Windows Phones: Apps Gaining, Awareness Growing, Outlook Uncertain

There are three pieces of data recently out that paint a modestly upbeat, if mixed, picture for Windows Phones. Though Nokia's Lumia phones are not being released in the US until next year, awareness and potential demand for the Microsoft-powered devices in the US are rising (with Samsung and HTC models available).

According to recent survey data from The NPD Group, among those seeking to buy a smartphone within the next six months, a meaningful percentage of would-be smartphone buyers are considering a Windows Phone. Here are a few survey highlights: 

  • Android holds greater interest than other mobile OS (among 63% of respondents)
  • However 44% "of smartphone owners, and those who intend to buy one, are considering purchasing a Windows Phone 7"
  • Yet 45% of surveyed consumers are "still not aware of Windows Phone 7" 
  • Among those not interested in Windows Phones, 21% said the were "too invested" in another OS (iPhone, Android).

The availability of apps is critical to the near and long-term success of Windows Phones. To that end Distimo, which tracks app store inventories and downloads, released data showing strong growth of apps in the Windows Phone 7 Marketplace:

  • The Windows Phone 7 Marketplace is the fifth largest OS application store worldwide
  • The most popular category in the Windows Phone 7 Marketplace is Games. Other popular categories are Tools & Productivity, Entertainment and Travel & Navigation.
  • Paid applications in the Windows Phone 7 Marketplace have grown continuous [sic] with almost 1300 new paid applications every month. Free applications have increased on average by 1650 new free applications month-over-previous month.
  • The number of publishers has consistently grown since the launch of the Windows Phone 7 Marketplace with 700 new publishers per month.
  • Nearly 50% of all applications are available in the 17 countries in which the Windows Phone 7 Marketplace was originally accessible. One-third of all applications are available in all 35 countries.
Windows Phone Marketplace stats

Overall the Windows Phone Marketplace now has roughly 40,000 apps according to All About Windows Phone. While this is a fraction of what's in the iTunes app store or Android market, The Windows Marketplace is just a year old this month. Microsoft is currently running a promotion where they give new Windows Phone buyers $25 to spend on apps.

This positive momentum is tempered by a widely covered "downgrade" of the new Nokia Windows Phones. An analyst at Pacific Crest Securities cut his forecast for Nokia Windows Phone sales by 75% (from 2M to 500K). This was based on his view that Nokia Windows Phones were not sufficiently differentiated and were without "breakthrough innovation." He also believed they were not aggressively enough priced to generate significant demand. 

However Nokia has said it will use price to compete. One must also recognize that this is one person's judgment based on preliminary information. Yet if this prediction comes true and another year of Nokia-Windows phones goes buy with unimpressive sales (and Nokia's share continues to decline) it will signal a major problem (even panic time) for both Nokia and Microsoft.