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Microsoft announces an inventory of 1.5 million WP7 phones

post #1 of 79
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Microsoft has announced the shipment of 1.5 million Windows Phone 7 units into retail channel inventories, leaving the question of how well its new platform is actually selling unanswered.

Two months after WP7 phones initially hit the market, the company has issued a status report in the form of a press release phrased as an interview with Achim Berg, the vice president of business and marketing for Windows Phones.

Berg said that WP7 sales were "inline with our expectations," and stated that "phone manufacturer sales," defined as "phones being bought and stocked by mobile operators and retailers on their way to customers," had reached a milestone of 1.5 million units in the first six weeks.

Berg said this supply "helps build customer momentum and retail presence," and pointed out while that comparisons to other platforms were "a bit of apples to oranges," that "our numbers are similar to the performance of other first generation mobile platforms."

Berg did not specify whether he was referring to Apple's iPhone in 2007, Google's HTC/Android G1 in 2008, Palm's webOS Pre in 2009, Samsung's Bada Wave in 2010, or Microsoft's own KIN earlier this year, leaving WP7's similarity of performance difficult to qualify. However, the inventory levels WP7 shipments have reached are certainly not flattering when compared to the iPhone.

Early iPhone sales

In 2007, Apple introduced one hardware model with one carrier in one country, without a direct subsidy. This positioned the 8GB iPhone as a $599 device competing against other phones commonly offered for free or deeply discounted by carriers. Apple sold 270,000 in the last couple days of June, and another 1.1 million in the first full quarter it was on sale. During the last month of that quarter, Apple dropped the iPhone's price by a third, leaving it still premium priced at $399 with a two year contract.

By the third calendar quarter of 2007, Apple had already surpassed Microsoft's Windows Mobile in North American market share. Microsoft's established platform already had worldwide exposure, although the vast majority of its sales were in the US.

It wasn't until November that Apple expanded iPhone sales to Europe, which resulted in sales of another 2.3 million. The company subsequently launched the iPhone 3G in the summer of 2008 at a much lower price point, thanks in large part to conventional carrier subsidies and a slightly higher contract price. Apple sold 6.7 million iPhone 3G models in its launch quarter, at which point the company had lined up carriers in 44 countries.

At the end of that quarter, the company reported having less than 6 weeks of inventory in the channel, which the company described as optimal. That inventory padding, which consisted of "phones being bought and stocked by mobile operators and retailers on their way to customers," was stated at the time to be 2 million devices.

The Global Channel

While Microsoft's WP7 represents a new development platform, it is not a new business for the company. Unlike Apple, Microsoft did not need to slowly ramp up sales with a single carrier in the US before slowly going global over the next year. Instead, Microsoft launched WP7 across 60 carriers in 30 countries, including all four major US carriers.

It could do this because the company has established business relationships with carriers as the vendor of Windows Mobile, the previous name of Microsoft's Windows CE-based phone platform. The company also committed $500 million in promoting the WP7 launch, the same amount Apple spent on advertising for all of its products combined last year.

The WP7 inventory Microsoft reports that its hardware makers have shipped to stores within the first six weeks (including launches in Europe, Singapore, Australia, Canada, Mexico and the US) is less than the inventory Apple reported in its inventory channel for the iPhone 3G in 2008. This does not offer any suggestion that consumers are actually buying Windows Phone 7 devices. Instead, it very clearly indicates there are no real sales to report at all. Even Microsoft's lackluster Windows Mobile sales of the past few years represented far more than 1.5 million units per six weeks of sales.

By the time that Apple had created a global channel with the capacity to stock 2 million iPhones "on their way to customers," it had already sold 13 million iPhones. It a significant problem that Microsoft can only report having shipped channel inventory, despite the fact that it has WP7 distribution agreements with all four top US carriers and began selling across Europe from the first day of its launch.

Apple only began expanding beyond its first five European carriers at the launch of the second generation iPhone 3G in July 2008, and didn't reach the extent of Microsoft's sales distribution (or channel inventory capacity) until August 2008. This indicates that WP7 should actually already have much closer to 2 million phones sitting in inventory, even before end users actually being buying them. Anything less than that (and 1.5 million is significantly less) indicates that the channel doesn't want to hold much inventory of WP7 phones because retailers are not sure they're going to actually sell them.

