Windows Phone 7 launch, dwarfed by Android and iPhone, looks to be a dud

Microsoft is said to be spending $100 million on the Windows Phone 7 ad campaign, and pulled out all the stops for a glitzy product launch yesterday. But a market research source says that only 40,000 phones were sold the first day, dwarfed by the 200,000 Android devices Google activates each day, and by the 600,000 first-day pre-ordres of the iPhone 4. At this rate, Microsoft will never catch up.

TheStreet.com reports that:

Microsoft, which spent a reported $100 million on the phone's advertising campaign, sold a mere 40,000 Windows 7 phones Monday, according to a market research source who tracks phone sales. The anemic sales number does not include the 89,000 Microsoft employees that will be given free Windows 7 phones.

Contrast that with the iPhone 4, which had 600,000 pre-orders, and with Android phones, which Google says are activated at a clip of 200,000 per day.

One report said that the HTC HD7 Windows Phone 7 sold out after one day. So how can the platform be a dud the first day, but also have a phone sell out on the first day? Because of component shortages such as those used in touch screens, there is expected to be a shortage of Windows Phone 7s. Before the launch in the U.S. there were shortages in Europe.

So Microsoft faces the worst of possible worlds right now --- slack demand, and potential shortages for any models, like the high-end 4.3-inch screen HTC HD7, that become popular.

One day doesn't make or break a product, and how sales go this holiday season will tell a lot about whether Windows Phone 7 can compete against Android and iPhone. But you only get one chance at a big-splash product launch, and in this case, it apparently didn't go well for Microsoft.