Microsoft launched Windows Phone more than a year ago but has failed to gain any significant traction yet while Apple‘s iOS and Google‘s Android continue to dominate this market. After a slow start, the Windows Phone saw its market share rise in October 2011 with the backing of Nokia, one of the largest smartphone makers in the world, which launched a series of Lumia devices powered by Windows phone.
Microsoft’s U.S. smartphone market share reached around 5.4% in October 2011, but then declined to 4.4% in January 2012, as Apple hit launched its popular iPhone 4S and Google’s Android devices continued to make inroads. 
Microsoft’s smartphone market share is currently composed of two parts – Windows Mobile, its older OS which it has discontinued, and Windows Phone, which it is currently backing. While Windows phone continues to grow gradually, the dip in Windows Mobile device sales is dragging down Microsoft’s overall market share.
However, with the launch of new budget devices powered by Windows Phone Tango, we expect it to gain more market share in the coming years despite Microsoft being late to the smartphone party. Eventually, we expect Windows Phone to account for a larger portion of the market, but the chances of it overtaking iOS or Android seem quite remote.
Windows Phone, Xbox, Kinect and other entertainment devices account for nearly 6% of Microsoft’s $38 Trefis price estimate, which stands around 15% above its market price. Its overall impact on Microsoft’s overall value is only marginal.
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