Ever since the iPhone debuted in 2007, Microsoft has struggled to adapt to the quickly changing smartphone world--and company Chairman Bill Gates knows it. "There's a lot of things, like cellphones, where we didn't get out in the lead very early," Gates said in an interview with Charlie Rose that recently aired on CBS This Morning. "We didn't miss cellphones, but the way we went about it didn't allow us to get the leadership. So it's clearly a mistake."
Microsoft was very late to adapt to change as Apple's iPhone and handsets loaded with Google's Android mobile operating system exploded in popularity. The software giant finally got its act together in late 2010 when it released Windows Phone 7, a touch-centric, attractive looking mobile OS that replaced the decrepit Windows Mobile platform.
Despite a positive critical reception, however, Windows Phone 7 wasn't a smash hit. By early 2012, in fact, market research firm Nielsen said Windows Phone claimed fewer users than the aging Windows Mobile platform in the U.S.
There are many opinions about why Windows Phone 7 failed. Overall, however, poor carrier support, a comparatively sparse third-party app store, and Windows Phone's unique interface kept users from adopting the new smartphone lineup en masse. In September 2012, a month prior to the launch of Windows Phone 8, Microsoft handsets claimed about 3.6% of U.S. smartphone users, according to metrics firm comScore.
It's only gone downhill since then. The stats for Windows Phone are even worse today, with Microsoft handsets claiming just 2.9% of the American smartphone market as of December, based on the latest numbers from comScore.
But it's not all bad news for Windows Phone 8.
Nokia, Microsoft's largest smartphone partner, has released new low- and high-end Windows Phone devices. More phone manufacturers, including LG and Asus, may announce Windows Phone 8 devices in the coming weeks, possibly during Mobile World Congress in Barcelona, which starts next Monday. LG dumped Windows Phone last April; the company said at the time that it had no plans to release more Windows Phones, citing poor sales.