Microsoft's Windows Phone Market Share Declined in 2014
Microsoft is set to end 2014 with a smaller share of the smartphone market than it did at the end of 2013, according to a data released by market analysis firm IDC on Monday.
Windows Phone is expected to have 2.7 percent market share by year's end, the market research firm said in its latest worldwide smartphone forecast. That's down from the 3.3 percent share it captured in 2013.
On a brighter note, IDC expects Windows Phone device shipments to be slightly higher, reaching 35 million units this year compared to 33.4 million last year. In addition, Windows Phone is set to more than double its current market share by 2018 to 5.6 percent, according to IDC's estimates.
However, that will not be enough to lift Windows Phone out of its distant third-place spot behind market leader Google Android and runner-up Apple iOS. IDC expects Android to capture 82.3 percent of the smartphone market in 2014; iOS is expected to have 13.8 percent market share. By 2018, Android and iOS are still expected to be the clear No. 1 and No. 2 OSes, respectively, though with slightly lower market shares (a projected 80 percent for Android and 12.8 percent for iOS).
Average smartphone prices are expected to decline over the next four years from $297 to $241. However, IDC contends that new and "underdog" platforms will have to compete on feature, instead of price, to make a dent in the market.
"With Android volumes so dominant, it is no longer a possibility for new operating systems like Tizen and Firefox to compete on price alone -- any underdog OS must bring a radically different appeal to gain any significant traction," the firm said.
Over recent months, IDC has pointed to Microsoft's growing stable of smartphone hardware partners -- the company says it has added 14 OEMs this year -- as a way for it to grow its market share, particularly in emerging markets where lower-end Windows Phone devices still have a shot against Android. However, Microsoft was recently struck a blow by Huawei, a key manufacturer in the important Chinese market, which has decided to shelve its plans for future Windows Phone devices.
"We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone. It wasn't profitable for us. We were losing money for two years on those phones. So for now we've decided to put any releases of new Windows phones on hold," said Richard Yu, director of Huawei's consumer business, in an August interview with The Wall Street Journal.
This week, another Huawei executive pointed to low Windows Phone sales as the reason it is abandoning the platform: "Nobody made any money in Windows Phone," said Joe Kelly, head of international media affairs at Huawei, in a Seattle Times interview.
IDC projects that Windows Phone will account for just $7.8 billion (about 2 percent) of the $382.9 billion in revenue expected to be generated by the smartphone market in 2014. iOS is expected to generate $116.5 billion (30.4 percent), and Android $255.1 billion (66.6 percent).