Smartphone Wars: Lets do Windows Microsoft disaster, yes 5.8M total Lumia sold is now market share of 1.6% (and falling) (UPDATED)

Lets do the Microsoft Windows Phone Lumia piece in the Smartphone Wars coverage. This is not pretty.


NOTE update on the bottom issued on 29 Oct


Some thought the Nokia smartphone unit would thrive with Windows. It tanked. Some thought the new version of Windows would save it, it didn't. Some thought Nokia selling the handset unit to MIcrosoft would revive the former giant, nothing like that happened. I was the only analyst who correctly predicted all those catastrophies and was the most accurate at forecasting the true doom that followed. Some of my peers were bitten by the propaganda either from Stephen Elop the happy warrior setting oilrigs on fire with his famous memos, or else, bitten by the equally cheerful propaganda from the other baffoon of mobile, Steve Ballmer then CEO of Microsoft.

Then Microsoft changed the CEO. After 80% of the staff brought from Nokia have already been fired, some thought Microsoft could revive the Lumia unit with a total redirection of its strategy from a mass market to a few niche markets. I predicted that change would take Microsoft's approximately 3% market share even further down and hit 2% by year-end. It went even worse than that. Lumia sales now came in last week, at 5.8 million units. Down 31% from the previous quarter. At some point in the past, such a collapse would have been a world-record but this Nokia unit had re-set the world record standards to be so piss-poor that even this kind of crash is only 'par for the course'. Yes now in Q3 Microsoft ex-Nokia Lumia smartphones have a market share of 1.6% (and falling). Windows on smartphones is utterly totally beyond-repair dead. Dead dead dead. 

So yes Microsoft anounced 5.8 million Lumia smartphones were sold in the Q3 Quarter. That means about 1.6% market share. This is the pattern of Nokia smartphone unit market share with the main steps related to Microsoft identified:

Lumia (Nokia) Smartphone Market Share of Microsoft Recent History
Q4 2010 - 28.8% - (All Nokia software, no Windows even officially mentioned)
Q1 2011 - 23.9% - Microsoft announced as future smartphone OS provider
Q2 2011 - 15.4%
Q3 2011 - 14.0%
Q4 2011 - 12.4% - First Lumia smartphones running Windows start to sell
Q1 2012 -   8.1%
Q2 2012 -   6.7%
Q3 2012 -   3.6%
Q4 2012 -   3.0%
Q1 2013 -   2.9% - Migration to Windows Phone is complete
Q2 2012 -   3.2%
Q3 2013 -   3.5% - Nokia handset division sale to Microsoft announced, Elop removed from CEO
Q4 2013 -   2.9%
Q1 2014 -   2.5%
Q2 2014 -   2.6% - Microsoft takes over Nokia smartphone business, Elop back in charge of handsets
Q3 2014 -   2.9%
Q4 2014 -   2.8%
Q1 2015 -   2.5%
Q2 2015 -   2.5% - Microsoft fire Elop from running handset business, refocus strategy to niche markets
Q3 2015 -   1.6%
Source Official Quarterly Results of Nokia and Microsoft, plus TomiAhonen Consulting analysis of industry data, 27 Oct, 2015
This table may be freely shared

I told you this marriage would wreck Nokia (it did) and that it would not resurrect Windows to dominance in smartphones (it didn't). I said firing people would not fix the problem (it didn't). I said selling the unit to MIcrosot would not make things better (it didn't). And I said that even removing the cancer of Elop in charge, could not revive Lumia business (it didn't). I warned years ago, that this business was dead (it is) and that its market share will only decline (as it does). This is the annual market share of the smartphone business from fully owned by Nokia and not using Windows, to now (average of first 3 quarters of 2015)

Microsoft (Nokia) Smartphone Annual Market Share:
2010 - 34.8%
2011 - 15.9% - (MIcrosoft announced as new partner, first Lumia smartphones ship on Windows)
2012 -   5.0%
2013 -   3.1% - (All smartphones now run Windows, Nokia handset unit sold to MIcrosoft)
2014 -   2.7% - (MIcrosoft takes over as owner of handset unit)
2015 -   2.2% - (note this is average of only first 3 quarter sales, full year likely under 2.0%)
Source Official Quarterly Results of Nokia and Microsoft, plus TomiAhonen Consulting analysis of industry data, 27 Oct, 2015
This table may be freely shared

Yes, Windows Phone is dead. The Lumia unit at Microsoft is dead. Appliecaiton developers have abandoned this platform already long time ago, now news is spreading of many apps disappearing from the Windows Phone store, as app developers are REMOVING their existing apps from this dead platform.

