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Print 7 comment(s) - last by Gungel.. on Dec 6 at 1:02 PM

Missing out on the world's biggest market is a blow to Microsoft

China recently surpassed the U.S. to become the world's biggest smartphone market.  The Chinese market is a bit like the U.S. market -- Google Inc.'s (GOOG) Android operating system is on top with a dominant 58 percent market share.  Some players are doing a better job in China than eleswhere -- Nokia Oyj. (HEL:NOK1V), for example, owns a 23 percent stake of the lucrative Chinese market despite floundering in the U.S.

Microsoft Corp. (MSFT) is an example of the opposite extreme.  Whatever small success it has seen in the U.S. smartphone market is nonexistent on the Chinese market, because Microsoft hasn't bothered to launch Windows Phones there.  

Originally Windows Phones were expected to launch in China sometime H2 2011.  But as the final month of 2011 slides by, Microsoft has officially punted that launch until 2012. The delay is a costly one for Microsoft, as it could have benefited from the open-minded Chinese consumers, many of whom are buying a smartphone for the first time.

Speculation is that Microsoft either was unsatisfied with its localization (e.g. character representation, local services, etc.) or that it was unable to iron out plans with its patners in the region.

Microsoft is reportedly in negotiations with China-based ZTE Corp. (SHE:000063), Huawei Telecommunications Comp., Ltd., and Lenovo Group, Ltd. (HKG:0992).  China's Lenovo group is the fastest growing PC maker in the world.

If there's one piece of good news, it's that Nokia's strong market share virtually guarantees Microsoft a decent piece of the pie when it enters the market in 2012 -- around the same time Nokia plans to advance plans to phase out Symbian and phase in Windows Phone 7 worldwide.

Windows Phone is faring only slightly better in the U.S. than in China in sales, given how low its U.S. sales are.  Microsoft has vowed to change this via better carrier incentives to sell Windows Phones, trying to match the tactics of Google and Apple, Inc. (AAPL) who typically give tidy commissions to sales people who sell customers on their top handsets.


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By the time they decide to get into the market....
By jnemesh on 12/5/11, Rating: 0
By Gungel on 12/5/2011 4:49:51 PM , Rating: 2
To the contrary, Nokia Lumina 800 is outselling all Android phones on Vodafone and KPN since its launch in November. And Orange reported similar sales success selling out in a lot of stores. O2 also said that its pre-orders for the Lumina are going extremely well, official launch date is this Friday the 9th.


By Gungel on 12/6/2011 1:02:11 PM , Rating: 2
And here is one more - the mobile Operator KPN just released the lasted sales numbers and the Lumina 800 is now there best selling phone even beating out the iPhone 4S.


Always Late
By Estienne Taylor on 12/5/2011 3:31:30 PM , Rating: 1
Windows Phone 8 Apollo is around the corner. Might as well skip Mango and go straight to Apollo when 2012 arrives.




RE: Always Late
By Gungel on 12/5/2011 3:47:29 PM , Rating: 2
At least 9 months before Apollo arrives. That's a long time for a mobile OS and plenty of time for a successful launch.


Licencing
By drycrust3 on 12/5/2011 7:04:44 PM , Rating: 2
quote:
Speculation is that Microsoft either was unsatisfied with its localization (e.g. character representation, local services, etc.) or that it was unable to iron out plans with its patners in the region.

My understanding is that normally Microsoft allows manufacturers' to only sell PCs and Laptops in a country with either Microsoft's own OS on it in the national languages of that country (e.g Windows 7 in Mandarin in China) or with no OS at all. You can't buy a laptop with a genuine pre-installed manufacturers' version of Windows 7 in English on it in China.
Since companies like Huawei and Lenovo already have Android tablets on the market, and presumably they are selling, then they will be reluctant to enter into an exclusive deal with Microsoft.




Piracy
By Church of Dirac on 12/6/2011 1:01:41 PM , Rating: 2
Maybe Microsoft actually wants to get paid for their software. I read one that something like 80% of the copies of Windows in China are pirated. I personally hate WGA, activation, and DRM but its not fair to Microsoft to have billions of dollars stolen by unethical people. Maybe Microsoft can include some software that locks the phone and encrypts the flash until a license is purchased. If people don't want to pay to play, they should use Linux on PCs and Android on phones. Open source could benefit from a half a billion new users in China. No one is forcing anyone to use Microsoft.




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