Windows Phone: More Than 2 Million Units Sold

This week, Microsoft revealed that it has sold more than 2 million units of its Windows Phone 7 OS to hardware makers—a significant increase over the 1.5 million figure that the company supplied December 21. This figure represents sales through the end of 2010 and doesn't include sales from this month.

Although the 2 million figure is solid enough, it pales in comparison with the market leaders. Google claims that it's  activating more than 300,000 Android devices every day, and Apple activated 180,000 iPhones every day in the fourth quarter of 2010, based on its reported quarter sales figures. If Microsoft sold 2 million Windows Phone OS units to its partners in the last quarter, the daily activation figure works out to just north of 22,000 units per day.

Of course, as critics are quick to point out, Microsoft measures sales a bit differently than its competitors do. That is, Microsoft counts sales when they're made, to its hardware partners. What Apple and Google are counting is activations, which represent sales to consumers.

Windows Phone Senior Product Manager Greg Sullivan explained to the press this week that there's a reason for this: Microsoft's hardware and wireless partners have "no contractual obligation" to supply the software giant with actual sales figures to individuals (or "activations"). But as I explained previously, Microsoft's method of reporting sales is still accurate and appropriate, since this is the point where Microsoft does register a sale of its OS anyway. But Sullivan added, "We have a high degree of confidence in the precision of the sell-in numbers, which is why that's what we're providing." In other words, Microsoft is providing a number that it knows is very accurate, and it does represent how well Windows Phone is doing in the market.

OK, so Windows Phone is hardly keeping pace with the market leaders, but then it's a new, untested platform. With this mind, Microsoft is trying to focus on some other, more positive numbers.

"Sales are an important measure of success, but for a new platform, customer satisfaction and active developer investment can be even more important leading indicators of long-term success," a Microsoft statement reads. And to that end, the software giant reports that an astonishing 93 percent of early customers are "satisfied" or "very satisfied" with their new Windows Phones. The company made a similar claim a few weeks back at the 2011 Consumer Electronics Show (CES).

Microsoft has other decent numbers to report. There are now more than 6,500 apps in Windows Phone Marketplace, up from 5,000 announced at CES. And there are now more than 24,000 registered developers in the Windows Phone developer program, up from 20,000 at CES. These, too, are significant achievements and point to some interesting growth.

Unfortunately, Microsoft still seems to be hemming and hawing when it comes to that magical first software update for Windows Phone, and my sources tell me that wireless carriers have indeed lowered the boom and slowed progress on getting it released. At an October 2010 event, representatives from Microsoft (and AT&T) assured reviewers that this would never happen.

The history of this update is somewhat shameful, and gets worse as more time ticks by. At its launch in late October 2010, Microsoft told me privately that a software update would ship concurrently or nearly so with Windows Phone 7. And the day after the US launch event, Microsoft Corporate VP Joe Belfiore told reviewers the update would happen "very, very soon." The real backtracking began at CES, however, when Microsoft CEO Steve Ballmer said that the first two Windows Phone updates would happen "over the next few months." And this week, Sullivan reiterated that latter pledge, noting that the first update would appear within "the next few months."

As I wrote in a recent commentary, however, Windows Phone is a wonderful but incomplete platform that requires a steady stream of updates, especially in its first year in the market. But Microsoft has a long way to go to match the speed at which Apple updated its first iPhone—also incomplete at launch—during a similar time span in mid-to-late 2007. That is, Apple shipped several important updates in just a few months, compared with Microsoft, which has made a lot of promises but shipped nothing after three months in the market.

So, although the update schedule is murky, Microsoft does plan at least two minor updates to Windows Phone 7 in 2011, including one that will add copy-and-paste functionality and better app performance, and one that will enable compatibility with the CDMA networks used by Verizon and Sprint. And later in the year, the company will issue a major Windows Phone 7 update, code-named Mango.

Yep, I'm a broken record. These updates can't happen quickly enough.

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