Please ensure Javascript is enabled for purposes of website accessibility

Microsoft's Gaining Smartphone Market Share

By Daniel Sparks - Apr 8, 2013 at 7:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Apple and Google still own the smartphone market, but the fight for third place rages on.

When Nokia (NOK 2.07%) announced its Lumia running Microsoft (MSFT 3.20%) 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 4.01%), 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 (GOOGL 2.37%) 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 (BB 1.02%) 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
$260.65 (3.20%) $8.09
Apple Inc. Stock Quote
Apple Inc.
$143.11 (4.01%) $5.52
Nokia Corporation Stock Quote
Nokia Corporation
$4.93 (2.07%) $0.10
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,229.76 (2.37%) $51.60
BlackBerry Stock Quote
$5.95 (1.02%) $0.06
comScore, Inc. Stock Quote
comScore, Inc.
$1.76 (4.14%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.