Lack of buzz on WP7 raises questions about sales

AT&T is 'pleased with customer response,' but offers buy-one-get-one-free deal

Windows Phone 7 (WP7) smartphones have been on sale for more than three weeks in the U.S. and seem to be producing little buzz and only so-so sales.

Definitive information is hard to come by. Microsoft, the OS maker with the most to gain with the re-invented mobile platform, has not commented on sales except to say early on that WP7 supplies were "tight."

Microsoft referred all sales inquiries to AT&T and T-Mobile USA, but neither has offered much insight. Their near-silence is seen as a bad sign by some.

There have been a few problems with the devices as well. Dell began selling the Venue Pro model on Nov. 8, and then promptly stopped sales over Wi-Fi and battery concerns. Sales haven't resumed, and Dell has not explained why. Dell also recently announced the departure of its top mobile executive .

Meanwhile, the HTC HD7 at T-Mobile is reported to have some reception problems similar to the "death grip" that affected the iPhone 4. A spokesman could not be reached to comment on the HD7 concerns or sales of the device, and the company has previously declined to comment.

In another move seen as a bad sign by some analysts, AT&T last week began offering two-for-one deals on any of the three WP7 phones it sells -- but only on models sold in its stores. "Buy one, get one free on all Windows phones [is] not a good indication that things are going well," said Jack Gold, an analyst at J. Gold Associates. "You don't give them away on special sale."

However, AT&T spokesman Mark Siegel disagreed that the offer was a bad sign and said via e-mail that AT&T "is pleased with customer response" to WP7. "It is not surprising that we would offer hot deals on our devices during the holiday season."

Shortly after making his comments on Tuesday, AT&T released a statement that it saw record-setting customer traffic for Black Friday and Cyber Monday in stores and online, but did not mention any results for any of its phone sales, including Windows Phone 7. AT&T has three WP7 models, all priced at $199: the Samsung Focus, HTC Surround and LG Quantum.

Ross Rubin, an analyst at NPD Group said he does not interpret the giveaway at AT&T as a sign of weakness. All of the carriers see a demand for alternatives to the iPhone and Android phones such as Windows Phone 7, he said.

"That said, Windows Phone 7 still lags in the app race and there isn't as broad a range of handsets available, particularly at lower price points," Rubin said via e-mail.

Rob Enderle, an analyst at Enderle Group, said the two-for-one giveaway is probably needed because WP7 doesn't have the installed base of Android, iPhone or BlackBerry. "It needs heavy marketing, heavy seeding and aggressive promotion to get enough sold so that it has critical mass," Enderle said.

But the absence of hard WP7 sales numbers from official sources troubles just about every analyst.

Data from Europe, where sales are expected to be do better than in the U.S., also indicate WP7 could be off to a slow start. A UK retailer, MobilesPlease, said WP7 online sales have accounted for just 3% of smartphone sales . The retailer added that Android phones are outselling WP7 by 15 to 1.

Anecdotal evidence in the U.S. is non-conclusive. A clerk at an AT&T store near Boston said WP7 sales have been going well, with stock replenished every few days. He said he had sold two HTC Surrounds and one Samsung Focus on Tuesday by late in the day.

That's not the kind of impact Microsoft, or the carriers, want. "There doesn't seem to be much buzz around sales figures, which I would think Microsoft would be excited to share if the numbers were good," Gold said.

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