In many cases, Windows Phone is gaining a share from Android and in some countries, from iPhone; but, where it does the best is the countries where BlackBerry used to have strong market share.
In many ways, this is a return to the original promise of Windows Phone, when Microsoft modestly said it would appeal to people who hadn't yet bought their first smartphone and were looking for a less confusing way to switch from feature phones.
That applies more to developing countries than to the US and UK markets. Appealing to first time smartphone buyers means a clean, clear interface — and cheap phones. Thanks to hardware acceleration, Windows Phone gets more out of older, slower, cheaper ARM CPUs. That's good for the cost conscious mainstream, and in a high end phone it means you can spend more of the cost of the phone on things like the camera.
It seems likely that it was Nokia that pushed Windows Phone to the high end, in an attempt to make an impact with showcase features like the excellent low-light photography in the Lumia 920 and 925 and the 41-megapixel superzoom of the 1020. But it's the budget Lumias like the 520 that are driving mainstream sales in most markets: 43 percent of Windows Phones are 512MB models rather than 1GB, according to figures from the adDuplex network figures.
HTC and Samsung and Huawei have budget Windows Phone handsets as well; often they're retreads of existing Android phones, so it's understandable they don't generate a great deal of excitement.
Nokia is the company pushing the boat out with innovative high end phones that establish the brand name and this will have a halo effect when people come to buy; it seems to be why Windows Phone sales are nearly all Nokia sales (81.6 percent in Q2).
Back in 2011, IDC forecast that by 2015 Windows Phone would take the number two slot from iPhone worldwide; by 2012 it had postponed that to 2016 with a 19 percent share that would just scrape past iOS (thanks to sales in developing countries). Neither prediction seems likely to apply in the US but it's looking a little more plausible elsewhere.
The thing to remember when you look at iPhone sales is that they're very cyclical; Apple will sell far fewer of its current phones in spring and summer as people wait for what it's expected to launch in September.
But worldwide in Q2, IDC says Windows Phone share has grown from 3.1 percent to 3.7 percent while Apple has fallen from 16.6 percent to 13.2 percent. Gartner says Windows Phone has gone from 2.6 percent to 3.3 percent and iOS from 18.8 percent to 14.2 percent, Strategy Analytics puts iOS at 14 percent and Windows Phone at 4 percent. Either way, at the same point in the cycle, iOS isn't doing as well as it was. Of course, now that Apple is talking about cheaper handsets for emerging markets the predictions may have to change again.
Last year, in Q4, Windows Phone was only outselling iOS in seven markets — Argentina, India, Poland, Russia, South Africa, and Ukraine — plus a group of smaller countries, including Croatia, that got bundled together by IDC. The smaller markets had Windows Phone outselling iOS with just 100,000 sales per country and as low as 32,000 handsets in Argentina — a good reminder that iOS has more mind share than market share in many places.
In Q2, the same thing is happening in some much larger markets, and it's possible to see Windows Phone starting to give iOS a run for its money here (if not otherwise noted, the figures are from IDC).
Finland: You'd expect Nokia to do well in its native Finland, but it had slipped behind Samsung. In Q2, Nokia returned to the number one position with 36 percent market share. Samsung was second with 34 percent and Apple fell from to 14 percent in Q1 just to just seven percent.
Latin America: Windows Phone took the second place in smartphone sales across the 20 countries of Latin America in Q2 — that includes Mexico, Columbia (25.6 percent), and Peru, where it's the number two mobile OS. In Argentina, Chile, and Brazil, it's number three (average out market size and share and you get second place. Kantar also puts Windows Phone in second place in Mexico, with 12.5 percent. Latin America is one of the fastest growing smartphone markets as well — sales were up 55.7 percent there.
Asia/Pacific: In Thailand, Vietnam, and Indonesia, Windows Phone has 20 percent market share (according to Nokia and GfK, who gives Nokia 30 percent share of the market if you include feature phones). Apple has only 12 percent market share in Thailand — and Indonesia and Thailand are the second and third largest smartphone markets in southeast Asia, whose 74.1 percent increase in smartphone sales in Q2 makes it the fastest growing smartphone territory overall.
Australia: iOS has had a steady 27-28 percent of the Australian market over the last year according to Kantar's figures; Windows Phone has picked up slightly, from 5.2 percent in Q2 2012 to 5.3 percent in Q2 2013 — falling sales of BlackBerry and Symbian boosted Android instead. But then in the three months to July Windows Phone jumped to seven percent of sales, taken from BlackBerry, Symbian and even a little from Android.
India: Nielsen put the Windows Phone market share in India at eight percent in September/October 2012, compared to 62 percent for Android, three percent for BlackBerry and one percent for iOS; that's based on surveys rather than sales figures, though. IDC confirmed Windows Phone as the number two smartphone in Q4 2012 with 5.4 percent, although as usual that's a long way behind Android (289,000 Windows Phone handsets shipped compared to 4.2 million Androids). Since then, Nokia has launched several new phones and the Lumia 520 and 620 are selling well (the Lumia 520 sold out at multiple online stores soon after launch). IDC gives Nokia 5 percent of the market in India in Q2 with some 465,000 phones shipped and it was LG India's marketing director who talked about the company developing a Windows Phone 8 handset.
