Consumer Electronics

Microsoft Launches Most Affordable Smartphone

Douglas A. McIntyre

Published: December 8, 2015 6:36 am

Last Updated: January 13, 2020 4:21 pm

Microsoft Corp. (NASDAQ: MSFT) has released its “most affordable 4G LTE smartphone running Windows 10,” dubbed to the Lumia 550. The phone will sell for $139 in some markets. In a market in which smartphones are offered for free by some carriers that marry them with subscription plans, “affordable” is in the eye of the beholder.

Microsoft management said:

Sales of the new Microsoft Lumia 550, which offers the best of Microsoft to people who value affordability and uncompromised quality, begin today in Europe. Other regions around the globe will follow in the coming weeks.

From the moment you turn on the Lumia 550 smartphone, you’ll experience Windows 10, signature Microsoft apps and services such as Microsoft Office (Word, Excel, PowerPoint), Cortana, OneDrive, Outlook Mail and Outlook Calendar, and Skype on a premium 4.7” HD display. The familiar and consistent Windows 10 experience now extends from the PC and tablet to the phone.

Microsoft releases the smartphone into a market in which it has a 2.2% market share, according to research firm IDC. That share is expected to be 2.3% in 2019, according to the same source. Over the same period, the market share of Alphabet Inc.’s (NASDAQ: GOOGL) Google Android OS is expected to rise from 81.2% to 82.6%

IDC researcher commented further:

Despite all the effort Microsoft has put into the launch of Windows 10, IDC does not expect Microsoft’s share of the smartphone OS market to grow much over the coming years. In 2015, IDC expects the average selling price (ASP) of Windows Phones to be $148, which is $71 lower than Android’s ASP of $219. This was brought about by the Microsoft/Nokia push into the low-end mass market. While this approach helped drive shipments up to 34.9 million units in 2014, IDC is forecasting a year-over-year decline of -10.2% in 2015, followed by further decline in 2016. The weak results can largely be attributed to the lack of OEM partner support.

New Lumia products will not solve this problem.