Microsoft Plans More Advertising for Windows Phone to ‘Smoke’ Competitors

Microsoft Corp. (MSFT), the world’s largest software maker, said it will increase advertising spending to build market share for Windows Phone as it drives into new regions.

“The next year to 18 months is really about seeing a significant uptake in market share,” Aaron Woodman, the director of Windows Phone, said in an interview at the Mobile World Congress in Barcelona. Microsoft previously focused on getting publicity and good reviews for the system, he said.

Microsoft handset partners led by Nokia Oyj (NOK1V) sold about 2.8 million Windows Phones in the fourth quarter for a 1.9 percent market share in smartphones, according to Gartner Inc. The software maker needs to peddle tens of millions of units a quarter to make its mobile software a durable contender alongside Apple Inc. (AAPL)’s iPhone and Google Inc. (GOOG)’s Android.

“It doesn’t feel like we’re really pushing apart from the competition,” Woodman said. “We need to go pick a fight.”

Microsoft’s rallying cry will be that Windows Phone helps users do what they want to do faster than handsets with other operating systems, he said. Over the next six months, the Redmond, Washington-based company will expand its “Smoked by Windows Phone” campaign, in which users race handsets to accomplish tasks through various digital and video media.

“We’ll do TV spots, the question is where,” Woodman said. “Microsoft is patient and willing to use deep pockets, but we’re also respectful of shareholder value so we want to pick appropriate countries and spend levels.” He declined to specify an advertising budget.

China Entry

Entering markets with lower smartphone penetration, such as China, could help Microsoft build volume. That requires cheaper handsets that are starting to come to market. Nokia broke the 200-euro mark with the 189-euro ($254) Lumia 610 this week. ZTE Corp. (000063) also introduced a cheaper Windows Phone, the ZTE Orbit.

“We’re getting demand from handset makers and operators to expand geographically more quickly than we originally thought,” Woodman said. “In China, people are now able to afford data cost, they’re pretty comfortable with that price point of the Lumia 610, so there’s still significant volume.”

Microsoft is opening mobile applications stores in China, Thailand, Venezuela and 20 other nations by the end of the month, with phones arriving around the same time, Terry Myerson, who oversees the Windows Phone business, said this week. That will bring the total number of markets Microsoft serves to 63, letting it target 60 percent more buyers, he said.

To contact the reporters on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net; Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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