Last week Gartner issued a report which awarded Windows Phone with 2.5 % of marketshare worldwide. This is a brutal- but not wholly unexpected piece of news that highlights Microsoft’s struggle with growing market share and maintaining interest in its phones worldwide. However, it is not as clearcut as it appears to be on first glance. The world is a big place, and not all markets are sized equally.

Before I explain, I’ll make an analogy that I think can get to the core fairly quickly. Let’s say there were three large communities, and they each ate apples, oranges and strawberries. In community A, 10% of the users chose to eat strawberries, with as many as 14.2% in one region. In community B only 3% chose strawberries. The others opted for Apples and Oranges. In Community C, the majority chose apples and Oranges and only 0.5% of the members of that community chose strawberries. Now, community C is four times as large as community’s A and B, so if we were to control for size, we find that a negligible amount of the community eats strawberries.

Windows Phone’s low global market share is not reflected in its market share in the West.

If you’ve been following Windows Phone market shares news, you should know where this is going. Community A is Europe (EU5), community B is the USA and Community C is China. Windows Phone has a market share of 10%, 3% and 0.5% in these communities respectively.

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I’m singling out these markets for a good reason, these are the three largest markets for smartphones at this point, they are the markets predominantly studied by analysts and as such used to make predictions and proclamations. When looking at global market share figures for instance, Windows Phone often bottoms out at 3%, a disastrously low rating. However, when we contextualise such data with facts about the respective populations, it makes a bit of sense why Windows Phone’s low market share is not reflected in its market share in western states.

Any player who doesn’t make it in China is basically dead because of the sheer number of users available 

The reason is…China. China has a population of more than 1 billion people and a smartphone user base of about 700 million, that is more than the  entire population of the EU5 and the US combined! When you look at it from that angle, China dominates the smartphone market, for all intents and purposes, any player who doesn’t make it in China is basically dead because of the sheer number of users. And that is what is happening to Windows Phone here, with a market share in China that is lower than its market share in western nations, its entire worldwide market share drops as a consequence.

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To illustrate this, I’m going to switch statistics from user base to installed base now. The US has an install base of 3% according to comScore, accounting for 6 million users. Let’s say Microsoft had the same install base in China…that would be 21 million users, a whole 3.5 times larger, and when we’re talking in the millions, that’s not a number to be scoffed at.

If Microsoft simply cannot grab any sizeable percentage of Chinese market share while increasing their overall market share, then their worldwide market share will continue to stagnate or grow at a tepid place. Microsoft knows this, hence why their Chinese version of Cortana is insanely customizable and why they have Chinese specific apps and features – to grab appeal and gain overall market share.

What does this mean for predominantly western users(and Journalists/Bloggers)? Well, once you take China out of the equation and count only the EU5, the US and Australia, Windows Phone gets a much more favourable share of the market. The mean market share of those countries is approximately 8 % (Kantar numbers), not as good as 10% would be, but a far cry from 2.5%. Interestingly, this plays against the narrative that Windows Phone only does well(again, relatively) in 3rd world countries.  When looked at objectively, the US is really the outlier in terms of marketshare as opposed to the trend.

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This means, that for Microsoft to grow its Windows Phone market share, it must simultaneously conquer both the US and China. Specific to China, I can see several issues that may have prevented Windows from progressing. One of them is the UI/UX. Windows Phone’s heavily textual UI may look great in latin characters but just looks crowded and messy in Chinese/Japanese characters (Kanji, Hiragana, Furigana not sure which is used). Microsoft’s switch to an icon-heavy user interface may have been based on feedback from China as well.

The second is the app gap. If Microsoft’s Windows Phone can have an app gap in the west with an average of 8%, then imagine what the Chinese app store must look like. Microsoft is trying to fix this by inking deals with specific ISVs – WeChat and Line for one – to create goodwill and lower the barrier to adoption. This hasn’t worked as well as it should have.

Microsoft’s Lumia 930 may have the flashy pricing, but it doesn’t quite command the brand cachet of a Lumia 1020 or a Surface pro 3.

The final reason is due to handset availability and Chinese tastes. People in China favour big screens on a budget or premium flashy devices they can use to show off. Microsoft’s Lumia 930 may have the flashy pricing, but it doesn’t quite command the brand cachet of a Lumia 1020 or a Surface pro 3. It is just not “wow” enough. The Lumia 640 XL is a big screen on a budget, but its specs do not

The same would apply in the US as well, with the exception of there being crucial apps like Snapchat and some banking apps being missing. The name *Windows Phone* is still a liability for consumers at the moment. Powerful enough hardware and a compelling enough story can overcome an app gap if implemented well enough so, while it is wise to stay neutral as to whether Microsoft’s new flagships will change anything, it would be unwise to lean one way or another right now.


Do you have any more interesting data or thoughts on this issue? Feel free to discuss in the comments section as always.

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