I told you so. And so many pundits and 'experts' thought this partnership of Nokia and Microsoft would thrive and grow, or that Lumia on Windows Phone would grow, or some revival was possible. It isn't. I told you all the reasons why, on this blog. If you want to understand fully why Windows Phone is dead, read this blog from the summer. In it I said, Lumia will fall to 2% market share by the end of this year. They are now at 1.6% so that prediction can be called 'correct'. MIcrosoft's smartphone dream is collapsing even faster than I could guess. There is no way this can ever succeed. Lumia is on a death-watch. Expected date of expiration is about 2 years from when the last leadership change happend (half a year ago) so about 18 months is a reasonable time-frame of when they shut down this dead unit for good. Incidentially, also the Surface tablet business is struggling, so that was supposed to offer some serious synergies (hahahahahah)

Now we await the news from Tizen. What is the first quarter when Tizen from Samsung outsells this dead Lumia platform from MIcrosoft. PS expecting a couple of good news quarters soon in this corner, as Tizen is about to pass Blackberry shortly. Then they will chase Lumia... 


PS - UPDATE 29 October - Sony has just released their Q3 numbers and they sold 6.7 million smartphones. So yeah, in that Sweden vs Finland grudge-match where Swedish Ericsson phone business is wholly owned by Japan's Sony, and Finland's Nokia phone business is wholly owned by American Microsoft, now once again Sony (aka Ericsson) has surged ahead of Microsoft Lumia (aka Nokia). Congrats Sony for this small achievement well outside of the Top 10. But as both companies are making losses with their smartphone businesses, that is a very pyrrhic victory at this stage. Still if you want a loser, and a loser's loser. Then Microsoft Lumia is the latter.


Ok, now that Microsoft Lumia mess is done, lets wait for Apple's iPhone numbers out later today.

Comments

[pedling]

I believe that MS will go full android within a year...

1 Google and MS has settled their patent dispute.. that properly paves the way for MS can use android with G apps and services..

2 ms has startet developing a skin/Ui for android called Arrow.. YouTube it..

3. Lumias from the L640 has has software buttons that easily can be changed to a circle, a square and a triangle...

4. MS are doing more work and optimisations on MS apps for android that they ever did on Wp

[Henrik N]

I also think Microsoft will go full Android later in 2016 or as latest 2017. Maybe in a partnership with Cyanogen OS or some other player? Or maybe they just concentrate on traditional PC, hybrids and the tablet market (8" to 13" inch form factor), and just put MS apps on iOS and Android for the smartphone part.

I got a Lumia as a extra phone but now its all about apps and Microsoft not got them. And if they are there its often a older version compared to Android or iOS. We not here a lot of the Microsoft "Windows Bridges" program to so I wonder if Nadella more or less have pull out the plug for it.

For BlackBerry I can see a change/turnover for the company. I actually like the Priv model, not tested it but looks nice with fine specs. And of course it got Google Play.

[Tester]

Really no surprise here, this is precisely the trajectory that was to be expected judging from Nadella's recent decisions, which appeared to be intent on moving Windows Phone out of business without making non-tech-savvy investors noticing right away what the plan was.

And in retrospect I was right when I thought that selling the phone unit to Microsoft was a brilliant move by Nokia, even though some people thought they were selling cheap. As it appears now, nothing could be further from the truth. Nokia not only got rid of the terminal smartphone unit - no - they set it up so that Ballmer in his desperate situation had to buy the already dying dumbphone unit along just to get something that wasn't worth any money. Now that all the money had to be written off and Microsoft still faces the costs of winding down the units, since it has become certain that no rescue is in sight, it becomes even more apparent what a smart move this was on Nokia's part.

What I'm wondering about now is, where will that leave the 'modern' Windows UI and its assorted baggage on the desktop?