This harmonizes with the complete disinterest in WP7 among consumers observed in the market, despite the fact the WP7 phones are not selling at premium prices like the original iPhone, but rather being promoted in buy-one-get-one offers and at deeply subsided prices, just like other phones on the market.

WP7 performing far worse than Windows Mobile 6

Additionally, Apple's carrier agreements through the beginning of 2008 were all exclusive; the company didn't even begin offering iPhones through competing carriers until that summer, and still hasn't expanded beyond AT&T (yet) in the US. Microsoft began with twice as many carriers as countries however, indicating that most of its carrier agreements are competitive, and logically should accommodate more inventory than were it only selling phones through a single carrier in each country.

Comparing Apple's historical iPhone sales to those of WP7 is not flattering even when ignoring the entire existence of Microsoft's Windows Mobile platform. However, even if we assume that Microsoft will rapidly sell through its inventory and replenish at the same rate of 1.5 million device every six weeks, the company is still well below the historical performance of Windows Mobile, which hasn't been exceptional since the iPhone shipped.



If comparisons to Apple's iPhone seem unfair, consider how Microsoft's international launch of WP7 compares to Samsung's Bada OS platform, which was launched in Europe this summer. Despite running a proprietary operating system that's less than an household name, the new Samsung S8500 Wave sold a million units in just four weeks in Europe, even before reaching the US. The phone sells unlocked for $399, and has hardware comparable to the Samsung's Android-based Galaxy S.

WP7 apps hit milestone of 4,000

Microsoft's announcement did offer some positive sounding news regarding apps for WP7. The new Windows Phone Marketplace now offers 4,000 apps from a variety of developers. The bad news is that Microsoft claimed the previous version of its mobile platform, Windows Mobile 6, had 18,000 commercial apps, but that catalog in and of itself wasn't enough to attract users, particularly in competition with the iPhone.

At the beginning of December, Microsoft announced having "nearly 4,000 apps" available for WP7, indicating that developers' interest in the platform hasn't grown by much throughout December, despite the new app store just having opened.

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post #2 of 79
I happen to like windows phone. I'd pick one up for my parents. Still not even close to prying my fingers from my i4.
post #3 of 79
Hopefully it will do well enough to take share away from Google.
post #4 of 79
"inline with our expectations," O.K. They expected to sell 12. Way to go, MS.
post #5 of 79
Why is building 1.5 million unsold phones a milestone? Is the next milestone dumping these things in a guarded Utah landfill for a tax write off?
post #6 of 79
MS still would not reveal numbers that actually matters.. How many sold to end-users?
post #7 of 79
Quote:
Originally Posted by ghostface147 View Post

I happen to like windows phone. I'd pick one up for my parents. Still not even close to prying my fingers from my i4.

Who buys phones for their parents?
post #8 of 79
Quote:
Originally Posted by Wurm5150 View Post

MS still would not reveal numbers that actually matters.. How many sold to end-users?

They also have not paid their app developers (payments don't start until March next year) and have not reported number on app sales.
post #9 of 79
Quote:
Originally Posted by ghostface147 View Post

I happen to like windows phone. I'd pick one up for my parents. Still not even close to prying my fingers from my i4.

If you really love your parents you'd get them iPhone 4. I got my mom an iPhone. She loved it. I was amazed at how quickly she learned to use it.
post #10 of 79
Look, I think the numbers are bad, very very bad.

If the numbers were even close to half a million, they would have been revealed.

Microsoft revealed the numbers for Kinnect, so why not reveal numbers for WP7 as well?

Because the numbers suck.

Time will tell.
post #11 of 79
Seems like such an odd thing to announce: we have 1.5 million phones "in the channel" during the first 6 weeks. I'm reading that as 1.5 million phones just waiting to be purchased. But manufacturers are selling which is good for OEMs and helps Microsoft convince them to continue to invest in this. But is this sustainable? How likely is it that this stocking rate continues?

Also loved this quote from the press release:

"We believe that to succeed in mobile you need, first of all, a great product, and we think we have that. What were hearing from our customers is that theyre thinking the same way."

