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Summary:

Microsoft said today Windows Phone 7 manufacturers have sold 1.5 million phones to operators and retailers since the launch. But the company gave no indication of how many phones have been activated by end users, which would better explain how the new platform is faring.

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Since the launch of Windows Phone 7, a fun way to pass the time has been to try to guess the number of devices that Microsoft has sold. Today, we got a sense of that — although without a definitive answer on end-user sales — when the company said Windows Phone 7 manufacturers have sold 1.5 million of the devices to operators and retailers since the launch last month.

While not a blockbuster hit, that’s a decent number, and it provides a counterpoint of sorts to early indications that the new phones were not selling well. That said, however, it’s still impossible to tell how many phones are sitting on shelves and how many have been activated. As Kevin noted last week, retailers and operators have stepped up their buy-one-get-one free offers for Windows Phone 7 devices rather quickly for a new phone. Kevin also reported that data-analytics company Chitika said Windows Phone 7 devices were barely registering on its network. So it’s unclear if 1.5 million reflects early bets by operators on WP7 or if people are really giving the new platform a try.

Microsoft, for its part, hasn’t had the best of luck with partner Dell, which has struggled to get its Dell Venue Pro WP7 phone out on time. There were some early reports of sell-outs of devices, although that was apparently temporary.

Not surprisingly, Microsoft seems pleased by the early results, saying Windows Phone 7 is off to a promising start. Though it’s not really a fair comparison, Apple sold 1 million iPhones to users in 74 days when it launched with AT&T in 2007. Achim Berg, Microsoft’s VP of business and marketing for Windows Phones, said in a Microsoft blog interview that customer satisfaction has been good, and the launch of Windows Phone 7 has been similar to other first-generation mobile platforms. “We’re comfortable with where we are, and we are here for the long run,” Berg said. “Windows Phone 7 is just the beginning.  Our opportunity is to make sure people get to play with a Windows Phone. Once they do, they love it. This is very important for us.”

Berg makes it sound as though all will be well if Windows Phone 7 can pull off a similar launch to other platforms like iOS and Android. But the company is already three years behind; it needs to do more than just match the early performance of rivals. At some point, it has to catch up or even pass the pack in terms of overall momentum, and that means showing that consumers are really embracing the phone, but it’s difficult to tell if that’s actually happening.

Microsoft does seem to be getting good developer support, although as we’ve mentioned, some of it is paid for. IDC just announced that Windows Phone 7 has gotten to 4,000 apps in two months, putting it on a faster initial pace than Android. Microsoft said it has 18,000 developers in total building apps for its marketplace, and a Millennial Ad survey of publishers said Windows Phone 7 was the second most popular new platform they expected to support in 2011.

If Microsoft can’t push sales up substantially over time, however, that early developer support likely won’t continue. Developers are still guided by numbers, and if there isn’t a market for selling a lot of Windows Phone 7 apps, they’ll hold off for when sales warrant their time. Putting out the number of devices shipped to operators and retailers doesn’t really instill the same kind of confidence that end-user sales or activation numbers would. Until Microsoft can do that and show some real adoption momentum, the future of Windows Phone 7 will remain a question mark.

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  1. One additional card Microsoft has to play is the leverage from XBOX and Windows. The same developer tools can work for all platforms (although we’re still waiting for Silverlight for XBOX). If they deploy the same app store on all screens then those developers will be churning out WP7 apps with minimal additional effort.

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  2. And people wonder why MS did not release numbers early – no matter what, it would be negatively spun by the anti-MS blogosphere.

    The blog here makes little sense – we dont know the real numbers, but apparently the carriers are buying items that they expect to sell, even though it is a flop.

    That is right, the true genius of American capitalism is that retailers spend money to stock items no one wants to buy.

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    1. Actually they do if they are paid to do so or they are consigned. You think space is free? And when that still doesn’t turn out to be good enough they start offering 2 for 1’s to unload them.

      MS claimed they had sold 10 million 360’s by xmas 2006. What they actually had done was stuffed the retail channel with millions of extra units to make it look like it was selling. Reality was 6.5 million units sold thru. It took them to spring of 2007 to actually sell thru 10 million. But spinning it to the media to get the story out for xmas was more important. Who cares about the reality. Not the American media now largely owned and controlled by those same corporations.

