Microsoft breaks silence on Windows Phone 7 sales ... sort of

Microsoft breaks silence on Windows Phone 7 sales ... sort of

Summary: Microsoft has unexpectedly broken the silence over sales of its new Windows Phone 7 handsets to announce that over 1.5 million were sold to mobile operators and retailers during the first six weeks of availability.

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Microsoft has unexpectedly broken the silence over sales of its new Windows Phone 7 handsets to announce that over 1.5 million were sold to mobile operators and retailers during the first six weeks of availability.

Achim Berg, Microsoft’s vice president of business and marketing for Windows Phones, broke the news as part of a broader Q&A on the Microsoft News Center website:

Sales are ramping well as our reputation is growing for offering users a unique experience and are in line with our expectations – especially when compared to other new platform introductions. With a new platform you have to look at a couple of things, first of all customer satisfaction. As I mentioned before, we’ve seen great response on the complete mobile phone experience.

Another is phone manufacturer sales – phones being bought and stocked by mobile operators and retailers on their way to customers. We are pleased that phone manufacturers sold over 1.5 million phones in the first six weeks, which helps build customer momentum and retail presence.

Note that the figure quoted here is stock shifted from manufacturers to retailers, and NOT handsets sold to consumers.

LET ME REPEAT THAT - THIS 1.5 MILLION FIGURE DOES NOT REPRESENT SALES OF WP7 HANDSETS, ONLY STOCK SHIFTED FROM MANUFACTURERS. Actual sales figures will be lower than this. How low? Well, maybe there's a reason Microsoft decided to be coy about the figures.

When asked how sales stacked up compared to the competition, Berg had this to say:

It’s a bit of apples and oranges comparison; our numbers are similar to the performance of other first generation mobile platforms. We introduced a new platform with Windows Phone 7, and when you do that it takes time to educate partners and consumers on what you’re delivering, and drive awareness and interest in your new offering. We’re comfortable with where we are, and we are here for the long run; Windows Phone 7 is just the beginning.

That's a good, solid start for a new platform.

Topics: Telcos, Enterprise Software, Microsoft, Mobility, Operating Systems, Software, Windows

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26 comments
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  • Two important things to remember.

    First, MS is [b]not[/b] saying that 1.5 million devices have been purchased by consumers. They're touting how many phones have been sold to retailers and carriers. Hell, they haven't even said how many have shipped.

    Second, the fact that they haven't given any kind of meaningful number is probably more telling than what they did say. MS has shown that it will play the "numbers game" when it suits them, so that they haven't given us an "activated" number probably means that the device just isn't selling well.
    matthew_maurice
    • RE: Microsoft breaks silence on Windows Phone 7 sales

      @matthew_maurice
      "Hell, they haven't even said how many have shipped."

      Uhm...technically, that's EXACTLY what they just said. >.>
      Zedox
      • Not really. Punctuation matters.

        @Zedox Berg broke that into two sentences. Which implies they're not the same. All he's [i]actually[/i] saying is that OEMs have sold 1.5 million units, not necessarily delivered. Yes, the inferrence is that the OEMs have sold and retailers/carriers have stocked those units, but if that's the case why not explicitly state it? Maybe I'm too much of a cynic, but "weasel-y language" comes too easy to most corporate talking heads. As a result I only accept what they flat-out say.
        matthew_maurice
      • Its only 35714 daily sales, activations are less

        So this is under 5% of the market share. Doesn't look good for MS.
        Uralbas
      • RE: Microsoft breaks silence on Windows Phone 7 sales

        @Zedox No it isn't. Sold and shipped are very different things.
        jeremychappell
      • RE: Microsoft breaks silence on Windows Phone 7 sales

        Actually, that is exactly what they said.
        "We are pleased that phone manufacturers sold over 1.5 million phones in the first six weeks". I don't see the word shipped anywhere. Again, MS underestimates the intelligent of their customers. Think of all the Kin that were 'sold', it was a larger number then those actually manufactured. Plus how many are collecting dust in warehouses in China?
        john_gillespie@...
    • RE: Microsoft breaks silence on Windows Phone 7 sales

      @matthew_maurice I am no windows phone advocate, but its a new platform. You can't say that apple hasn't played the numbers game every single time their devices has had a release. It'd only android that Google publishes activation numbers.
      Jimster480
      • Actually, you have to read the small print.

        @Jimster480 Until GAAP was ammended, Apple reported both GAAP and "non-GAAP" numbers. Both of which included "booked" sold, and [b]paid for[/b] numbers. Apple doesn't allow device sales without activation, so by definition every Apple sale counted as an activation. Part of Steve Jobs', chintzy IMHO, criticism of Google is that while it reports activations it's more than a little nebulous about the number, but that's understandable because Google isn't selling the devices [with the exception of the Nexus 1, and now S], the OEMs are. Microsoft has the same situation, so I'll cut them some slack. My point is that Microsoft isn't commenting about "activations" [b]at all[/b]. That's raising a a red flag amongst those who parse phrases and read financials.
        matthew_maurice
      • RE: Microsoft breaks silence on Windows Phone 7 sales

        @Jimster480
        You do realize that every time you flash Android with a custom ROM, that count as activating?
        illegaloperation
    • RE: Microsoft breaks silence on Windows Phone 7 sales

      @matthew_maurice

      How many people that post here have every actually run a business? I am a parts manager at a Nissan and Hyundai dealership and do a high volume of retail and wholesale parts; so I know a great deal about inventory. As a retailer I am not going to order more than I can sell. Stocking guidelines are going to be different in varying products, markets, and business models, but you still have to account for anticipated sales and lost sales. This is just as true when looking at your financial statement and choosing your business model for the size of your area and anticipated number of employees. This is not a hard concept to understand. I own an iPhone4, but the Samsung Focus WP7 I saw is a great device. Geez, I wish the haters would stay home.

