Preston Gralla

Dismal news for Microsoft's mobile efforts: Windows Phone and Windows 8 tablets sales are in the dumper

February 07, 2013 11:20 AM EST

Microsoft just got hit with a double-whammy: Reports show that Windows Phone market share is in the very low single digits in the U.S. and have declined since the release of Windows Phone 8, and Microsoft's tablet share is scraping the bottom. Will Microsoft eventually be forced to run up the white flag?

The latest figures about Windows Phone share from Comscore are grim. In the quarter ending in December 2012, Microsoft had a 2.9% market share of the smartphone market in the U.S., compared to 53.4% for Android, 36.3% for the iPhone, and 6.4% for Blackberry. More disturbing still is that Microsoft's market share declined from the quarter previous, when it had a 3.6% market share. That means that Microsoft's share of the smartphone market declinced since the release of Windows Phone 8.

The Seattle Times says that Kantar Worldpanel ComTech reports similar findings, giving Windows Phone a 2.7% market share of U.S. smartphone sales for the 12 weeks ending November 25. However, that firm shows Windows Phone market share increasing from a year previously, when it had 2.1%. Comscore says that Windows Phone market share was 4.7% the year previous.

Either way you look at it, though, that's bad news. After years of trying, Microsoft still can't get Windows Phone to gain any traction.

The news is just as bad for Windows RT, Windows, and Windows 8 tablets. A new Canalys report finds that "only 3% of pads shipped in Q4 2012 used a Microsoft operating system." The report says:

"The software giant's entry into the PC hardware market was something of a non-event. High pricing, poor channel strategy and a lack of clarity regarding its RT operating system led to shipments of just over 720,000 units."

Tim Coulling, Canalys Senior Analyst says that RT has so far failed, and may only succeed if Microsoft drastically drops the price of the RT-based Surface:

"The outlook for Windows RT appears bleak. Hardware OEMs are ignoring it due, in part, to a pricing strategy that does not align with the economics of the pad market. We expect Microsoft to rethink its pricing strategy for RT in the coming weeks. Dropping the price by 60% should get OEMs back onside."

Microsoft shouldn't expect the Windows 8-based Surface Pro to help with market share because the reviews of it have been scathing.

Where does all this leave Microsoft in mobile? At the moment, nowhere, with a miniscule market share for both smartphones and tablets. Microsoft has spend billions in research and development, marketing, and a big deal with Nokia, all to no avail. It makes one wonder whether Microsoft's mobile strategy will ever succeed. And that's a shame, because Windows Phone 8 is an excellent smartphone operating system, and Windows 8 for tablets is a winner as well.