Microsoft: A Nail In The Coffin For The Windows Phone

| About: Microsoft Corporation (MSFT)


Windows Phone has been losing ground in the USA, China, UK, and Germany.

It's not getting any closer to solve app disparity problem between the Windows ecosystem and iOS/Android.

The lack of apps turns away users, and the lack of users turns away developers. It's a vicious cycle, and it's only going to get worse.

It's clear that Microsoft has just lost in the smartphone wars.

I think it's time for Microsoft (NASDAQ:MSFT) to concede defeat in the smartphones war. As a latecomer to the game, it has got off to a bad start partnering up with Nokia (NYSE:NOK), pumping out subpar phones one after another on a weak ecosystem. Its failure to gain traction in its collaboration with Samsung and HTC provides further testimony to this truth. And recently, the numbers are out.

The Windows Phone is dead as a doornail.

Based on the latest statistics from Kantar Worldpanel, market share for Windows OS phones has seen declines in many key regions such as the U.S., China, UK, and Germany.

Market Share of Windows Phones, U.S.

February 14, 2014: 5.3%
March 14, 2014: 5.3%
April 14, 2014: 4.7%
May 14, 2014: 3.8%

Market Share of Windows Phones, China

February 14, 2014: 1%
March 14, 2014: 1%
April 14, 2014: 0.8%
May 14, 2014: 0.6%

Market Share of Windows Phones, Germany

February 14, 2014: 7.5%
March 14, 2014: 6.6%
April 14, 2014: 6.9%
May 14, 2014: 5.9%

Market Share of Windows Phones, UK

January 14, 2014: 11.3%
February 14, 2014: 10.1%
March 14, 2014: 9.1%
April 14, 2014: 9.5%
May 14, 2014: 9.1%

In the United States, market share for Windows phones has dropped almost 30% from 5.3% to 3.8% over the past four months. In China, it's even worse; market share has dropped 40% from 1% to 0.6%. In Germany and the UK, market share has dropped 20% from 7.5% to 5.9% and from 11.3% to 9.1%, respectively.

It's clear from these numbers that things are beginning to look pretty bleak for the Windows phone. So many years have passed, and now, Microsoft is still unable to deliver on its promise and break into the mass market.

With its abysmal number of users, Microsoft will continue to have a hard time persuading developers to create apps for its ecosystem. And without apps, consumers will not want to buy its devices. It's a vicious cycle, and it's only going worse.

To see how big the app disparity is currently, take a look at WPCentral's recent comparison of the Windows App Store with Apple's (NASDAQ:AAPL) App Store. The author has found that out of the top 25 apps from iOS, Microsoft has only 6 of them available in its app store.

6 out of 25.

Think for a moment.

That's a measly 24% of the total. It's beyond pathetic. So much for its promise of ending the app gap for Windows Phone before the end of 2014.

I know that Microsoft is still playing catch-up in the smartphone race, but the lack of apps seems to tell me that it's not moving at all. And it would take a giant leap of faith to convince me that things could turn around in the short future.

With a dwindling user base and a glaring shortage of apps, Microsoft should just cut its losses now with the Windows Phone to avoid sinking into an even deeper hole.

Disclosure: The author is long AAPL. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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