Doesn't state that customers like the Windows phones. Only states that Microsoft thinks they have a great phone. Are the few actual customers wishing they didn't buy your products? Do they decide they want a great product and just buy the iPhone? The press release is notable in how few signs of encouragement there are. He doesn't report specific enthusiastic responses or even areas where there might be sparks of interest.

I can't believe I'm about to say this but MS looks like the underdog in this mobile effort. I so want creativity and possibly there is some here. There must be life beyond the iPhone and Android pages of icons paradigm. It's worked well so far but c'mon. I so want more UX designs to succeed. I haven't had enough of a demo to say I what MS did but I hope sales (and some market share) are some reward for their bold attempt and the creativity.
post #12 of 79
Next to nothing, and actually shows a disturbing lack of interest.
post #13 of 79
Maybe channel numbers are all MS really has to report right now. Perhaps they are waiting until the end of quarter, perhaps to announce at CES, when they get actual numbers from carriers and vendors. While this may not be the case we should keep in mind that MS is only providing the OS for the phones; they aren't the OS, HW and seller of the devices the way Apple is.
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post #14 of 79
Quote:
Originally Posted by esummers View Post

They also have not paid their app developers (payments don't start until March next year) and have not reported number on app sales.

You are wrong.

"And perhaps most importantly, developers can expect the first payout of sales to date to take place in February."


That information was freely availible on 10/4 on this blog post.

http://windowsteamblog.com/windows_p...or-launch.aspx

I have no doubt that if you signed up for the developer tools and tried to publish one of your applications that you will get even more inforation about payments.

Of course the iFan blog world thinks this is recent news and some kind of slight by MS to developers or a sign they are not doing well, even though it was the plan all along.

Dont feel to bad, you are not alone in beliving the BS at this site.
post #15 of 79
Quote:
Originally Posted by AppleInsider View Post

Berg did not specify whether he was referring to Apple's iPhone in 2007, Google's HTC/Android G1 in 2008, Palm's webOS Pre in 2009, Samsung's Bada Wave in 2010, or Microsoft's own KIN earlier this year, leaving WP7's similarity of performance difficult to qualify. [ View this article at AppleInsider.com ][/c]

I found that to be funny.

Yea MS is finished in the mobile phone business, and it does not look like it has time to make a comeback in the tablet business. It should focus on Office and Xbox for the future.
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post #16 of 79
Another hit piece by AI. If they has sold 3 million, AI would have still spun it negative and compared it to the iPhone.

I wish AI was a racing horse, it would be a sure bet every time.
post #17 of 79
Quote:
Originally Posted by solipsism View Post

Maybe channel numbers are all MS really has to report right now. Perhaps they are waiting until the end of quarter, perhaps to announce at CES, when they get actual numbers from carriers and vendors. While this may not be the case we should keep in mind that MS is only providing the OS for the phones; they aren't the OS, HW and seller of the devices the way Apple is.

Exactly. Boy, talk about ready, fire, aim. I don't seriously expect WP7 to rescue Microsoft in the mobile market or otherwise make much of a dent in the universe -- but if they do sell 1.5m units in the first three months, who's going to be calling it a complete failure?
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post #18 of 79
I finally saw one in the wild this past weekend. Of course I live in Seattle and this belong to the husband of a MSFT employee who told me that Microsoft is actually cutting off subsidies of employees who choose an iPhone...
post #19 of 79
Quote:
Originally Posted by bettieblue View Post

Dont feel to bad, you are not alone in beliving the BS at this site.

I'm sure everyone on this board feels very fortunate to have you here to correct their benighted illusions. (And so graciously, too!)
post #20 of 79
We should be seeing the BOGO offers or similar giveaways very soon.
post #21 of 79
Well I know where eight of that 1.5 million are, in our storeroom, we got ten a couple of months ago and sold two.

The only things sadder are the piles of Nokia N97's gathering dust.

iPhones go as fast as we get them.

Androids are moving fairly slowly as well, the older models (X10, Legend, Motorola Flipout) languish while the Desire HD and Galaxy S move steadily.

Nothing comes close to demand for iPhones.
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post #22 of 79
Quote:
Originally Posted by Psych_guy View Post

We should be seeing the BOGO offers or similar giveaways very soon.

