Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) sales of Blackberry OS have lagged behind sales of the competing Windows Phone software offered by Microsoft Corporation (NASDAQ:MSFT). The news augments a shift in concentration from the top two spots on the smart phone food chain, onto the battle for third place.


Heading into the fourth quarter of 2012, Blackberries were still the third best selling phones in the US market. Reports of sales, looking at the last three months of 2012, showed that the company’s sales were outstripped by those of devices running Microsoft Corporation Windows Phone 8 software.

Data from the period reveals that Windows 8 Phone devices outsold Windows Phone 7 devices. That’s an interesting statistic, seeing as Microsoft have been selling Windows 7 smart phones for two full years. Windows 7 devices were never a real competitor in the smart phone market and the stat points more to the product’s ineffectiveness than the success of the company’s new platform.

The real battle did not, of course, start in the fourth quarter of last year. At that stage, Microsoft Corporation (NASDAQ:MSFT) devices were new, and Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) had yet to reveal its newest smart phones. Now that the BB10 devices are on the market, comparable sales figures will be available for the two companies.

Because BB10 devices were slated to be released in January, it is probable that many Blackberry loyalists were holding off on purchasing a new smart phone toward the end of 2012, so that they could upgrade to the company’s newest line of smart phones, rather than be stuck with old technology. This might have unnaturally suppressed the company’s sales in the quarter.

The new devices will not be offered to US consumers until March, but news from other markets suggests that sales are strong. Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) has released the smart phone models in Canada, where sales have been called strong by Research In Motion.

The opening up of a new front in the smart phone market by Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) and Microsoft Corporation brings a much needed new dynamism to the sector and may make headway into shaking up the market. For some years, smart phone movement has been dominated by patent wars, and a mentality of catching up to Apple Inc. (NASDAQ:AAPL). Now that Samsung is generally considered to have met Apple’s challenge in terms of quality and sales, the sphere is due for a change.

The second front, the battle for third place by Microsoft Corporation (NASDAQ:MSFT) and Research In Motion, will add some much needed innovation to a market that many see as having gone stale. The first real reports of success or failure in the market will come in the earnings reports of companies for the first quarter of 2012.

If Microsoft Corporation (NASDAQ:MSFT) is still outselling Blackberry models in that report, which is probable, it will not be a death knell, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) have had much less time to establish their position, and their release has been much delayed.

If Research In Motion come out ahead by some miracle, Windows Phone 8 will be sidelined in the minds of many. If Research In Motion is able to ignite its own enterprise fan base, it will severely bite into Microsoft’s ambitions. As Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) CEO Steven Elop is fond of saying, the enterprise market is a prime target for potential Windows Phone users.

There has not yet been a definitive winner in the enterprise market, with many companies switching to a “bring your own device” structure. Microsoft and Blackberry, will be looking to return to the days when they were able to sell devices en masse to massive corporations. Which, if any of them wins that battle, may decide the future of the smart phone business.