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BLOG: Microsoft's mobile corpse stirs with signs of life

Preston Gralla | June 4, 2013
The numbers Microsoft is posting in mobile aren't at the level it is accustomed to in areas like desktop operating systems and productivity suites. But they're on the rise.

Microsoft's mobile computing initiatives have been written off as DOA for years. But something has been happening while you weren't looking: Microsoft is beginning to show flickering signs of life in the mobile sphere.

Up to now, Microsoft's failures to get a foothold in mobile computing have been spectacular. It had a smartphone operating system and a tablet years before Apple, but it could never capitalize on that head start. Internal turf wars, technology false starts and a lack of understanding about how people really want to use mobile devices all played a role in Microsoft's mobile demise. The company's low point may have been the 2010 release of the Kin, a phone that required a data contract but couldn't run apps. After less than two months on the market, Microsoft mercifully pulled the plug. It was an expensive and embarrassing venture; Microsoft had paid an estimated $500 million or more to buy the company that made the Kin, and it took a $240 million write-off for killing it.

Of course, Microsoft is nothing if not persistent when there are markets to be conquered. It's still taking a whack at mobile, with Windows Phone and the Windows 8 and RT tablets. Still without much traction, though. The obituaries have been written, if not published. But it may be too soon to call for the last rites: People are starting to buy Windows 8 tablets and Windows phones.

Microsoft's mobile numbers aren't at the level it's accustomed to in areas like desktop operating systems and productivity suites. Windows tablets are at 7.5% market share, according to Strategy Analytics. IDC says Windows Phone 8 devices were at 3.2% in the first quarter. Those figures aren't likely to worry Apple and Google too much -- yet. But they're on the rise. The Microsoft mobile corpse has been reanimated.

Let's put those numbers in perspective. Microsoft's tablet share is dwarfed by Apple's 48.2% and Android's 43.4%. But a year ago, the Windows numbers were so insignificant that Strategy Analytics wasn't even tracking them.

As for Windows Phone, that minuscule 3.2% is enough to make it the third most popular smartphone operating system, surpassing BlackBerry's 2.9%. Of course, Android, at 75%, enjoys the kind of market share that Microsoft is used to commanding. But momentum matters, and that's something Apple is in a position to appreciate. Its iOS has a 17.3% market share. A year ago, it had 23%, against Windows Phone's 2%. So in 12 months, the gap between iOS and Windows Phone shrank from 21 percentage points to 14.1.

Can Microsoft capitalize on its momentum? I wouldn't bet against it. It is poised to roll out budget smartphones, which will help with its strongest smartphone demographic, first-time buyers. Mary-Ann Parlato, an analyst at Kantar Worldpanel ComTech, wrote in a recent report that "with over half of the US market still owning a featurephone, it's likely that many will upgrade over the coming year, which will ultimately contribute to more growth for the Windows brand." And Microsoft has published design specs for 7-in. Windows 8 tablets, which would help it compete in the fast-growing market for small tablets.


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