      MacBook Pro CTO (Uni-Body) 2.93 Core2Duo, 4G Ram, 320GB 7200RPM HD, 512 NVDIA Discrete Graphics, 256 NVDIA Integrated Graphics
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      White MacBook (Original Style) 2.0 Core2Duo, 2G Ram, 120GB 5400RPM HD, Intel Integrated Graphics
      MichaelWells
      • Good point, but it's only partially applicable.

        @MichaelWells Retail sales accounting is a little different from manufacturer sales accounting, which is part of my point. Manufacturers can "sell" product far in advance of production, and account for it later. Microsoft does this a lot with Windows licenses. MS "sells" the licenses to OEMs long before OS release so they can build new machines for release day, but the OEMs rarely pay MS in advance. The result is that they work out a deal where the OEMs "buy" the licenses and pay MS after the devices sell (often as "late" as retail to the consumer) so MS can't "book" the sale until much later. This is seen when MS financials show deferred revenue on Windows licenses in the quarter <i>after</i> an OS release.<br><br>I never said MS was doing anything dishonest. My point all along has been that this number is telling for what <i>wasn't</i> said. I don't think WP7 is a bad OS. In fact quite the opposite, people who's opinion I respect say good things about it. The problem is that it's likely too little, too late for Microsoft in the mobile OS arena. I remember supporting WinCE devices in 2001, and to think that <i>this</i> is where MS is at after having a 10 year head start on everyone is truly indicative at how badly Microsoft can execute at times.</b>
        matthew_maurice
  • RE: Microsoft breaks silence on Windows Phone 7 sales

    You guys worry too much... I am an Android user but a microsoft presence could push google to fix bugs faster so I am all for it.
    slickjim
  • Another EPIC = FAIL

    rumor has it that they only sold 50000 phones WORLDWIDE!!!!
    Ron Bergundy
    • Didn't you say another number

      <A HREF="http://www.zdnet.com/tb/1-91428-1740329">In another post?</A> Either way, a link or source for your numbers would be nice, otherwise, well.....

      Eitherway, Microsoft is in it for the long haul, I wish I knew why that doesn't sit well with you...
      The one and only, Cylon Centurion
      • RE: Microsoft breaks silence on Windows Phone 7 sales

        @Cylon Centurion 0005 This sound like anything but a good start. The fact that they are suggesting they still need to educate PARTNERS, that's not at all good.

        Really what did anyone expect them to say? "Yeah, well we're gonna see if this sticks in the next quarter after that we'll give up and create a new plan"? Another strong player in the phone OS market would be good, but thus far it doesn't feel like Microsoft have all their duck in a row. Maybe they do, but I'd have expected to see them "in the wild" - and I haven't seen any.
        jeremychappell
  • Bad, bad news for microsoft

    Remember when MS. Said they 'sold' a million Zunes, and it turned out they showed up in Amazons bargain bin for half price? And MS said back then 'in it for long haul'. Translation: we can't sell these things at all! But thanks to the cash hoard gained from our illegal monopoly, we can keep failing businesses (search, xbox, Zune,) afloat.

    The worse news is it only gets worse from here. The only people buying MS phones are Apple and Google haters. They already bought a MS phone! Sales will now go down

    You can't trust MS' numbers. The knew people were waiting for them so they forced retailers to take a huge amount of them so they could report 1.5M.

    Once MS releases the activation numbers, which they still haven't done for the Zune, then we'll see how badly they are getting their butt kicked.

    Zune: failure
    Windows Tablets: ten years of failure
    Kin: incredible failure
    Win 7 phones: future incredible failure
    ShazAmerica
    • Hold up a second.

      @ShazAmerica
      The one and only, Cylon Centurion
    • RE: Microsoft breaks silence on Windows Phone 7 sales

      @ShazAmerica Interesting list in the parenthesis at the beginning of your post. I might agree with search and Zune being a fail, but I don't think I've heard many people call the XBox a fail.
      ComputerDinosaur
      • RE: Microsoft breaks silence on Windows Phone 7 sales

        The xBox is a success ... but MS has not made a dime on it yet. They have made some $$ on their cut of the games since they have been able to apply preasure to some game producers. As we see more game studios making their games for both xBox and PS3 that may cut MS profits in that sector.They have been making improvements to the xBox experience and have been discounting the cost of their xBox live but the PS3 system is still better. Just ask the Air Force :)
        john_gillespie@...
    • RE: Microsoft breaks silence on Windows Phone 7 sales

      @ShazAmerica XboX can't be included in your 'Fail' list because.. well it hasn't failed it actually now makes money. Sure it was an investment but that's now paid off. Is WP7 another investment? We'll have to wait and see, but if that side of the business get's they're act together theres no reason WP7 couldn't and shouldn't be a credible platform, after all they've learned lessons from their own successes and setbacks and also from those of the competition and tightened up on the access to the platform for devs - bad applications and poor implementations were part of the root cause of Mobile 6.x's demise - If you want to add another "fail" to your list then what about the billions of dollars lost in online services. That must surely be an EPIC FAIL.... but actually it's also a strong investment in future service support and delivery. This is not about a 3 month profit, MS have - by whatever definition you choose to use - a comfortable financial cushion which they can use to support longer-term investments and we should be pleased about this too, as the more strong players we have in the market, the better OUR products and choice will be.
      Silesti