Fact is that this has been immensely unpopular among Windows desktop users, I, for example, have never downloaded a single app from the store, all the stuff I was able to sample didn't convince me the slightest, for every single 'modern' solution there's a better 'classic' alternative.

And without the bridge to mobile there's even less motivation to develop for it, the pitiful amount of tablets that may benefit from it certainly is not worth it - most people I know who bought a Surface did so for its ability to run desktop software on it!

[zlutor]

@Tomi: how was dumb phones performing? How do you see dumb phones in general?

Can they be 'revived' by IoT?

E.g. imagine a device based on ex-Nokia S30 platform but no screen (most energy hungry component), no keyboard, pure connectivity and sensors. Worth Nokia build quality.

Connected to a solar panel out in the wild and it will serve you forever...

[Lullz]

If Microsoft goes Android I really wonder if that's going to work without Google Play. People who buy Android phones outside China quite often want to have access to Google Play. Selling phones without it has proven at lest tricky if not almost impossible if the manufacturer wants to sell in serious volumes. BB has failed on this and Amazon has not been doing that well on phones. It's the same problem MeeGo would have faced. Android compatibility without Google Play would have been an issue and would have probably damaged the sales.

Today people want more and more "clean" Android without any additional apps from the manufacturer. This leaves those without the access to Google Play into dark.

[chithanh]

I think we will see a few more quarters of Microsoft mobile PR spin, and the groundwork for that has been laid over the past year. Now that Windows Phone fans have been starved of high-end devices, they are going to buy the 950/950XL in droves. Which may not be enough to halt the unit sales decline, but it will bump the ASP by quite a bit.

About the mid-range and low-end markets, Microsoft seems for now content to use patent threats to "convince" smaller manufacturers into offering Windows Phones.

@Tester
> Really no surprise here

Maybe you were not surprised, but some of the other commenters on this blog certainly painted a more rosy picture of Windows Phone's future.

> I, for example, have never downloaded a single app from the store, all the stuff I was able to sample didn't convince me the slightest

Ever note how difficult Microsoft makes it to install Windows 8/10 without creating a Microsoft account? The option to skip Microsoft account creation is hidden in small print and confusing wording at the bottom. The expectation is here to get as many potential Windows Store users as possible, so that at least some will enter the barren wasteland that is the Windows Marketplace.

@zlutor
> How do you see dumb phones in general?
> Can they be 'revived' by IoT?

IoT is currently run by specialized embedded OS, but that is going to change. As soon as Linux becomes a viable option in small devices, people will stop caring about the others.
Intel is currently leading a push to get devices with 2 MB RAM to run a Linux kernel with half a TCP/IP stack and certain other corners cut.

[chithanh]

@Lullt
Who says that a Microsoft Android phone will come without access to the Google Play store? Note how Microsoft is behind the current Google antitrust investigations in the EU and other regions. This could be a means to pressure Google into relaxing access to the Play Store and decoupling Google Play Services from 3rd party apps.

And don't forget that Microsoft still has abilities to pressure phone vendors into preinstalling their apps. A Microsoft Marketplace for Android which is preinstalled everywhere could gain some traction, at least with a better chance than Amazon, Baidu or Yandex have on a global scale.

[Tester]

@chithanh:

"Maybe you were not surprised, but some of the other commenters on this blog certainly painted a more rosy picture of Windows Phone's future."

Yes, that were either delusional people or those who corporate are on a mission to push corporate America's interests. I really fail to see how anyone can extrapolate upcoming sucess from Microsoft's five-year-long failure to establish themselves in mobile. There's just no signs there, only smokes and mirrors to keep the investors calm. It's so plainly obvious what Nadella is planning here, but he's smartly wrapping it up so that the people that actually count (i.e. the shareholders) won't interfere with an agenda that on first glance may sound suicidal for someone who doesn't understand the basics.

"Ever note how difficult Microsoft makes it to install Windows 8/10 without creating a Microsoft account? The option to skip Microsoft account creation is hidden in small print and confusing wording at the bottom."

Yes, but if you install without an internet connection it'll conveniently fall back to an offline install, too.

"The expectation is here to get as many potential Windows Store users as possible, so that at least some will enter the barren wasteland that is the Windows Marketplace."

