android has been reaping huge gains within emerging markets," noted IDC Research Manager Ramon Llamas, adding, "With the recent introduction of Android One, in which Google offers reference designs below $100 to Android OEMs, the proportion of sub-$200 volumes will climb even higher."

IDC noted, however, that Windows Phone could become more competitive in the low-end market during the second half of the year, when its new OEMs -- many of which are located in emerging economies -- begin releasing devices.