Microsoft (NASDAQ:MSFT) launched its Windows Phone smartphone platform more than a year ago. It competes primarily with Google‘s (NASDAQ:GOOG) Android, Apple‘s (NASDAQ:AAPL) iOS, Research in Motion‘s (NASDAQ:RIMM) Blackberry OS and Nokia‘s (NYSE:NOK) Symbian. Despite Microsoft’s best efforts, it Windows Phone has been unable to gain any significant market share yet. However, Microsoft is trying hard to make Windows Phone one of the top smartphone platforms in the next couple of years. Yesterday, it announced that it would be offering a $25 prepaid app card to new Windows Phone customers in the U.S., which would let them purchase $25 worth of apps for free. [1]
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Microsoft Desperate to Gain Smartphone Market Share
This is yet another move by Microsoft to gain market share in the highly competitive smartphone market which is currently dominated by Android and iOS.
We expect Windows Phone to enter the top ranks in the next couple of years, backed by Nokia, Samsung, HTC and all other major smartphone manufacturers. It has been pushing its hardware partners to increase their advertising spend and is also working with component manufacturers to bring down the prices of Windows Phone devices.
However, we don’t expect Windows Phone sales to impact Microsoft’s overall revenue in any meaningful way. It generates only a fraction of the total revenue from the Entertainment and Devices division comprised of the Xbox, Zune and Windows Phone, which itself accounts for only about 8% of Microsoft’s total Trefis price estimate.
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Notes:- Buy a new Windows Phone, get $25 worth of apps, Windows Phone Team Blog [↩]
