03/28/2013 03:39 pm ET Updated Mar 29, 2013

Windows Phone Beating iPhone In 7 Countries: What That Means For Microsoft And Apple

How do you say "smash success" in Ukrainian?

According to a new report from the research firm IDC -- as shared by Microsoft's Frank Shaw in a recent blog post -- Windows Phone has topped BlackBerry in 26 markets and the iPhone in seven. Shaw didn't divulge those seven mysterious markets in his blog post, but when The New York Times contacted IDC, an analyst named Kevin Restivo shared their identity.

And the countries where Windows Phone has topped the iPhone are -- drumroll, please --

  1. Argentina!
  2. India!
  3. Poland!
  4. Russia!
  5. South Africa!
  6. Ukraine!
  7. A market IDC identifies as "the rest of Central and Eastern Europe," which includes Croatia!

None of these markets, obviously, bring in the sales numbers of the United States or China; indeed, three of them, the Times notes, meant less than 100,000 handset shipments for Microsoft. And, also, we're talking about shipments and not sales, meaning that Microsoft is bragging about how many devices it sent to retailers, and not how many phones it had actually sold to end users.

Still, though, topping the iPhone anywhere represents a small victory for Windows Phone, Microsoft's late-to-market mobile operating system which really only debuted in its current form about three years ago. Since then, the story behind Windows Phone has been that it has struggled to gain market share from industry leaders iOS and Android, despite huge advertising spending campaigns; enthusiastic reviews from tech critics and journalists and a partnership with what was the world's largest mobile phone maker, Nokia.

And yet even with all that firepower, Windows Phone has languished in the single percentage points for market share, both worldwide and in the United States, failing to catch on with a broader populace in any meaningful way.

So while winning Poland might not seem like anything to brag about (especially for a mega-corporation like Microsoft)), Microsoft and its Windows Phone division will surely accept and blast out any kind of victory, no matter how minor it might appear. If all those Jessica Alba and Cam Newton and Gwen Stefani Windows Phone advertisements start paying off in America, there is no doubt that Microsoft will be sharing those accomplishments as well.

Apple, meanwhile, probably isn't shaking in its figurative boots over this news. These markets are small and business is quite robust elsewhere.

There is some reason to pause, however: Apple's failure to infiltrate markets like India (where it is apparently losing to Windows Phone) speaks to a wider issue facing the iPhone in emerging economies. In countries like China and India, carriers do not subsidize the cost of the phone for the customer like they do in the United States, which means that shoppers are paying full price for the phone upfront. In other words, a new iPhone 5 costs something like $700 instead of $200, which has proven prohibitive for many Indian and Chinese shoppers and has, at least in part, prevented Apple from gaining a foothold in those markets.

A budget iPhone -- or iPhone nano, or iPhone mini, whatever you want to call it -- is Apple's long-rumored solution to that problem, an iPhone that is cheaper to make and that would cost less upfront money. Apple has once again been predicted to release a budget iPhone in summer 2013, thereby attacking Android's dominance in China (and in all seven of the countries listed above). If the appeal of the iPhone is so weak in those countries that it is getting defeated by Windows Phone, then Apple will need a different approach to secure any kind of momentum there.

And so we will wait to see if Apple does indeed out an iPhone nano this year, or if it is happy to surrender those emerging markets to Google and Microsoft in return for continued appeal in the West. In the meantime, grab a plate of varenyky and wash it down with a nice glass of Slavutich, Microsoft execs: You are winning over customers in the Ukraine. All you have to do now is win over the rest of the world.

CORRECTION: An earlier version of this article stated that Vince Young had appeared in commercials for Windows Phone. He has not. Cam Newton, however, has appeared in Windows Phone advertisements.



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