Microsoft finally completed its purchase of Nokia’s mobile phone business for 5.44bn euros ($7.5bn; £4.5bn) last Friday, a deal that should have been completed earlier this year but was delayed by a hold up in regulatory approvals.
According to the latest 12-week figures from Kantar Worldpanel ComTech, a market research division of WPP, Windows Phone accounted for 8.1% of smartphone sales in the 12 weeks to the end of March across the top five markets in Europe (the UK, France, Spain, Italy and Germany), with Android taking 70.7% of sales and iOS 19.2%.
And Europe seems to be Windows Phone’s best market at the moment. In the U.S. Windows Phone took 5.3% of sales, while in Australia it took just under 6%; in China it was 1%; and in Japan, just under 1%.
This is something that Microsoft will find very challenging in terms of economies of scale and then mindshare among consumers and developers.
Dominic Sunnebo, a director at Kantar, writes that the main challenge for Windows is that Nokia, very much the main and dominant Windows Phone OEM, has based a lot of its fightback strategy on wooing new smartphone users with entry-level phones. The problem is that these devices have not managed to compete well enough with the Android camp.
“Windows had a tough start to the year as a result of its entry-level Nokia models facing fierce competition from low-end Motorola, LG and Samsung Android smartphones.”- Sunnebo
Although Nokia was starting to make some real headway with its entry level Lumia 520, particularly in capturing first time Smartphone buyers, now there’s some really compelling competition at this end of the market from the likes of Motorola (with Moto G) and Samsung (heavily discounted S3 & mini models) eating into prime Nokia territory.
Moves from up-and-coming Chinese brands (Xiaomi, Oppo, OnePlus) to expand outside of their home market are now going to make the breakthrough challenge even harder.
Former Nokia chief executive Stephen Elop has become executive vice president of the Microsoft devices group, in charge of Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Microsoft Surface, and Perceptive Pixel (PPI) products.
The Finnish company will now focus on networks, mapping services and technology development and licences.
Two Nokia plants will remain outside the deal – a manufacturing unit in Chennai, India, subject to an asset freeze by Indian tax authorities, and the Masan plant in South Korea, which it plans to shut down.