Windows Phone Edging BlackBerry for Third Place

Nokia’s Lumia line is driving Windows Phone shipments for the time being.

Google Android and Apple’s iOS have the mobile-device world locked in a virtual duopoly, leaving the other OS developers to fight over the remaining few points of market-share.

For a long time, the conventional wisdom was that BlackBerry, despite its strategic missteps and increasingly outdated products, would be able to hold the third-place position. After all, the company had a next-generation smartphone OS—BlackBerry 10—in the works, as well as millions of loyal customers who refused to give up their Bold for an iPhone or Android device.

But now it’s looking as if the other contender for third place, Microsoft’s Windows Phone, could be pulling ahead. Nokia sold 7.4 million Lumia smartphones in the second quarter, placing it just ahead of BlackBerry, which managed to ship 6.8 million units in its most recent quarter.

Nokia has made what could only be called an existential bet on Windows Phone—if customers fail to embrace the platform in sufficient numbers, it could spell doom for the Finnish firm. When he took Nokia’s reins in 2011, CEO (and former Microsoft executive) Stephen Elop made the drastic decision to abandon the company’s homegrown and widely used operating systems, including Symbian, in favor of the Microsoft offering; at the time, he suggested that Windows Phone could help Nokia’s phones stand out in ways that Android, used by so many other manufacturers, could not.

For some time after that radical shift, it looked as if Nokia had placed its bets on the wrong horse: sales of Nokia devices running Windows Phone spiked briefly, to 4 million units in the second quarter of 2012, before nose-diving to 2.9 million units in the third quarter of that year. Meanwhile, Apple and the various Android manufacturers continued to sell tens of millions of units. But Lumia sales started to pick up again, and it’s beginning to look as if Nokia has a stable seller on its hands. (In turn, that could persuade other manufacturers to commit more strongly to Windows Phone.)

BlackBerry (formerly Research In Motion) made a similar all-or-nothing bet on BlackBerry 10, a next-generation OS version meant to place the longtime smartphone franchise on the same technological level as Android and iOS.  But shipments of 6.8 million BlackBerry smartphones for the most recent quarter—not all of them BlackBerry 10—came in below analysts’ expectations. BlackBerry currently has two top-quality “hero” devices on the market (the Z10 and Q10) and plans to release a selection of cheaper devices aimed at the midrange global market, but it’s running out of time: this isn’t a market that tolerates middling performances for too long.

BlackBerry could see its sales uptick in future quarters, of course, just as Nokia did. But for the moment, if the current trends continue, BlackBerry is at risk of losing its shot at third place in the mobile-device market.

 

Image: Microsoft

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