Ina Fried

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NPD: Windows Phone 7 Off to a Slow Start, While Android Continues to Gain

Microsoft’s new Windows Phone 7 operating system got “off to a slow start,” according to market researcher NPD, with phones based on the software accounting for just two percent of U.S. consumer smartphone sales in the fourth quarter.

That is a slower start than either Android or Palm’s webOS had in their debut, NPD said. Windows Phone 7′s sales put it not only behind Android, Apple and RIM, but also behind its own, older Windows Mobile operating system. Windows Phone 7′s two percent share was roughly equal to what HP’s Palm share was for the fourth quarter.

“With its mid-quarter launch, Windows Phone 7 entered the epicenter of competition between iOS and Android at AT&T,” NPD analyst Ross Rubin said in a statement. “Both competitors offer mature feature sets and large app libraries. Microsoft has made the case for Windows Phone 7′s differentiation and improved integration. Now, the company must close the feature gap, offer more exclusive capabilities, work with partners to deliver hardware with better differentiation, and leverage its extensive experience in driving developer communities to increase its app offerings.”

Microsoft has said some two million phones running Windows Phone 7 were sold to carriers worldwide, but has offered no data on the rate at which the devices were actually leaving store shelves.

AT&T, which sells the broadest array of Windows Phone 7 models, also hasn’t given specific sales figures but said that the numbers have been growing steadily since launch. LG, one of the phone makers that built Windows 7 models, indicated its sales were less than it had hoped.

Microsoft downplayed the meaningfulness of early sales figures.

“Sales are an important measure of success, but for a new platform customer satisfaction and active developer investment can be even more important leading indicators of long-term success,” a representative said in a statement, reiterating comments that the company made last week noting high customer satisfaction numbers and a growing base of applications. “These early signs of satisfaction from customers and developers are reason to be bullish about the foundation for long-term success for Windows Phone 7.”

Overall, NPD said that Android grew its share nine points during the quarter, grabbing 53 percent of the consumer market, while Apple iPhones accounted for 19 percent of the market, down four percentage points. RIM also had a 19 percent share, a drop of two percentage points.

The five top-selling handsets included three Android models and two versions of the iPhone–the iPhone 4 and iPhone 3GS. The iPhone 4 was the top-selling device, followed by the Motorola Droid X and HTC Evo 4G. The iPhone 3GS was the fourth-best-selling model, followed by the Motorola Droid 2. Motorola has already said it expects to take a hit this quarter, as its top-selling devices are on Verizon, which is now getting an iPhone of its own.


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