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Microsoft Corporation (MSFT) Windows Phones Get Crushed by China

Microsoft corporation (MSFT) Windows Phone

A report by Gartner showed that worldwide smartphone sales increased by nearly 4% during the first quarter of 2016, but the market share of Microsoft Corporation  Windows Phone dropped below 1%.

The research firm estimates that nearly 2.4 million Windows Phones were sold during January-March period, around 0.7% market share overall. This is a massive decrease from the 2.5% market share in the same period last year.

Microsoft corporation (MSFT) Windows Phone

The news comes after Microsoft last week announced that it is selling its entry-level feature phone assets to FIH Mobile and Finland-based HMD Global Oy for $350 million. As a result, Nokia will return to the mobile phone and tablet markets. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.

Looks Like Only Microsoft is Making Windows Phones

In April, Microsoft reported that it sold 2.3 million phones during the first quarter, versus Gartner’s estimate of 2.4 million Windows phones. This means that about 96% of Windows device sales came from Microsoft, PC World reported.

The main problem that many people are pointing out is lack of new Lumia devices. The company recently hinted that it will not build any more Lumia phone. In its third-quarter fiscal 2016 earnings report, Microsoft reported that it sold 2.3 million Lumia devices in the quarter, a massive 73% decline from the 8.6 million it sold in the same period last year. According to rumors, Microsoft may launch a Surface-branded phone in 2017.

How can Microsoft Corporation  draw developers to Universal Windows Platform (UWP)? The company has only one strategic goal for application developers – to convince them that using UWP is a great idea. A keen analysis of videos showing what transpired during the company’s Build 2016 conference shows that UWP dominated pretty much the entire presentation the company had prepared for the attendees. The company wants to more app developers to use UWP. This will result in more apps, thus boosting the company’s Windows 10 devices sales. It also means more users will be included into the company’s ecosystem, leading to demand for its cloud services. This eventually translates to more profits earned.

Chinese Brands Emerging As New Top Global Brands

Global sales of smartphones totaled 349 million units in the first quarter of 2016, a 3.9% year-over-year increase, according to Gartner. Smartphone sales represented 78% of total mobile phone sales in the latest quarter.

“In a slowing smartphone market where large vendors are experiencing growth saturation, emerging brands are disrupting existing brands’ long-standing business models to increase their share,” stated Anshul Gupta, research director at Gartner. “With such changing smartphone market dynamics, Chinese brands are emerging as the new top global brands. Two Chinese brands ranked within the top five worldwide smartphone vendors in the first quarter of 2015, and represented 11 percent of the market. In the first quarter of 2016, there were three Chinese brands – Huawei, Oppo and Xiaomi – and they achieved 17 percent of the market.”

Chines mobile maker Oppo has been performing, moving into the No. 4 position with unit sales growth of 145% during the first quarter. The company saw a strong growth in China. Huawei saw strong smartphone demand in Europe, the Americas and Africa. Xiaomi and Oppo saw their smartphone sales in emerging Asia/Pacific rise by 20% and 199%, respectively.

Shares of Microsoft Corporation  were trading 1.17% down in after-market hours.

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