Microsoft shipped 2 million copies of Windows Phone 7

The 2 million figure represents Microsoft's firmware shipments for the most recent quarter, not unit sales of handsets running that firmware

A Microsoft executive said this week the company shipped more than 2 million copies of its revamped operating system, Windows Phone 7, in the most recent quarter. The careful admission at once triggered another spasm of misconstrued, misinterpreted, mistaken, and misanthropic speculation on the success or failure of Microsoft's smartphone platform.

The same executive, Greg Sullivan, a senior product manager at Microsoft, in a story reported by Bloomberg, cited results of Microsoft's internal surveys of customer satisfaction and brand awareness. "Customer satisfaction for the product is at 93% and brand awareness has jumped 22 points to 66% since it was released," the story reported.

The 2 million figure represents Microsoft's firmware shipments for the most recent quarter, not unit sales of handsets running that firmware. In the U.S., handsets went on sale Nov. 8. That distinction was reflected in the original Bloomberg headline: "Microsoft Shipped 2 Million Units of Windows Phone 7 Software Last Quarter."

Yet it was a distinction quickly lost in both mainstream publications running the Bloomberg story, and in a wave of Internet postings that often seemed to deliberately misunderstand it.

Businessweek's editors shortened the headline to "Microsoft Shipped 2 Million Windows Phone 7 Units" creating the impression that Microsoft itself had sold the handsets.

Redmond Pie's headline was misleading on two counts, conflating OS shipments with phone retail sales, and the time frame: "Microsoft Sold Over 2 Million Windows Phone 7 Handsets Since Launch." WinRumors: "Microsoft has now shipped 2 million Windows Phone 7 devices."

The new round of confusion mirrors that in December, when Microsoft carefully said that handset manufacturers had sold 1.5 million Windows Phone 7 handsets ... to mobile carriers. At the time, Business Insider's Dan Frommer opined that "Windows Phone 7 is toast."

Microsoft won't sell many Windows Phone handsets, he wrote "Why not? Because there simply aren't many reasons for anyone to buy a Windows Phone instead of an iPhone or an Android device."

Microsoft clearly is trying to avoid direct comparison, at least for now, with the stated retail sales figures for Google's Android and Apple's iOS devices. Bloomberg reported that Apple sold 16.2 million iPhones alone in its most recent quarter. (And the iOS platform has become the main driver of Apple's profitability, according to an analysis by Asymco's Horace Dediu. Since being introduced in the first iPhone in 2007, today "iOS powers about 70% of Apple's current gross profits," Dediu writes.)

In an e-mail, Bloomberg reporter Dina Bass confirmed that Sullivan declined to comment on how many of those OS shipments were in handsets actually being used by mobile subscribers. The story also notes he declined to forecast specific future sales.

"Sales are an important measure, but for a new platform we think customer satisfaction and active developer support are more important indicators of how sales will be over the long term," Sullivan was quoted as saying. He said the online Windows Phone marketplace has 6,500 applications, and 24,000 programmers have registered themselves as Windows Phone developers.

Microsoft will ship an OS update in the next few months, and phones will be available by June 2011 at the latest to run on the Verizon Wireless and Sprint CDMA networks.

John Cox covers wireless networking and mobile computing for Network World.


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