As in other Asian markets, local phone makers that you probably haven't heard of (Micromax and Karbonn) are picking up market share; they take the number two and three sports after Samsung and they sell Android devices (particularly the 5-inch 'phablets' that are selling very well in India, making up 30 percent of smartphone sales there); Nokia is number four, ahead of Sony (Apple isn't even in the top five). Microsoft either needs to get more of the small local players looking at Windows Phone — or, more likely, Nokia will ship a 5-inch phone.
An interesting point for the continuing "how does Samsung do it?" discussions: in India, it offers cash-back and interest free monthly purchase plans for its phones.
China: Windows Phone only went on sale in China in March 2013; Microsoft claims after two months it had seven percent share, higher than the six percent of iOS. Kantar puts Windows Phone share for Q2 in China at 4.9 percent and iOS at 25 percent in its surveys. Microsoft has Huawei and ZTE on board, both big sellers in China; Apple has had long disputes in China over unauthorised sales and copycat devices, so this is a hard market for Apple for a number of reasons, including the fact that its devices don't work on China Mobile's SCDMA network. Nokia even made a special version of the Lumia 925 for China's TD-LTE network.
Russia: Russia's largest phone network MTC dropped the iPhone entirely at the end of 2012, in protest at the high subsidies Apple charges. That's part of the reason Apple market share in Russia dropped from nine percent to 8.3 percent in Q1 2013; Windows Phone almost matched that with 8.2 percent of sales up from 5.1 percent, according to IDC.
UK: According to Kantar Worldpanel, iOS had 30.5 percent of smartphone sales in the UK market in Q2 — mostly because of first time smartphone buyers picking up cheap iPhone 4 models. Android had 56.2 percent, Windows Phone 8.6 percent — or a little higher according to GfK.
But Windows Phone took 9.2 percent of sales in the UK in the three months ending in July in Kantar's figures; and 42 percent of Windows Phone UK sales in the past year have been to people buying their first smartphone. That's a higher proportion than either Android or iOS, despite the iPhone name and the cheap Android prices, and that's where Windows Phone could pick up more market share in the UK. Picking off new buyers could also be a longer term threat to Apple, unless they like those rumoured cheap iPhones.
US: The weakest market for Windows Phone but figures vary widely; a useful reminder that these figures are estimate based in some cases on sales reports and in others (as with Kantar' numbers) on phone surveys of phone buyers. Windows Phone share of sales dropped to 4 percent in Q2 according to Kantar, and to 3.5 percent in three months to July, compared to 4.6 percent across March, April and May or 5.6 percent across February, March and April; Android has 51 percent share, up from 49 percent in Q1 (but down from 59 percent in Q2 2012, with the lost sales going back to iPhone). Comscore puts Windows Phone at an even lower 3.1 percent for Q2, up from 3.0 percent in Q1; Nielsen estimates Windows Phone at two percent in Q2 (although both give BlackBerry a higher market share in the US in Q2 than Windows Phone, making their figures markedly different from all other analysts). Android and Apple dominate the US market and Windows Phone isn't likely to displace either of them, but increasingly the US market is very different from other large markets.
Western Europe: Windows Phone has 11 percent sales share in France in Kantar's figures for the three months ending July 2013 (so not quite comparable to IDC's Q2 figures) — up from 9 percent in Q2 and up from just 2 percent in May 2012, thanks to the Lumia 520 and HTC 8S selling well there. iOS has the lead at 17 percent, but not as large a lead as in stronger markets.
In Germany, Kantar said Windows Phone sales share had dropped from seven percent to six percent in Q2; that seems to have been a problem shipping units into stores as it's now back to 8.8 percent. The economic problems in Spain mean that both Windows Phone and iOS have very low market share (1.8 percent for Windows Phone, compared to more than 90 percent for Android).
In Italy, Kantar says Windows Phone has dropped from 14 percent to 10 percent in Q2, but then IDC says Nokia is the number two phone seller in Italy in Q2, behind Samsung and ahead of iPhone.
Android's combined sales share for Germany, France, Italy, Spain and the UK is 67 percent for Q2 according to Kantar, up to 69 percent for the three months to July; Windows Phone share across those countries has gone from seven percent to 8.2 percent. IDC calls Nokia the fifth largest smartphone vendor in Western Europe, with iOS dropping from 25 percent to 20 percent market share; Kantar puts it even lower at 18 percent to July.
So what do all the numbers mean?
In short, Windows Phone is still a long way behind iOS in the US, UK and similar markets and it might never catch Android anywhere — but if the trends continue, it has a good chance in emerging markets to be a solid second.
As Kantar analyst Dominic Sunnebo puts it, "Windows Phone... now represents around one in 10 smartphone sales in Britain, France, Germany and Mexico."
Perhaps the most surprising point about these figures; how small the iOS share of the market can be outside its core markets for what's perceived as one of the most successful smartphones worldwide. What it means to be number two rather than number three in the smartphone market is a smaller difference than you think.