They still sold two licenses.
post #23 of 79
Quote:
Originally Posted by Dr Millmoss View Post

Exactly. Boy, talk about ready, fire, aim. I don't seriously expect WP7 to rescue Microsoft in the mobile market or otherwise make much of a dent in the universe -- but if they do sell 1.5m units in the first three months, who's going to be calling it a complete failure?

Their app numbers look pretty good, too. They will probably 5,000 apps by CES, if not by the new year. Sure, that’s a drop in the bucket compared to iOS and Android, but if I read correctly that is a growth rate that is exceeding Android Marketplace apps for similar timeframes.

http://wp7applist.com/stats/ I’m not a developer so I can’t be certain, but I’d think that logistically devs would find WP7 easier and cheaper to develop for than Android due the limited number of HW and handsets to build for. Plus, devs I know — even ones that use Macs — seem to prefer .Net over Xcode so it’s possible that MS has a fighting chance.

In any case, it seems clear there is no way to determine success or failure at this point and time.
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post #24 of 79
Quote:
Originally Posted by Wurm5150 View Post

MS still would not reveal numbers that actually matters.. How many sold to end-users?

That's what I was thinking. Who cares how many they have built. How many have sold.
post #25 of 79
Quote:
Microsoft launched WP7 across 60 carriers in 30 countries, including all four major US carriers.

I thought they were only GSM (AT&T and T-Mobile) at this point.
post #26 of 79
Quote:
Originally Posted by Dlux View Post

I thought they were only GSM (AT&T and T-Mobile) at this point.

Good catch. MS stated a CDMA-based version wont come until mid-2011.
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post #27 of 79
Quote:
Originally Posted by esummers View Post

They also have not paid their app developers (payments don't start until March next year) and have not reported number on app sales.

Next March? Welcome to the digital age, when money is just a series of bits to move instantly from one place to....

Oh forgive me, for a moment I forgot it was MS we were speaking about.
post #28 of 79
Verizon and Sprint are coming in January....
http://wmpoweruser.com/verizon-apps-...n-marketplace/
post #29 of 79
Quote:
Originally Posted by bettieblue View Post

Another hit piece by AI. If they ha[d] sold 3 million, AI would have still spun it negative and compared it to the iPhone.

I wish AI was a racing horse, it would be a sure bet every time.

How true!
post #30 of 79
Quote:
Originally Posted by bettieblue View Post

You are wrong.

"And perhaps most importantly, developers can expect the first payout of sales to date to take place in February."


That information was freely availible on 10/4 on this blog post.

http://windowsteamblog.com/windows_p...or-launch.aspx

I have no doubt that if you signed up for the developer tools and tried to publish one of your applications that you will get even more inforation about payments.

Of course the iFan blog world thinks this is recent news and some kind of slight by MS to developers or a sign they are not doing well, even though it was the plan all along.

Dont feel to bad, you are not alone in beliving the BS at this site.

Okay, he said March, and your blog says Feb. I think the point here is, the app developers aren't getting paid in a timely manner. Would you go through the effort of developing an app for a company that may or may not pay you in 3-6 months time? (With only 4000 apps in the store, that should answer the question.)

Makes you wonder if M$ did something like this, because they wanted to give themselves 6 months before pulling the plug if sales sucked. And of course, then not pay any of the app developers. That's just pure speculation on my part, but with Ballmer at the helm, nothing is out of the realm of possibility.
post #31 of 79
Quote:
Originally Posted by hill60 View Post

The only things sadder are the piles of Nokia N97's gathering dust.

The N97 is two years old, your moaning about the N97 is getting a little old, sure it is a shit phone, no one is arguing there, but it is time to let go..

Or would you like me to start saying how crap my Performa 6320CD was?
post #32 of 79
How many words in that ridiculous article? Feeling threatened much?

The fact is the best days of the iPhone are over, it will not take over the world, whether it loses to Android or Windows phone 7, and is back on the way to OSX irrelevance.

This will in fact break Apple, as their iTunes media dominance will also be killed, as they rapidly become a minority media player.



