Windows Phones make great market share gains in Europe

Worldwide, Windows Phone may hold a distant third-place spot in the smartphone market, but in Europe handsets running the mobile tiled OS are closing in on Apple's iPhones through huge share gains. According to a new Kantar Worldpanel ComTech report, in five key local markets Windows Phone sales more than doubled in Q3 2013, compared to the same period from last year. Meanwhile, iPhones lost market share.

In France, Germany, Great Britain, Italy and Spain combined, Windows Phone's market share grew to 9.8 percent in Q3 2013 from 4.6 percent a year earlier. The highest market share gains happened in France (to 10.7 percent from 5.2 percent), Germany (to 8.5 percent from 2.5 percent) and Great Britain (to 11.4 percent from 4.2 percent), with Italy and Spain posting more moderate growths (to 13.7 percent from 10.8 percent and to 3.7 percent from 2.2 percent, respectively). By contrast, in the said local markets iPhone's market share decreased to 14.6 percent in Q3 2013 from 16.8 percent a year earlier.

In Italy, Windows Phone sales actually managed to overtake those of Apple's smartphones, which is no small feat. The iPhones lost market share in four of the five local markets, with the exception being Spain where sales grew to 4.8 percent in Q3 2013 from 2.4 percent a year earlier.

Windows Phone's market share also grew in the US (to 4.6 percent from 2.7 percent), Australia (to 9.3 percent from 4.6 percent) and three Latin American markets (in Argentina, Brazil and Mexico, to 5.8 percent from 4.5 percent), but decreased in China (to 2.5 percent from 4.5 percent).

It goes without saying that Android's spot on the podium, as the most popular smartphone OS, is still mostly unaffected by either Windows Phone or iPhones. The only markets where its share decreased in Q3 2013, compared to a year earlier, are US (to 57.3 percent from 59.8 percent), Australia (to 55.3 percent from 66.1 percent), Germany (to 77.9 percent from 78.1 percent) and Great Britain (to 58.4 percent from 58.6 percent).

"Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian it now has an opportunity to regain the top-spot", says Kantar Worldpanel ComTech strategic insight director Dominic Sunnebo. "The majority of consumers in Latin America still own a Nokia featurephone and upgrading to an entry level Lumia is a logical next step. Price is the main barrier in developing markets and the budget Lumia 520 opens the door to smartphone ownership for many".

Sunnebo, however, warns that iPhones may claw their way back, and regain the lost market share. "August is traditionally a quiet month for Apple as consumers wait for the release of new models, and strong sales of the iPhone 5s and 5c at the end of September did not manage to make up for the lull. The full impact of the new iPhones will be seen at Christmas when iOS is expected to bounce back strongly in Britain, the US and Australia".

Windows Phone's decrease in market share (and that of the iPhone's too) in China can be explained, according to Sunnebo, by consumer's preference towards "best value for money" handsets.

"Chinese consumers are prepared to make a huge investment in their smartphone, with some spending up to 70 percent of their monthly salary on a new device", says Sunnebo. "With such a high investment, Chinese consumers want to get the best value for money and are increasingly opting for a high-spec local brand over a low-spec global equivalent. The message for global manufacturers is clear -- Chinese consumers demand value, and overpriced entry-levels models no longer cut it against increasingly impressive local competition".

Much of the Windows Phone gain comes from the Lumia 520, Nokia's entry-level smartphone running the tiled mobile OS. The handset has proved to be a huge success for the Finnish maker, that deems it responsible for a significant part of its 8.8 million Lumias it sold in Q3 2013.

While the market share gains signal a clear uptake in Windows Phone sales, it may not translate into an actual revenue growth for Microsoft or Nokia. Consumers who purchase entry-level Lumia 520s are unlikely to take the next step towards mid-range or high-end Windows Phones, which deliver higher margins for manufacturers, nor spend a significant amount on paid apps (well, not as much as a Lumia 1020 owner would, for instance). Still, the increase in market share is a positive sign for Windows Phone, which has long struggled to close in on iPhones.

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