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Why wireless carriers in the U.S are discounting Windows Phones

Matt Hamblen | Oct. 28, 2013
Sales of Windows Phone are weak because of a shortage of apps, but carriers also need to move inventory to make room for a crush of new iPhones and other devices.

"In the U.S., Windows Phone is not selling well," Moorhead said. "While it has some unique features, Windows Phone is better known as the phone that doesn't have the right apps."

At its current 175,000 apps, the Windows Phone Store has far fewer apps than either the Android or iOS stores. According to reports, Microsoft recently confirmed it is adding pinnable Web Apps to the Windows Phone Store and has added 42 Web Apps for sites such as TMZ, Carmax and PetSmart to encourage independent software makers to publish their own native apps.

Moorhead said Windows Phone also suffers because it has been late to market with new form factors, quad-core processors and high-resolution displays. Indeed, the ATIV S Neo may have an HD display, but still has only a 1.4 GHz dual-core processor, which is relatively slow in today's market.

Buyers might be more interested in the Neo because of its 8-megapixel rear camera, 1.9-megapixel front camera and 16 GB of built-in memory that can be expanded to 64 GB with a micro SD card slot. Samsung provided ATIV beam file transfer capability in the Neo, which means it can be paired with a compatible Android device with beam capability.

Meanwhile, the Lumia 1020 with its 6x zoom, 41-megapixel camera and a 1.5 Ghz dual-core processor would seem to have the hardware features that would sell well. But again, Moorhead lamented the platform's lack of apps, resulting in less market traction.

As for why AT&T got the Neo weeks after Sprint, Moorhead had this theory: "It is likely that Samsung gave Sprint a few months head start over AT&T to be a first-mover in exchange for some preferential treatment [because] AT&T typically has all the latest phones."

Having the latest phone might not be so special if it doesn't sell, however.
The dilemma facing Windows Phone sales in the U.S. might be especially complex for Samsung. The company will holds its first developer conference in San Francisco next week, as it continues its mission to carve out a unique position separate from Android and the Google Play market. Windows Phone gives Samsung another alternative to Android, and analysts such as Milanesi believe that Samsung will want to produce a 6-in. "phablet" smartphone running on Windows Phone.

Larger smartphones, like those Nokia announced this week, are becoming more popular and Samsung already makes phablets running on Android, including the Galaxy Note 3.

"I think a 6-in. Windows Phone from Samsung makes sense as a companion device to the hybrid devices, and would be more for the enterprise side than the consumer side," Milanesi said.

Maybe Samsung can afford to see whether a Windows Phone phablet would sell well or need to be quickly discounted.


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