Windows 10 Mobile availability postponed to 2016
Previously in this series, we discussed Microsoft’s (MSFT) attempts to grab a significant share in the smartphone space. Rather than increasing its market share in the smartphone space, Microsoft saw its market share shrink in 2015. In contrast, in 3Q15, Apple’s (AAPL) iOS continued to show strong performance in the smartphone OS (operating system) space. Its unit shipments grew by 21%, which was above market average. Google’s (GOOG) Android also experienced an increase in its market share, by 1.4% on a YoY (year-over-year) basis, due to strong global smartphone sales from Samsung (SSNLF) and Huawei.
In the United States, Microsoft’s Windows 10 Mobile has already launched via the Lumia 950 and Lumia 950 XL smartphones. Windows 10 Mobile, which was expected to roll out in December 2015, will now be available in 2016. During Mobile World Congress in March 2015, Microsoft stated that devices currently running Windows Phone 8.1 will be upgradable to Windows 10 Mobile.
Windows 10 Mobile unlikely to improve Microsoft’s position
In its recent report in December 2015, IDC Research stated that despite the release of Microsoft’s Windows 10 software, the company’s share in the smartphone market is likely to remain largely unchanged from now until 2019.
In 2015, IDC Research expected the ASP (average selling price) of Windows phones to be $148, whereas Android phones’ ASP was expected to be $219. The decline in Windows phones’ ASP is due to Microsoft’s push to enter the low-end mass market.
Though the fall in Windows phones’ ASP has led to increased shipments, it is expected that it will lead to a -10.2% YoY (year-over-year) decline in 2015, as the above chart shows. This trend is likely to continue in 2016. IDC Research is of the opinion that Windows phones’ weak results are due to the lack of OEM (original equipment manufacturer) support.
You could consider investing in the PowerShares QQQ Trust, Series 1 ETF (QQQ) to gain exposure to Microsoft, which makes up 8.4% of QQQ. Investors who would like application software exposure could also consider this ETF, as application software makes up ~28.4% of QQQ.