When Nokia (NOK 0.05%) announced its Lumia running Microsoft (MSFT +0.60%) Windows Phone on Nov. 28, 2011, no one really knew whether the phone would be a success or not. Now, slowly but surely, the phone is gaining meaningful market share in the fast-growing smartphone market. Two recent reports, in particular, uncover surprisingly bullish data for Nokia's Lumia.
An Apple and Google world
During the first 12 months of the phone's existence, Lumia sales were pretty insubstantial. This changed, however, when Nokia announced 4.4 million units sold in the fourth quarter. That figure was an increase of 51% from the prior quarter.
When we consider the sales volume of its competitors, however, these numbers seem less impressive. Apple (AAPL +2.65%), for instance, sold 47.8 million iPhones during the corresponding quarter. Samsung sold a whopping 63 million smartphones. Most of the latter devices, of course, use Google's (GOOG +1.71%) Android for their mobile OS. When it comes to monster sales, Apple and Samsung are on top.
Together, Google and Apple make up about 90% of top smartphone platforms in the U.S., according to a study published last week by comScore that measures installed user base of smartphone platforms. So far, the smartphone market is still an Apple and Google world. So Microsoft's place in the highly competitive market may seem small, but the company is vying for third place.
Two surprising reports
comScore revealed that Microsoft earned the No. 4 spot among smartphone operating systems in the U.S., with a 3.2% share in February compared to 3% in November. BlackBerry's (BBRY +3.62%) market share, on the other hand, fell substantially -- from 7.3% in November to 5.4% in February. The change in sales is likely even more drastic. As MacRumors notes, "comScore's data tracks installed user base rather than new handset sales, which means it is more reflective of real-world usage but slower to respond to shifting market trends than some other studies."
A report from Net Applications, published last Wednesday, revealed that mobile Internet traffic generated by Microsoft's Internet Explorer is already more than double the traffic from BlackBerry's browser. Microsoft claimed 1.99% market share while BlackBerry's share dipped to just 0.91%. Perhaps much of BlackBerry's installed base of smartphones is sitting around unused.
Microsoft should claim third place
Apple's iOS and Google's Android still dominate the smartphone market, but Microsoft is on pace to officially claim the third spot. Recent reports of Lumia success in China -- one of the world's fastest-growing smartphone markets -- indicate that Microsoft has an even better chance of attaining meaningful market share.
Is it time to bet big on Microsoft in the smartphone market? Probably not. But Microsoft is poised to potentially pull off a surprise. For now, investors should view Microsoft's small success in smartphones as a possible upside bonus, though its continued ascent far from certain, given Apple and Google's dominance.
