Only 7.9 percent of smart phones sold last quarter were equipped with Windows Mobile, down from 11.1 percent during the same period last year. According to the report, 3.2 million devices were Windows Mobile-based, compared with 4 million last year.
Microsoft's share is eroding as Apple's iPhone continues to grow. The iPhone accounted for 17.1 percent with more than 7 million shipped during the quarter, compared with a 12.9 percent share based on 4.7 million shipped last year.
It appears Windows Mobile is also falling short at the expense of Google's Android platform, which had no market share last year but accounted for 3.5 percent last quarter based on 1.4 million shipped in the third quarter.
"Android has shown a lot of potential in the consumer space and that is where Microsoft has been struggling the most," said Gartner research director for mobile devices Carolina Milanesi, in an email.
Early indications suggest that momentum for Android will continue, with the recent release of the Motorola Droid, the first smart phone based on Android 2. A number of handset vendors once committed to Windows Mobile have started adding Android phones to the mix of their offerings, including Motorola, HTC, LG Electronics and Samsung.
Google's Android offers more favorable license fees than Windows Mobile, as does Nokia's Symbian, which also is moving to an open source model, Milanesi noted. "This leave Microsoft at a cost disadvantage," she said.
Also gaining a healthy jump in share was Research in Motion, maker of the BlackBerry, which shipped 20.8 percent of smart phones, compared with 15.9 percent. Some 8.7 million BlackBerries shipped in the quarter, up from 5.8 million last year.
Microsoft's share decline should stabilize as more smart phones based on the company's newest OS upgrade, Windows Mobile 6.5 hit the market, Milanesi said. The first phones were released in September.
But Microsoft's prospects for seeing its share improve won't become more clear until its next-generation mobile OS ships, she noted. Dubbed Windows Mobile 7, Microsoft chief software architect Ray Ozzie today indicated the company will start to offer more details on Windows Mobile 7 next spring. Ozzie made his remarks about Windows Mobile 7 in passing during his opening keynote address at Microsoft's Professional Developers Conference 2009 (PDC 2009) in Los Angeles.
Microsoft isn't the only mobile player to have lost share. Symbian, which accounted for 49.7 percent of all smart phones shipped worldwide saw its share drop, though at a still respectable 44.6 percent with 18.3 million units shipped.
In a positive development for Windows Mobile users, Microsoft's Windows Marketplace for Mobile is now available to users on phones running Windows Mobile 6.0 and 6.1 as promised. Since its release, the marketplace was only available for those with Windows Mobile 6.5-based phones.
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