Microsoft Shipped 2 Million Windows Phone 7 Units

Microsoft Corp. said it shipped more than 2 million copies of the Windows Phone 7 operating system last quarter, as the company tried to reverse sliding smartphone market share.

Customer satisfaction for the product is at 93 percent and brand awareness has jumped 22 points to 66 percent since it was released, Greg Sullivan, a senior product manager at Microsoft, said in an interview, citing internal measures.

Microsoft, the world’s largest software maker, aims to stem market-share declines to Apple Inc.’s iPhone and handsets based on Google Inc.’s Android operating system. Apple sold 16.2 million iPhones in its most recent quarter, which ended Dec. 25. For now, Microsoft is measuring success more in terms of customer feedback than raw sales figures, said Sullivan, who predicted sales will accelerate. He declined to give a forecast.

“Sales are an important measure, but for a new platform we think customer satisfaction and active developer support are more important indicators of how sales will be over the long term,” he said.

There are now 6,500 applications for Windows Phone and 24,000 developers have signed up to build them, Sullivan said.

The shipment figure isn’t all that rosy, said Kevin Burden, an analyst at ABI Research.

“The number shows there’s a lot of competition in this space and Windows Phone 7 is having a hard time being heard over the crowd,” said Burden, who is based in Hopkinton, Massachusetts.

Market Share

Microsoft’s share of the smartphone operating-system market declined to 2.8 percent in the third quarter, from 7.9 percent a year earlier, according to Gartner Inc. Android’s share increased to 25.5 percent from 3.5 percent, while Apple’s iOS share declined to 16.7 percent from 17.1 percent.

Phones with the new Microsoft software went on sale Oct. 21 in Europe and Nov. 8 in the U.S.

The company plans to ship an update to the software in the next few months that adds features such as cut and paste and the ability to work with the CDMA technology used by Verizon Wireless and Sprint Nextel Corp., Sullivan said.

Microsoft rose 44 cents to $28.89 as of 2:26 p.m. New York time in Nasdaq Stock Market trading. The shares fell 8.4 percent last year.

The company will throw a lot more resources at its mobile efforts and can leverage exclusive features like connectivity to its Xbox online gaming service, Burden said. Still, Microsoft needs to show steady progress soon.

“Can they build on this number? Yeah,” Burden said. “But they need to show an uptick in the first quarter and an uptick on top of that in the second quarter. They have the ability to do some smart things with Windows Phone 7, but as always it comes down to execution.”

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.