Microsoft may need to start worrying of the future of Windows Phone

Windows Phone sales have been consistently increasing year-over-year each quarter for the last year, but new figures show that growth has significantly stalled recently. IDC reports that Windows Phone sales dropped by 9.4 percent in Q2 2014 compared to the same period last year. That’s a big set back for Microsoft’s Windows Phone efforts, just months after the company acquired Nokia’s phone making business. Overall, it means Windows Phone accounts for just 2.5 percent market share in the recent quarter. Compare that to the nearly 85 percent for Android and nearly 12 percent for iOS, and it’s clear to see the challenge Microsoft faces.

Research firm IDC released its quarterly smartphone sales data on Thursday, estimating that Android and iOS phones combined for 96.4 percent of the phones shipped last quarter. That leaves just a meager 3.3 percent of the market for Microsoft’s Windows Phones as well as handsets that run BlackBerry or some other software. Windows Phone is the clear third horse in this race but even so, it’s market share declined by nearly 10 percent in the past year. That’s a bit concerning since the smartphone market as a whole continues to grow. Unfortunately for Microsoft, it’s growing its market share slower than the overall market is expanding. Apple lost share as well — dropping to 11.7 percent share in the second quarter of this year compared to 13 percent a year ago. There’s a difference though: Apple’s sales actually increased from the year ago period while Microsoft’s fell, based on IDC’s data. So while Apple didn’t expand as quickly as the overall market it actually increased revenues; Microsoft and its hardware partners as a whole clearly didn’t. The only way these companies could have increased revenues on fewer sales would be if a greater mix of more expensive Windows Phone devices were purchased by consumers.