Microsoft is investing millions of dollars in training “hundreds” of sales staff for phone companies worldwide to encourage them to sell devices running its Windows Phone operating system, as the company tries to catch up in the smartphone market.
The news came as Taiwan’s HTC unveiled two new smartphones on Thursday – called Titan and Radar – which are based on Mango, the next update to Windows Phone, and said that they will be available from October. They will almost certainly be the first using the Windows Phone 7.5 software to be available in Europe.
The Titan model will be priced somewhat above Apple‘s iPhone but carries a wider 4.7in display. The HTC Radar phone will be priced at similar levels to other smartphones.
Achim Berg, Microsoft’s head of Windows Phone marketing, told Bloomberg that forecasts by market analysts that the operating system will have a 20% share by 2015 are conservative – even though it is languishing with a 1.6% world market share in the second quarter of the year according to the analysts Gartner.
“This is a completely new platform, it takes time,” Berg told Bloomberg. “It took time with Android, it took time with Apple. We have to show that we’re very capable and that we have the fastest and easiest phone.” Part of that effort will involve tutoring shop staff selling the handsets in how to show off the phones to best effect.
Other analysts say that Windows Phone has a mountain to climb in order to reach the aim expressed by Stephen Elop, chief executive of Nokia – which will use Windows Phone in forthcoming smartphones – of becoming the “third ecosystem” in the field alongside Google’s Android and Apple’s iOS.
Horace Dediu, a former Nokia executive who now runs the independent consultancy Asymco, noted that in the US Android and iOS phones cumulatively outnumber Windows Phone devices – which there have a 4.5% share – by 12 to one: “To become the largest mobile platform in the US, as some analysts are predicting, Microsoft has a 12:1 disadvantage that looks to continue to grow. Those are some pretty tough odds.”
But Microsoft is undaunted. “I am confident on Q3. We see a strong Q4,” Florian Seiche, head of HTC’s business in Europe, Middle East and Africa, told Reuters at the IFA consumer electronics show in Berlin. He said good demand for its latest models was continuing, despite macroeconomic worries and longer replacement cycles in some countries.
On 29 July, HTC gave a better than expected forecast for the third quarter, estimating sales of all its phones – which includes both Android and Windows Phone smarpthones – would double from a year ago to 13.5m, while its gross margin would be around 28%, down from 29-30% in previous quarters.
HTC’s shares have fallen as much as 40% from their peak in April because of the slowing growth, courtroom fights with Apple over patents and stiff competition. Microsoft has also won a per-handset payment – believed to be around $5 (£3) – for each Android handset HTC ships after claiming that HTC’s Android phones infringe its patents.
Analysts say HTC needs new markets to sustain growth and will have to call again on the speed and innovation that turned the once obscure Taiwanese company into a global brand in five years and propelled its market value beyond that of Nokia this year.
“HTC will be hoping the heightened awareness of Windows Phone as a result of Nokia cosying up to Microsoft will help kick-start interest in these new phones after the dismal reception of Windows Phone this time last year,” said Ben Wood, head of research at CCS Insight.
Nokia, still the world’s largest cellphone vendor by volume, has decided to dump its own Symbian software in favour of Windows Phone. The first devices, running Mango, are expected later this autumn, but analysts think that it will not be before late spring next year that the Finnish company will have a range of handsets with which to target the market. Meanwhile, the company fell into loss in the last quarter, and that is not expected to improve this year.
Microsoft first announced Windows Phone in February 2010, ditching its longstanding Windows Mobile operating system in the face of competition from Apple’s iPhone and Google’s Android. Windows Phone was launched in October 2010, but the company has given few details about how many handset licences have been sold as market figures have suggested a slow start.