Is Microsofts Windows Phone Making Any Progress?
Microsoft's Lumia 735. Source: Flickr userTechStage.
For those interested in the smartphone operating system wars, the focus is mostly on two of the competitors. On one hand, you have market-share leader Google Android, which commands the lion's share of the market. On the other, you have premium vendor Apple , which is less concerned with market share, and more concerned with profit.
Mostly omitted from discussion is Microsoft's Windows Phone. To some extent, the oversight is rather understandable considering the OS commands less than 10% of the global market, according to Kantar Worldpanel's data. However, it's always important to assess all major competitors in terms of progress. After perusing Kantar's recently released market share report for the three months ended Feb. 2015, the picture is decidedly mixed.
All things considered, good performance in the U.S and great performance in AustraliaAlthough Microsoft doesn't command a large market share in the United States, this is an important market. As the third-largest country by population, and as a country with a high amount of disposable income, incremental progress in the U.S. has the potential to reward shareholders. On a year-over-year basis, Windows OS improved by 0.3 percentage points, to register 4.8% market share. When one considers Apple released its wildly successful iPhone 6 and iPhone 6 Plus a few months before this report, Microsoft holding serve and increasing market share is a good sign.
In another former British colony, Australia, the company reported surprisingly strong progress. Microsoft launched the Lumia 435 and Lumia 532 in late February, and appears to have found an interested group of consumers in this relatively small country. The company increased its market share by 4.3 percentage points on a year-over-year basis -- going from 5% market share to 9.3%.
There's progress in the all-important European market, but it's a mixed bag For Microsoft, the European markets have always been the most important. You'll remember the company formed a strong relationship with Finnish handset maker Nokia before buying its phone business in 2014 for $7.2 billion. Out of the nine markets for which Kantar provides data, four out of the five largest markets for Windows Phones are in Europe. In the five largest European smartphone markets -- the so-called EU5 -- Microsoft increased its overall market share by 1 percentage point, to 10.1%, on a year-over-year basis.
On a country basis, the numbers were decidedly mixed. The company's strong showing in France -- a market share increase of 5.9 percentage points (8.3% to 14.2%) -- and a small increase in Germany of 0.7 percentage points (7.5% to 8.2%) were enough to offset minor market share drops in Great Britain, Spain, and Italy. The Italian market is important because Microsoft still has a 14.4% market share there -- its best showing in any major market.
Asia is tough on Microsoft The Asia market surveyed by Kantar has been tough for Microsoft. Japan is decidedly pro-Apple iOS,while urban China has rallied around Android-based vendors for the bulk of its market. In both countries, Kantar is registering less than 1% market share for Microsoft, and it appears Microsoft isn't attempting to strongly compete in these particular markets at this time.
For a great visual of these percentages in every surveyed market, here's Kantar's data:
This business isn't crucial to investors, but it's good to see improvement For Microsoft, the core business is the licensing of its Microsoft Windows and Office suite of products. For example, last fiscal year, its phone business provided nearly $2 billion in revenue, while its licensing business (total licensing, commercial and consumer) provided nearly $60.8 billion of its $86.8 billion revenue haul.
For shareholders, it's good to see Microsoft improving in this non-core business; but it's not entirely crucial for strong financial performance.
The article Is Microsofts Windows Phone Making Any Progress? originally appeared on Fool.com.
Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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