Windows Phone 7 Off to a Slow Start in Fourth Quarter, as Android Smartphone Market-Share Lead Increases

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Microsoft’s Windows Phone 7 operating system (OS) debuted with 2 percent of the overall U.S. smartphone market in the fourth quarter, as Android handsets grew to encompass over half (53 percent) of all consumer smartphone sales.

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Android will encounter greater competition this year, however, as Apple's iPhone 4 -- the best-selling handset in the U.S. -- debuts on Verizon Wireless

As the first Windows Phone 7 models hit stores during the fourth quarter (Q4) of 2010, the Android smartphone operating system (OS) significantly increased its market-share lead by 9 percentage points, since the prior quarter, to reach 53 percent of the U.S. consumer smartphone market. According to The NPD Group, a leading market research company, Apple iOS share declined 4 percentage points to comprise 19 percent of unit sales in Q4; RIM OS fell 2 points to tie Apple’s 19 percent; Windows Mobile, Microsoft’s legacy OS, fell 3 points to 4 percent, as the new Windows Phone 7 OS debuted at 2 percent; and Palm’s WebOS held at 2 percent.

"With its mid-quarter launch Windows Phone 7 entered the epicenter of competition between iOS and Android at AT&T. Both competitors offer mature feature sets and large app libraries," said Ross Rubin, executive director of industry analysis for NPD. "Microsoft has made the case for Windows Phone 7's differentiation and improved integration. Now, the company must close the feature gap, offer more exclusive capabilities, work with partners to deliver hardware with better differentiation, and leverage its extensive experience in driving developer communities to increase its app offerings."

Despite buy-one-get-one promotions at both AT&T and T-Mobile, the Windows Phone 7 OS claimed less market share than its predecessor, Windows Mobile, for which handsets are still available at all four major U.S. carriers. Windows Phone 7 also entered the market with lower share than either Android or webOS at their debuts, according to NPD's Mobile Phone Track.

"At CES there were announcements from several handset providers of the intent to use the Android OS to bring new capabilities to market, including dual-core processors, 4G network speeds, and larger displays that seek to expand on the success of handsets like the Motorola Droid X and HTC EVO 4G,” Rubin said. “Android will encounter greater competition this year, however, as Apple's iPhone 4 -- the best-selling handset in the U.S. -- debuts on Verizon Wireless."

Top Five Handset Models Were All Smartphones in Q4 2010

Based on U.S. consumer purchases of mobile phones in Q4 2010, for the first time there were no feature-phone handsets in NPD’s top-five ranking. All top-selling mobile phone models were smartphones, as follows:

1.    Apple iPhone 4
2.    Motorola Droid X
3.    HTC EVO 4G
4.    Apple iPhone 3GS
5.    Motorola Droid 2

Data Note: The information in this press release is from Mobile Phone Track – NPD’s consumer tracking of U.S. consumers, aged 18 and older, who reported purchasing a mobile phone. NPD does not track corporate/enterprise mobile phone purchases.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit and Follow us on Twitter: @npdtech and @npdgroup.


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