Windows Phone's Q4 share stumbles as Nokia's sales slump

As Nokia's fortunes go, so goes Microsoft's shot in smartphones

Windows' share of the smartphone market fell slightly in the December quarter as the biggest manufacturer supporting Microsoft's operating system, Nokia, posted less-than-stellar sales numbers, research firm IDC said today.

According to estimates compiled by the firm, 8.8 million Windows Phone smartphones were shipped worldwide in 2013's fourth quarter, a 7 percent decline from the quarter before, when some 9.5 million devices were shipped.

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That reduced Windows Phone's share of the total smartphone market to 3 percent from the 3.6 percent of the quarter prior.

The fall in Windows Phone shipments and share were not unexpected: Three weeks ago, Nokia reported sales of 8.2 million Lumia handsets, its flagship powered by Microsoft's OS. That number that was 7 percent off the previous quarter, when the Finnish firm sold 8.8 million.

Nokia continues to be the only smartphone maker determined to push Windows Phone. According to IDC, Nokia accounted for 89 percent of all Windows Phone-powered device shipments in the December quarter.

"The big question for Windows Phone is, 'How much can Nokia do by itself?'" said Ramon Llamas, an IDC senior analyst and the program director of the researcher's mobile phone tracking reports.

None of the other major handset makers -- Huawei, HTC, Samsung, Lenovo and the like -- have committed to Windows Phone in any meaningful way. Instead, they have continued to roll out a large variety of devices powered by Google's Android mobile OS, which costs them less to put on their devices than would a license for Windows Phone.

Microsoft is in the latter stages of its acquisition of Nokia's handset business and a broad patent deal that will run the U.S. technology company about $7.4 billion. Former CEO Steve Ballmer, who was replaced this month by Satya Nadella, pushed that deal through after he announced his retirement.

"A lot of people are waiting to see what Microsoft will do with Nokia," said Llamas. "But even if Windows Phone is going to be just Nokia, there are things Microsoft can do, such as broader distribution [through carriers]. In mobile, distribution is the name of the game."

Nokia's Lumia Icon, which was announced today as a Verizon-exclusive, is a perfect example, said Llamas. "That would be a great phone for Sprint, too," he said of the 5-in. smartphone set to launch Feb. 20.

For all of 2013, Windows Phone's share of all shipped smartphones was 3.3 percent, an impressive 91 percent increase from the admittedly very small 2.4 percent share of 2012, but still far from breaking through the double-digit bar.

Some have pinned hope for Windows Phone's success on a merging of the OS with Windows RT, the touch-first tablet operating system. According to recent leaks of Windows Phone 8.1, slated to ship in April, Microsoft will make headway toward that goal, but will not finish the merger until 2015.

A blend of Windows Phone and Windows RT would allow developers to write one app that would run on both smartphones and tablets, with a single app market. That strategy was first popularized by Apple, followed by Google, but is not yet possible in Microsoft's ecosystem.

Llamas was non-committal about whether such a merger would dramatically change Windows Phone's fortunes. "It wouldn't hurt to have a unified platform," he said today.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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This story, "Windows Phone's Q4 share stumbles as Nokia's sales slump" was originally published by Computerworld.

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