The main interest in a Microsoft account is not the Marketplace but to get them onto the cloud. Because - that's where Nadella sees the future. Thing is, I do have a Microsoft account, I still don't use their store because its contents are not worth wasting my time.

[Huber]

@chithanh: "Who says that a Microsoft Android phone will come without access to the Google Play store?"

What exactly do you envision under "a Microsoft Android phone"?

Is it a Microsoft-phone with a forked version of Android? Then it will be a niche OS like Firefox OS or Sailfish. I doubt MS would be stupid enough to try this. Note that this OS most likely wouldn't be used by OEMs anyways. It would just be further burning of money.

MS could release a "real" Android phone with full Google Play access, but why would they?

"This could be a means to pressure Google into relaxing access to the Play Store and decoupling Google Play Services from 3rd party apps."

I doubt Google could be forced to provide its Play Services for all platforms. Note that you would also have to force Apple to support it, if this move would be intended to make any sense at all.

As long as Google doesn't actively prevent App developers from releasing their software on other stores, I doubt that much will happen. Lots of Android Apps are e.g. already available via the Amazon Store, and AFAIK Google does nothing to prevent this.

My guess is that MS will rather try to put their services on Android and iOS, eg. Office with MS cloud-integration. Windows Phone/ Mobile will be left to die, there is no other chance anyways.

[Gonzo]

@Tomi,

Tomi as the war is fought with weapons and the camera and its specs/quality one that you truly appreciate, here is an interesting thing just for you.

and the winner of the best smartphone camera is......

Android Authority did a Blind Camera Shootout competition to find out how the new Sony Xperia Z5 camera performed against several phones ... I won't tell you who the winner is .... but do enjoy the comments .. quite funny ...

The good thing is that there is a clear winner ( like you say ... the war is over android won, well ...) and winner for best camera was voted in, so, no one here telling you this camera is better than this one because it has a lot more of this specs .. purely people's appreciation

http://www.androidauthority.com/blind-camera-shootout-winner-650299/

[abdul muis]

@Lullz

"Android compatibility without Google Play would have been an issue and would have probably damaged the sales. "

I think microsoft will FORK android, and provide BOTH google play store and x-box store.
There is NO reason to replace google play store with other store

@chithanh

"Who says that a Microsoft Android phone will come without access to the Google Play store? Note how Microsoft is behind the current Google antitrust investigations in the EU and other regions. This could be a means to pressure Google into relaxing access to the Play Store and decoupling Google Play Services from 3rd party apps."

The antitrust in EU because of Steven Elop complaining to EU legislator on behalf on (was) Nokia.
There's plenty of 3rd party android store from Samsung, SONY, etc that live happily with Google Play Store.

"And don't forget that Microsoft still has abilities to pressure phone vendors into preinstalling their apps. A Microsoft Marketplace for Android which is preinstalled everywhere could gain some traction, at least with a better chance than Amazon, Baidu or Yandex have on a global scale."

I don't think Microsoft will go pressuring other vendor. I think Microsoft will create an alternative store (let say X-BOX store) that can be download from microsoft web site (just like Amazon store), that have Direct-X library, so direct-X game such as on X-Box can be ported to android easily.

[chithanh]

@Winter
I don't say that they will or won't, just that they have several options here. And any claims that a potential Microsoft Android phone will ship without Play Store are premature, especially as Google may be forced to change their rules as a result of the antitrust investigations.
But even if they decide to ship without Play Store, their position is much better than Amazon, Baidu or Yandex.

@abdul muis
Microsoft already made Samsung preinstall Office Mobile. Certainly it is not far-fetched to assume that Microsoft will start to generously offer that manufacturers preinstall their app store in exchange for not being sued.

[abdul muis]

@Chithanh

"Microsoft already made Samsung preinstall Office Mobile. Certainly it is not far-fetched to assume that Microsoft will start to generously offer that manufacturers preinstall their app store in exchange for not being sued."

I know about this, but Microsoft & Google already sign an agreement... While I don't know the detail about the agreement, I believe Microsoft under nadella will doing less force, and be more nicer.