      They also said the 360 was reliable. And all the gaming sites that were having all theirs systems fail kept quiet to get free replacements. We all know how that bit of spin and denial eventually turned out. After millions had been duped.

      2 for 1 Win 7 handsets already. Deal with it.

      And yeah. EDD is profitable. Not Xbox. That’s what happens when you add the two monopolies of Windows and Office retail sales to the division. So you can cover up the continuing losses of Xbox.

      But the truth will eventually come out just like it did for the RROD and Kin.

      It’s called reality.

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      1. Who cares about EDD is profitable or even Microsoft is profitable. What matters is whether the phone will give what it intended to do. Being an iPhone user and a recent WP7 phone user , I am pretty sure this one Microsoft had done it well. Fanboys like it or not or say if its profitable for the company I am least concerned about. Its good if they are least profitable, so that it will come more cheaper to me.

        And by the way, I dont buy the argument that MS alone is charging money for all services or say MS is doing without profit. All corporations are run for profit and all corporations discount products either because it had some forward looking ramifications on their balance sheets. But as a normal user who cares about all these.

        One think I can say beyond doubt, out of the all platforms in the market which i experiemented for a week or two. It turns out that WP7 is the one which is a value buy. No doubt about that. If you say otherwise I will treat you a fanboy, since its that clear now !!!

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      2. Thanks for proving that MS strategy is correct. Xbox 360 is outselling Wii and Playstation for past 6 months straight. Kinect is a sales blockbuster, and Xbox Live has 25 million members and growing.
        Windows Phone 7 can chart a similiar growth path.

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      3. “Who cares .. profitable or even .. is profitable. ”

        Might want to ask Kin users that question.

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  3. VinagerVanderbolt Tuesday, December 21, 2010

    What real number ? Even if they had sold only 1 million of that , its a blockbuster in this market. Yeah true that they had not sold a million on day one, but I hear that they are selling much more than Android or iPhone on a regular business day, and it matters in the long run.

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  4. MSFT for sure knows actual numbers – it can look up how many Windows Live ID is using WP7 phones (as it is required). So why it is giving channel numbers? Is it to make sure people know that they are selling well (before market perception settles in on so-so sales)

    Frankly when somebody dangles $1B marketing budget, operators around the world will jump and order phones. Let’s wait to see numbers in MSFT’s Q2 earning reports. I hope they do better as competition will benefit everybody.

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  5. BTW, a live account is not required. It can be skipped when setting up the phone.

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  6. Disclaimer: I work for MSFT, not with the phone, etc., blah blah blah.

    It’s striking how the blogging “press” manages to find a negative angle when it comes to this product. I’m OK with editorializing a little, but I’ve grown to expect GigaOM to be a little deeper and analytical. This is not that.

    Yes, WP7 is “behind three years,” but so what? Folks in the tech bubble just can’t seem to remember that the smart phone market is still quite young and has a long, long way to go before we can consider it mature. The market is far from saturated. I seem to recall all of these predictions of failure for Android as well, and we know how that went.

    Even if 66% of those sales to carriers were actual customer sales (given the reluctance of any retailer to hold inventory, I would doubt that), isn’t a million a pretty good start? I can say with certainty, the more people get these phones in front of them, the more enamored they’ll be with them. Even my wife doesn’t miss her iPhone, and if you knew her, that would shock you!

    As for the developer front, I’m working on my second app now, and the ad revenue even from the act of developing it has been promising. Even mediocre downloads once in production will likely buy me a lot of extra burritos and MP3’s. Not bad for something I’m doing in my spare time. Trust me, the demand is there.

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  7. [...] most used consumer features only, for example. Or Microsoft’s new Windows Phone 7 platform, which the company says has created 1.5 million device sales to carriers, could be extended with new features and be slated for tablet devices. I find that unlikely and [...]

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  8. The fact that Microsoft still refuses to release its consumer sales figures for Windows Phone 7 confirms that those numbers are too embarrassing to be known.

    Microsoft could have easily have fudged the numbers of units shipped to retailers. Microsoft and AT&T could easily have done a little deal to inflate the figures.

    In fact, some months ago, AT&T boasted that it would order 8 million Windows Phone 7 handsets. Who knows where all those handsets went.

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