About those rumored Windows Phone 7 sales numbers

It is a crazy day in the world of Windows Phone 7, with rumors concerning total handset sales bouncing off the walls in all directions.

There are two stories that are important to keep in mind. The first is a claim out that 674,000 WP7 devices have been sold, but there is contention as to if that number refers to a specific time period of the phone line’s life. The second is an industry report that claims that some two million new Windows Phone devices shipped in the first quarter of 2011.

Microsoft revealed in January that some two million WP7 phones had been sold to carriers. If another two million, or so, WP7 handsets were shipped in the first quarter of 2011, then there are roughly four million WP7 handsets out in the world. That is an important number to keep in mind.

Now, the 674,000 handsets sold number may be a reference to WP7 sales only in a specific time window. The man behind the story wrote very ambiguously, and in Russian, and the press has taken the story in a variety of ways. WinRumors read it as saying 674,000 handsets sold since launch; PhoneArena is taking it to mean just 2010 sales; BussinessInsider is reading it as saying that of the 1.5 million handsets sold to carriers by late December of 2010, only 674,000 had “sold through” to consumers.

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All told, our best guess is that the 674,000 number is in reference to the, Microsoft reported, 1.5 million WP7 handsets sold to carriers number. That figure was reported on December 21st, just before the crucial Christmas day. Sadly, that means that the 674,000 number does not include Christmas sales, only sales leading up to Christmas.

However, as Microsoft reported 2 million phones sold to carriers in late January, approximately one month after it reported 1.5 million handsets sold, we can see that Microsoft managed to sell 500,000 handsets in just a few weeks. Now, why would carriers pick up another half million WP7 handsets, fully one-third of their previous total purchase? Our guess is because WP7 had a decent Christmas.

If 674,000 WP7 handsets were sold up to the 21st of December, then there were around 826,000 WP7 handsets in consumer channels on Christmas day. Over the next thirty-days, 500,000 more handsets were purchased by carriers. Either they wanted to get back to having 1.5 million WP7 handsets in stock (unlikely), or they were replacing what was sold on, our right around, Christmas. Recall that WP7 had many promotions (including buy one get on free deals) running for Christmas.

Right, so over 800,000 phones ready for sale, then a massive purchase. Sounds like restocking to me.

Still, it is doubtful that sales for the phone platform have expanded much in terms of rate over the last few months, so if another 2 million WP7 handsets shipped in the last quarter then there should be considerable supply in the sales channels.

But this not the catastrophic scenario that people are bandying about. Windows Phone 7 is  a new platform that is taking its time, perhaps too much time, finding an audience. But that said, the phone line is well put together and should manage to retain many of its initial customers. And thus Microsoft will keep pouring money into it to help foster its growth.

This is, if you think about it, what we have always known about WP7. These new numbers are both too imprecise, and probably too old (it now being Q2 of 2011, etc) to mean much. But that didn’t stop the headlines, now did it?