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Microsoft's Lumia Windows Phones likely accounted for around 3 percent of global smartphone sales

Microsoft Corp. (MSFT) announced its earnings yesterday after hours for its Q2FY2015, which ended Dec. 31, 2014.  Hidden in that earnings report were some barometers of the health of its Windows operating system in the smartphone space.

While Microsoft has a growing contingent of up-and-coming smartphone makers embracing Windows as a smartphone OS option, the majority of its sales are still driven by its in-house unit, which it purchased from Nokia Oyj. (HEL:NOK1V) in a deal completed in April 2014.

In the fourth calendar quarter of last year, Microsoft's Devices unit moved 10.5 million Lumia smartphones are earned $2.3B USD -- roughly $220 USD per device.  On a quarter-to-quarter basis revenue is down $0.3B USD, but sales are up 1.2 million units from Q1FY2014 (calendar Q3) which saw Microsoft selling 9.3 million smartphones and earning roughly $280 USD per device.

Lumia logo

On a year to year basis sales are up 28 percent from the 8.2 million units the unit [source; PDF] -- then under the ownership of Nokia -- moved in calendar Q4 2013.  Nokia earned EUR€2.633B ($2.972B USD), but that number is slightly deceptive as it contains sales of Nokia's feature phones as well, which Microsoft has wound down volume-wise.

Over the holiday season Microsoft's smartphones -- which currently run Windows Phone 8.1 -- saw strong sales in low-end models including the Lumia 520/530 and Lumia 630/635.  The Lumia 635 LTE -- which launched at a price of $189 USD in April 2014 -- sold for as little as $40 USD in holiday promotions.

Lumia 630
The Lumia 630 and 635 LTE were top sellers this holiday season, thanks to heavy discounts.

How's that stack up to the competition?  Well in Apple, Inc.'s (AAPL) Q1FY2014, it sold 51 million iPhones.  This year in the soon-to-be-reported Q1FY2015 it's expected to announce between 65 and 75 million iPhones sold.  Samsung Electronics Comp., Ltd. (KRX:005930) (KRX:005935) -- the world's top smartphone manufacturer -- sold 91 million smartphones in calendar Q4 2013 (with 9 million being its flagship Galaxy S4 model).

Globally smartphone sales are expected to be around 350M units for Q4 2014, having topped 280M units last year.  So 10.5M units is only around 3 percent of total global sales.  Still that's a substantial stake and enough to debunk Microsoft's sternest critics who claim that the company is no longer a factor in the global smartphone race.  Microsoft isn't the biggest smartphone vendor out there by volume, but its sales are growing and on pace to potentially top 50 million units this year.

Windows 10 for smartphones
Windows 10 will boost Microsoft's smartphone pitch later this year. [Image Source: Neowin]

Microsoft's smartphone effort will get a boost when it brings Windows 10 to the smartphone space later this year.  It will preview the upcoming OS in Feb. 2015 for public testers.

Source: Microsoft [press release]





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