Despite everything, research firm remains optimistic about Windows Phone

You’ve got to hand it to tech research firm IDC — when it comes to forecasting the smartphone market, the company has been doggedly determined in its optimism about Microsoft’s Windows Phone software.

No matter how Windows Phone has done in the market, IDC has consistently predicted that better days are ahead. It’s also had to consistently revise its expectations in the face of the reality.

Tuesday provided yet another example, when the research firm issued its latest forecast of smartphone sales. The headline numbers in the report were about overall shipments — IDC expects the market to grow more slowly this year and the following four years than it previously predicted, thanks to weakening demand in China.

But the number that jumped out to me — because I’ve focused on it for a while now — was IDC’s forecast for Windows Phone. The tech firm is now predicting that Microsoft’s smartphone operating system will ship on 3.6 percent of the smartphones made in 2019.

That figure represents another concession to reality. As recently as May, the firm was predicting that Windows Phone devices would comprise 5.4 percent of the market four years from now. So, as it’s done repeatedly over the last five years, IDC was lowering its expectations for Windows Phone in the face of poor demand for the software.

Of course, that’s not the way IDC spun things. In its press release announcing the new forecast, the company stated that its “view that Microsoft/Windows Phone will remain a marginal challenger at best has not changed.”

Sure. But as recently as January of 2014, IDC was predicting that Windows Phone would account for more than 7 percent of the global smartphone market by 2018. So, the company’s view about just how “marginal” Windows Phone will be has actually changed quite a bit.

And this latest forecast reduction might be IDC’s most significant yet, because it finally brings Windows Phone’s predicted market share down to a level that at least somewhat corresponds with its current share of the market, which was about 2.5 percent in the first half of this year, according to IDC arch-rival Gartner. Given that IDC originally forecast — based on who knows what — that Windows Phone would go from 0 percent of the market in 2010 to more than 20 percent in 2015, 3.6 percent in 2019 from 2.5 percent today seems reasonable, at least at first glance.

But if you know anything about the smartphone market, even that reduced number seems wildly optimistic, because it implies that sales of Windows Phone devices will significantly outgrow the broader smartphone market in coming years. IDC forecasts that the software will steal share from Apple’s iOS over that time period. Yet there’s no sign at all that any significant segment of consumers is eager to have Windows Phone devices over iPhones.

Windows Phone’s poor performance in the market thus far is largely due to the fact that consumers and carriers on the whole have never shown much interest in the software and the few manufacturers that half-heartedly supported it mostly abandoned it when Microsoft bought Nokia’s phone division, which was the dominant maker of Windows Phone devices. Those trends have shown no signs of changing.

And, in fact, things have gotten worse for Windows Phone. Earlier this summer, Microsoft announced it was scaling its phone manufacturing operations and laying off thousands of its former Nokia workers. Although the company plans to continue making Windows Phone devices, it doesn’t plan to offer nearly the range or number that it had before. If even the maker of Windows Phone is pessimistic about the software, it’s hard to believe that other phone manufacturers will be more bullish on it or that they’ll make up for lost sales.

Still, you’ve got to give IDC credit for continuing this dance. It’s hard to remain optimistic when things keep turning out worse than you expected, even as you’ve lowered your expectations. Just don’t be surprised if the firm repeats itself again in a few months when it issues its next forecast.

Photo: Microsoft Lumia Lumia 540 Dual SIM (courtesy of Microsoft).

 

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  • Guest

    That’s why we look at units and not market share as the size of the market is unpredictable and appears to be declining. The Windows Phone shipments are very consistent unit wise and has been growing.

    • AMRooke

      Market share of WP in the US has been pretty stable for the past year or so, according to carrier subscriptions analyzed by comScore (http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-June-2015-US-Smartphone-Subscriber-Market-Share ), which has tracked WP at between 3.0%-3.6% of the US market (3.3% as of June 2015). This even more interesting as the market share of iOS actually dropped in the US for the 3 months following the release of the Apple 6/6+, when they were selling millions of units (apparently only to existing iPhone owners).