If Microsoft did make the X-Box store and port Direct-X to android, I don't think Microsoft need to force anyone.

[Lullz]

@abdul muis

"I think microsoft will FORK android, and provide BOTH google play store and x-box store."

Google has not allowed manufacturers to add Google Play on forked stores. There is no reason to believe this wouldn't be the case with Microsoft. Most likely Microsoft can't include Google Play if they for Android.

[abdul muis]

@Lullz

ZUK K1 ( https://www.youtube.com/watch?v=ym8ZozRTLRU ), using a FORKED android by CYANOGEN.
Have a Google Play Store!!!

[Huber]

@Abdul Muis: "ZUK K1 ( https://www.youtube.com/watch?v=ym8ZozRTLRU ), using a FORKED android by CYANOGEN"

Hehe, I think you are confusing things a little bit:

I have been using CM, PAC, Paranoid Android, pure AOSP etc. for years on various Android devices, and I always had the Google Services including Play Store installed.

This is because Google is actually _allowing_ this for people who mod their devices: You install your AOSP-based OS first, then the Google Apps.

But note that this is restricted to devices which were modded by a private person. Google simply does not care about regular users flashing the GApps manually.

But this does not mean you can do the same when selling such devices for a living, Google's lawyers would contact you pretty soon.

Also note that you don't get all features this way, e.g. Google Pay is not supported when flashing the GApps manually.

[abdul muis]

@Huber

XiaoMi, with their forked android, sold their device (international version) with Google Play Store installed
The ZUK K1 & also other phone powered by CyanogenMod, such as OnePlus One also sold with Google Play Store installed.

BTW, what is forked android??

1. If Microsoft use AOSP and didn't change a things, but change the Google Now to Cortana, just like what samsung did with S-Voice, and also same as what huawei did with their voice assistance.
2. If microsoft use their OWN launcher, just like samsung, sony, HTC, etc did.
3. If microsoft remove Chrome with Microsoft Edge
4. If microsoft remove Google drive, and put Micorosoft OneCloud
5. If microsoft remove Google Docs/Sheets/etc and put Microsoft office
6. If microsoft remove Hangout and put skype
7. If Microsoft STILL use Google Play Store but also put a high-end-gaming-store (X-box store), just like what Samsung did with Google-Play-Store + Samsung-Store, (and also same as sony did).

It would save more $$$ for microsoft than forking an android. and it still bringing revenue for them.

[Wayne Borean]

Tomi,

I'm working on an article about Microsoft. Do you have computer sales for the quarters since you did your last yearly sales numbers?

As to Lumia/Windows Phone, there are things going on at Microsoft. I don't have inside sources (and even if I did, I wouldn't get them in trouble by asking them for inside info), but I do know a fair bit about numbers. Those numbers will impact on Microsoft's decision making re the mobile division.

I personally think based on the numbers that Microsoft will shutter the division, and attempt to sell Office and other apps for IOS and Android. We'll see if I'm reading the numbers right,

[zlutor]

@chithanh: "As soon as Linux becomes a viable option in small devices, people will stop caring about the others. Intel is currently leading a push to get devices with 2 MB RAM to run a Linux kernel with half a TCP/IP stack and certain other corners cut."

Do we need Linux over there? Isn't it a little bit overkill? You also mention those devices run on 'specialized embedded OS' - and S30 is just like that thingy... :)

I guess good old Nokia devices run on far less powerful hw. And have all fine-tuned protocol-stacks we can imagine running for years without any major issues...

Not to mention how power effective those Intel devices will be - seeing how long it took to come up with something visible(?) in mobile space. And still lacks behind competition in many aspects...

I think IoT world will be about extreme efficiency and reliability (among other things). Those devices should operate for years without any major maintenance...

[Correctionsforyou]

“What the market doesn’t seem to understand is that vertically integrated Apple, in terms of the profits it generates and markets it addresses, is equivalent to the entire PC industry of the 1990s, including Microsoft, Sony, Toshiba, IBM’s PC division, Compaq, HP, and all the other PC makers. Adjusted for inflation, Microsoft’s year 2000 valuation alone would today be $850 billion, against Apple’s current $680 billion. How much higher when you add in all the PC makers from 2000?"

Apple is totally misunderstood.