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Is Windows Phone Nearing An Inflection Point?

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Image via CrunchBase

Microsoft launched its Windows Phone more than a year ago but has failed to gain traction and remains in the giant shadows of Apple's iOS and Google's Android, which dominate the market.

However, there have been some encouraging signs of late that could signal that the future looks brighter for the tech giant. It has device partnerships with some of the top smartphone makers like Nokia, Samsung, HTC and LG, and even manufacturers like ZTE, which specialize in lower cost devices targeting toward emerging markets like China. We believe these partnerships could help the company make more inroads into the smartphone market in the coming years.

Windows Phone Still Adds Little to Firm

It recently launched Windows Phone Tango with which it plans to target the budget smartphone market to quickly grab market share from Android and iOS. It also made its official entry into China last week and hopes to beat Apple in terms of sales in the next couple of years.

The company also plans to continue to target the high end smartphone segment with premium smartphones by Samsung, HTC and Nokia, and it will release Windows Phone Apollo specifically for that segment later this year.

On the developer front, it has made significant progress in the last two months. The total app count in the Windows Phone Marketplace is now 70,000, up from 50,000 in December 2011. [1] Though it’s still just a fraction of the total apps in Apple’s iOS App Store or Google’s Android Market, the collection of apps is still large enough to attract customers.

Though capturing more global smartphone market share may give Microsoft some bragging rights, we do not expect it to have any significant impact on its overall value in the near term, which is still derived primarily from Windows and Office. We expect the pending launch of Windows 8 to be the main focus for the company this year.

Windows Phone, Xbox, Kinect and other devices account for less than 4% of our total $38 Trefis price estimate for Microsoft.

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Notes:

  1. Windows Phone Stats, WP7AppList []

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