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Nokia Dominates Windows Phone, but Still, the Bar Is Set Very Low


The company's smartphones account for 85% of the Windows Phone market... but it's a small market.

According to an August 14 report from AdDuplex, Nokia (NYSE:NOK) phones make up an impressive 85% of the Windows Phone market in the US. AdDuplex is a cross-promotion network targeted at Windows 8 and Windows Phone apps.

Granted, the platform makes up 4% of the US smartphone market, as London-based market research firm Kantar reported on July 29. This small figure is high enough to give Microsoft's (NASDAQ:MSFT) Windows Phone a solid third place in the US smartphone market, demonstrating the dominance of Google's (NASDAQ:GOOG) Android operating system, which leads with 51.5% of the market share, and Apple's (NASDAQ:AAPL) iOS, which claims 42.5% of the market share.

Leading Nokia's Windows Phone dominance is the Lumia 520, claiming a full 18% of the Windows Phone market share. The company has eight other phones that each take a higher market share than the next competitor, the HTC (TPE:2498) 8X, which managed to steal 4% of the market. The AdDuplex report does not include numbers for the newly release Lumia 1020, which has been rumored to be off to a slow start sales wise, despite critical accolades.

Richard Windsor, a former global technology analyst at Nomura Securities and the founder of the mobile handset and software commentary blog Radio Free Mobile, expects Nokia's dominance of the Windows Phone ecosystem to continue to grow, arguing that the company offers the best hardware for the price in the space, and that its apps are the best for the platform. He also says that Nokia boasts the widest range of devices at various price points, and says, "The other manufacturers don't seem to care and are just keeping a toe in the water of Windows Phone to offset IPR (intellectual property rights) risk from the Android patents that Microsoft holds." (Microsoft holds patents for some of the essential elements that make up the Android OS, and Android phone-producing companies, like HTC and Samsung (OTCMKTS:SSNLF) have to pay rights on those elements. Microsoft offsets those rights payments if the Android-producing companies also produce Windows Phones. Nokia is immune from this.)

On the other hand, Windsor also recognizes a major problem that Nokia faces: The Windows Phone ecosystem is largely unknown to a vast majority of the smartphone-buying market. Nokia and Windows must work together to fully bring their devices and operating system to the mass market.

But as it is, if you want a Windows Phone, Nokia is almost your only option. And as Windsor wrote on his blog, "The good news is that the bar is set very low."

Follow me on Twitter: @JoshWolonick and @Minyanville
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