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8/1/2011
10:09 AM
Eric Zeman
Eric Zeman
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Windows Phone 7 Sales $613 Million At Most

During the 2011 fiscal year, Microsoft Windows Phone 7 platform revenue never added up to much.

Putting Microsoft's annual report, released last week, under the microscope shows that its burgeoning smartphone platform is not having the impact the company hoped it would.

Seattlepi.com reports that the total revenue of Microsoft's Entertainment and Devices Division was $8.716 billion. The Xbox 360 was responsible for $8.103 billion of that figure, leaving just $613 million for the revenue brought in by both Windows Phone 7, and Microsoft's older Windows Mobile 5.x/6/x platforms, which continue to sell at the enterprise level.

Keep in mind, this is for Microsoft's fiscal 2011 year, which ran from July 1, 2010 to June 30, 2011. Windows Phone 7 didn't launch until October of 2010, meaning for at least the first third of its 2011 fiscal year, all device-related revenue was coming from Windows Mobile 5.x/6.x. On top of that, the $613 million figure includes the revenue Microsoft brought in from sales of Zune devices and subscriptions, MediaRoom, and its Surface hardware.

In other words, the actual amount of revenue brought in by WP7 is likely to be well under the $613 million figure.

Microsoft has not openly admitted to how many WP7 handsets have been sold, nor how much revenue WP7 handsets have brought to the company.

This is not the first sign we've seen that WP7 sales aren't going so well.

At the end of 2010, Microsoft said it had sold 1.5 million WP7 handsets. That represents the number of devices sold by Microsoft to carriers around the world, not the number of people who actually purchased handsets from those carriers. Microsoft didn't say how many people have bought its phones. By late January, Microsoft raised that initial number to 2 million. It has been quiet since then.

Analysts and industry watchers have been attempting to calculate the number of WP7 handsets sold to actual end-users, but no solid figures have emerged.

In June, AT&T Mobility CEO Ralph de la Vega shared some interesting gems with AllThingsD about how the company looks at its competing smartphone platforms, and Windows Phone 7 in particular.

de la Vega joins other executives in bad-mouthing sales of Microsoft's smartphone platform. An LG exec earlier this year bemoaned the slow sales of WP7 smartphones. de la Vega's comments aren't all that surprising.

"We actually like that software very, very much," he said to AllThingsD. "It hasn't sold as well as Microsoft or us would want it to, but I think having the Nokia hardware capability with the Microsoft software capability is a really good combination. They have to prove it by bringing some great devices to market. But I would love to have a great Nokia device with Microsoft Windows Phone 7."

The seeds planted by Nokia and Microsoft earlier year could eventually bear the fruit for which de la Vega so much hopes. Microsoft has offered up some solid smartphone software, and Nokia makes good devices. Put the two together and, there is certainly potential.

With Windows Phone 7 Mango already released to manufacturers and slated for distribution on new phones this fall, Microsoft has another shot to get WP7 into the hands of consumers around the world.

If Mango fails to give WP7 the foothold it truly needs, what future could it possibly have?

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