Preston Gralla

More bad news for Windows Phone 7 -- report says consumer interest is waning

April 26, 2011 9:13 AM EDT
By  Preston Gralla

Microsoft's big launch of Windows Phone 7 in November was supposed to rekindle demand for the company's lagging smartphone lineup, but a recent survey by Nielsen shows it failed. Fewer people are now interested in buying a smartphone with a Microsoft operating system than before launch, the survey claims.

The Nielsen figures come from an analysis of the company's monthly surveys taken between July, 2010, and March, 2011 in the United States. For the July to September 2010 time period, of consumers who planned on getting a smartphone in the next year, 7% said they planned on buying a Windows Mobile device, or an upcoming Windows Phone 7 device. For January through March 2011, that figure had dipped to 6%.

That's particularly bad news for Microsoft. The company's massive Windows Phone 7 launch and marketing blitz was supposed to finally catapult it into the smartphone race. Clearly, that hasn't happened. Consumers now want a smartphone with a Microsoft operating system less than they did before the blitz.

The Nielsen report had other interesting news --- notably that for the first time, more consumers say they plan on buying an Android device than an iPhone, by a bare 31% to 30%.

As for installed base, the news is also bad for Windows Phone 7 --- Nielsen says Microsoft operating systems have a 10% installed base, versus 37% for Android, 27% for iOS, and 22% for Blackberry. If the Nielsen survey of planned purchases holds true, the Microsoft number will shrink.

This doesn't mean that all is lost for Windows Phone 7. The deal with Nokia may well save the struggling smartphone platform. But it's clear that without that deal, Windows Phone 7 had virtually no chance of success. If after spending countless millions of dollars on development, marketing, and publicity, people want your phones even less than before, you know you've got big trouble.

The Nokia deal won't start to show any payoffs for at least two years. Until then, expect Windows Phone 7 to stay in the doldrums. What happens after then is anyone's guess.