Is Windows Phone finally turning the corner?

Windows Phone has been woefully slow to catch on, and critics have recently derided the 18-month-old mobile operating system as a failure and a flop. But Microsoft finally ended its long skid in the U.S. mobile race, according to data released this week by comScore, growing its share of the smartphone market from 3.9 percent in February and March to 4 percent in April. That increase is a tiny one, to be sure, but it’s a ray of hope that ends a steady decline of more than a year. And I think Microsoft is very likely to build on that momentum in a big way in the coming months.
It was expected that Microsoft would stop the bleeding in the second quarter, of course, given the marketing effort behind the launch of the flagship Nokia Lumia 900 in early April and the release of Windows Phone 7.5, dubbed Mango. And Microsoft’s share of the U.S. smartphone market is still an afterthought compared to Google (50.8 percent), Apple (31.4 percent) and even the flailing Research In Motion (11.6 percent).
But Microsoft has built a thriving app ecosystem for Windows Phone, as evidenced by this week’s news that its Marketplace now offers more than 100,000 titles from nearly 24,000 publishers, and is adding more than 300 per day. Apple’s App Store and Google Play are far larger, of course, but Microsoft’s library is now big enough to appeal to mainstream consumers. Meanwhile, Microsoft has overtaken Apple in China – the world’s biggest mobile market, as you’ve surely heard before – with a 7 percent share of the smartphone market.
And while the release of the Lumia 900 received a lot of hype, it was only one part of a much bigger mobile push from Microsoft. This week the company introduced SmartGlass, an app that links its popular Xbox console to mobile gadgets running Windows Mobile, Android or iOS. The platform, which was unveiled at E3 in Los Angeles and will launch this fall, will serve as a kind of extension of the console – enabling some on-the-go gaming activity – as well as a system for delivering video and other media to smartphones and tablets.
Microsoft’s mobile prospects hinge on Windows 8, however. As Michael Mace wrote last week, the software giant is giving its ubiquitous operating system a major overhaul in an effort to create a more mobile-friendly user experience. The remade OS will serve as a unifying platform for Microsoft, enabling tight integration between smartphones, tablets and PCs.
That’s important because Microsoft’s PC audience is still massive. The company plans to sell 350 million Windows 7 PCs this year even as Windows 8 comes to market sometime in the fourth quarter. Many of those purchases are made by mainstream consumers who depend on Microsoft Office for familiar tasks like creating documents in Word or spreadsheets in Excel. But bridging the gap between those desktop functions and mobile phones is still a headache – which is why Google this week announced the acquisition of Quickoffice, the developer of the popular smartphone and tablet app that enables users to work with Microsoft’s software. Windows 8 will give Microsoft’s mobile business a big boost if makes it easy and affordable for users to perform those functions on their phones.
Microsoft still has an enormous amount of work to do to regain its lost relevance in mobile. Its brand is dusty, its handset lineup remains thin and it desperately needs more support from more carriers. And it still needs to figure out how to market Windows Mobile effectively. But Windows Phone is finally showing some signs of life, and Windows 8 will come to market in just a few months. So it’s far too early to write off Redmond in the battle of mobile operating systems.

Question of the week

How much market share will Windows Phone claim by the end of 2012?