  • Jacob Stamm

    Market share predictions do not seem to taking into account Microsoft’s dedication to the entire Windows 10 platform, which, even in its infancy, is massively succeeding.

    I think 5% market share by the end of 2019 Q4, at least in the States, is perfectly reasonable, and possibly even conservative. I’ll add this article to the other ones I’ve bookmarked so that I can return in four years with a “told you so” comment. People who have some deep seeded grudge against Microsoft platforms succeeding need to expand their perspectives a bit.

  • JWilcox

    I’m still thinking Android has topped out, and may be in for a gypsy moth-like reckoning. Explosive over population, then massive collapse under it’s own weight.

  • cr_buck

    The numbers may be optimistic but your interpretation of Microsoft’s intentions are a bit skewed. Microsoft already stated that with Windows 10 mobile using the same core as Windows 10 there is no need for as many developers. Why have two sets of developers? Satya also said he was refining the focus of the smartphone offerings which many analysts complained they had too many models with slight variations. Even WP users have said they need just a few models across all carriers instead of exclusives. Finally, Satya also said he wants their partners to make more phones. In order to do that, Microsoft has to not overshadow them with hoards of devices but he also said they will make their own devices for at least two more years. He knows its an uphill battle but seems to want to give it a go using his own his own, more grounded, approach instead of Ballmers head in the clouds approach. If they can even gain some market share with slowing sales it would still be a success.

    • Guest

      You can load up Visual Studio and generate an app that runs on Windows, Phone, and Xbox in a matter of minutes. Then you can move it over into an iPhone and Android app with some conversion. It’s pretty slick. It’s a much more attractive environment than using different tools for each platform. Apple is especially annoying because they try to force you buy a Mac. We virtualize our development environments.

      • cr_buck

        I think it’s safe to assume you are developer. It’s nice to hear someone comment on the tools available having actually used them instead of what I have seen from other comments. On one forum a developer claims that he and none of his colleagues are interested in developing any Windows based apps regardless of how large the userbase is. Even with things like Islandwood he said it’s too much work and he is sticking with Android and iOS and no one using Windows wants to use an app regardless of what any stats told him. It almost seems that even with the management shift at Microsoft that there are some that just can’t let go.
        I used to love Google and after their policy changes over the past few years, I’m not so interested. I don’t hate them, just cooled off on interest. I think it’s funny how some people could say that with the last official numbers for Windows 10 installs at somewhere near 75 million that someone could say none of those will be using a device that couldn’t benefit from the new app model versus an old desktop x86 program. Particularly when Microsoft handles distribution, copyright protection, licensing, advertising, and billing.

  • Samuel

    Reading the below comments you can tell that only the absolute die-hard WP fans have stuck around and they seem to be deluding themselves by thinking that the Microsoft-made mobile platform has any kind of long-term future.

    • Guest

      Ad hominem = FAIL

  • cybersaurusrex

    IDC isn’t the only one in the industry that thought Windows Phone would perform better. The problem is that they underestimated Microsoft’s incompetence in branding, marketing, and distributing the OS.

    Maybe Windows 10 will turn things around… but, at this point, who would want to bet on it?

    • Guest

      What specifically do you think was incompetent?

    • cr_buck

      Microsoft may make some good products but solid marketing has always been their weak point. Even the latest comments about Windows Hello benefiting people in third world countries who find getting water and food far more important that forgetting their password on their nonexistent computer.

  • imaginarynumber

    why do you assume that MS are pessimistic about WP?
    they have committed to producing 2 sizes of phone in each of the price tiers.
    many of the lay offs are staff that were producing Asha and feature phones.
    as a WP owner, my only reason for not having upgraded over the last year is the absence of premium handsets, something that hopefully will change in October
    BTW here in the UK, WP has 10% market share, that said it is still a distant 3rd

    • AMRooke

      Likewise, the only thing keeping me (and many others) from upgrading our early adopter 920s and 1020s are that no flagship devices have been available for years. There is a pent-up demand for these.

  • Rob

    Who is this guy? I’d like to read his review of the Surface line up to see hid fail prediction on it.

 
 
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