37 Million Reasons to Take Microsoft Seriously
When Microsoft (NAS: MSFT) agreed to pay Nokia (NYS: NOK) billions to back its fledgling mobile operating system, it was easy to wonder what Mr. Softy was going to get for its money.
Finland's Nokia is the world's largest handset manufacturer, but the booming popularity of Apple's (NAS: AAPL) iOS and Google's (NAS: GOOG) Android were rendering the company irrelevant with every passing quarter.
Nokia obviously can't crank out iPhones, and it was apparently too proud to put too much weight behind the Android movement. The Symbian smartphone platform that Nokia was championing was big but was fading fast. Nokia decided to take Microsoft's money over riding Symbian into the ground, and now we're starting to see the fruit of that monetary harvest.
Nokia is showing off the Lumia 900 this week. Regardless of if it's a hit, the Windows Phone-powered Nokia handsets will continue to trickle in -- and it's going to be a deluge.
Morgan Stanley now expects 37 million Nokia-Microsoft phones to ship this year, followed by 64 million more handsets in 2013. We're talking about more than 100 million Windows Phone smartphones hitting wireless carriers within these two years, if Morgan Stanley's on target.
That's huge when you consider that just 1.7 million Microsoft handsets hit the market during last year's third quarter, according to trend tracker Gartner. Nokia's push won't get it up to Android or iOS levels, but it won't be long before Microsoft overtakes a fading Research In Motion (NAS: RIMM) and the Symbian zombie for the bronze.
Let's revisit Gartner's data for the third quarter.
Operating System | Q3 Handsets | Q3 2011 Share | Q3 2010 Share |
|---|---|---|---|
Android | 60.5 million | 52.5% | 25.3% |
Symbian | 19.5 million | 16.9% | 36.3% |
iOS | 17.3 million | 15.0% | 16.6% |
RIM | 12.7 million | 11.0% | 15.4% |
Bada | 2.5 million | 2.2% | 1.1% |
Microsoft | 1.7 million | 1.5% | 2.7% |
Source: Gartner.
Flooding the market with product doesn't mean that folks will be buying, but Microsoft's made too big a wager to go down without a fight. If there's a glut of phones, carriers will just cash in by practically giving them away in exchange for two-year contracts.
One way or another, things will get interesting once the platform is in the hands of the masses. Developers will drum up app support. Windows may actually be cool again on some level.
It's just a little light rain out at the moment, but Microsoft's storm is coming.
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At the time thisarticle was published The Motley Fool owns shares of Google, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, and Google; and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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