Apple's vertical model has failed once again, no wonder they are now selling the iPhone in Sams club.
post #33 of 79
Quote:
Originally Posted by solipsism View Post

Maybe channel numbers are all MS really has to report right now. Perhaps they are waiting until the end of quarter, perhaps to announce at CES, when they get actual numbers from carriers and vendors. While this may not be the case we should keep in mind that MS is only providing the OS for the phones; they aren't the OS, HW and seller of the devices the way Apple is.

Apple and Google know the all important numbers through activations. Surely MS phones require something similar.
post #34 of 79
Quote:
Originally Posted by bunnyturd View Post

If you really love your parents you'd get them iPhone 4. I got my mom an iPhone. She loved it. I was amazed at how quickly she learned to use it.

I assume you're joking

If not, you seem to be confusing love with buying stuff, which given our collective search for meaning and satisfaction in stuff, that's understandable but misguided. I love my Mum dearly but I show that by phoning, visiting, helping her with chores, reading to her, taking her for walks, cooking her dinner, sending cards, helping her with financial stuff and just sharing tales, jokes, stories and memories. And being there as best I can should she need me. Not by buying her an iPhone4!
post #35 of 79
I lol'd You've got to feel sorry for the dude that has to try and spin these announcements!

In any case I would be amazed if the sales didn't come. Anyone that has used one of the damn things can tell you Microsoft have put together one of the best, if not the best, mobile OS on the market. It just happens to be immature and needs some updates to flesh out the feature list.

It's going to be interesting to see if Microsoft keep backing WP7 over the next 12 months like they have the past 12, and if the management can stay out of the way of the great work the engineers are pulling off.



Quote:
Originally Posted by Mac.World View Post

Okay, he said March, and your blog says Feb. I think the point here is, the app developers aren't getting paid in a timely manner.

Actually payment dates have been pushed forward again. They are running something like a month in advance of the announced schedule. Pretty impressive stuff - or under promise, over deliver... one or the other
post #36 of 79
Quote:
Originally Posted by jfanning View Post

The N97 is two years old, your moaning about the N97 is getting a little old, sure it is a shit phone, no one is arguing there, but it is time to let go..

Or would you like me to start saying how crap my Performa 6320CD was?

It's called channel stuffing, Nokia counted those phones as "sold" over a year ago, they are still available to buy but no one really wants them, so they sit gathering dust, it makes you wonder how long the N8's and C7's will sit there for, alongside the HTC torches.
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post #37 of 79
Quote:
Originally Posted by solipsism View Post

Maybe channel numbers are all MS really has to report right now. Perhaps they are waiting until the end of quarter, perhaps to announce at CES, when they get actual numbers from carriers and vendors. While this may not be the case we should keep in mind that MS is only providing the OS for the phones; they aren't the OS, HW and seller of the devices the way Apple is.

All very true but then why provide any numbers at all if it adds no clarity to the situation? Providing the numbers like MSFT did in this manner makes it seem like they have something to hide. If Apple and Google can talk about activations per day, I would have to think MSFT has access to the same numbers but has chosen not to report them. Maybe they feel the numbers are too puny in comparison to otherOS phones to report or maybe they just wanted to report a large number so things would look more impressive right now. But this could also backfire if this is the case. If MSFT actually sold a half million phones, while not great, I wouldn't think that would a bad start for the phone. But in the face of having shipped 1.5 million phones, it would seem that MSFT would have missed it's target. In my mind, they would have to have sold at least a million phones to make the shipping number seem reasonable
post #38 of 79
Microsoft Wndows Phone 7 was dead on arrival. Horrible UI, horrible software, bland cloner phone hardware, and locked to the super expensive proprietary Microsoft OS.
post #39 of 79
Quote:
Originally Posted by esummers View Post

Who buys phones for their parents?

I do.

Quote:
Originally Posted by bunnyturd View Post

If you really love your parents you'd get them iPhone 4. I got my mom an iPhone. She loved it. I was amazed at how quickly she learned to use it.


They don't like the poor implementation of notifications. Besides, it's buy one get one free.
post #40 of 79
Quote:
Originally Posted by ghostface147 View Post

I happen to like windows phone. I'd pick one up for my parents. Still not even close to prying my fingers from my i4.

Hehe, why don't you get one for yourself? Did your parents torture you when you were young and now you want the revenge it with Windows phone?
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