Windows 10 Won’t Reach Billion Devices Benchmark In 2018 Due To Failing Phone Business

When Microsoft launched Windows 10 globally around this time last year, it had high aspirations for the operating system. Microsoft was counting on swift adoption from consumers and businesses on the PC side and brisk sales of Windows 10 Mobile devices to allow the company to reach over one billion installs by the end of 2018.

Windows 10 sprinted out of the starting gate, racking up 75 million installs within the first month of availability. By September 2015, that number climbed to 100 million installs. By the end of 2015, the Windows 10 install base was around 200 million and reached 270 million by the end of March. As of July 15th, 2016, the tally stood at over 350 million.

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While those numbers are definitely impressive, they don’t appear to be enough for Microsoft to reach its originally stated goal of a billion installs within 2 to 3 years (from launch). In a statement to ZDNet, Microsoft’s Yusuf Mehdi confirmed this disappointing news:

Windows 10 is off to the hottest start in history with over 350 million monthly active devices, with record customer satisfaction and engagement. We're pleased with our progress to date, but due to the focusing of our phone hardware business, it will take longer than FY18 for us to reach our goal of 1 billion monthly active devices. In the year ahead, we are excited about usage growth coming from commercial deployments and new devices - and increasing customer delight with Windows.

So there you have it, Microsoft will come up short due to its most visible (and money draining) hardware failure in recent years: smartphones. Microsoft bought Nokia’s Devices and Services division in 2014 in a bid to improve its fortunes in the red hot smartphone market. But Microsoft has been forced to lay off many of the Nokia employees that it absorbed, committed to a $7.6 billion write-down in costs associated with the acquisition and has seen its worldwide smartphone market share fall to below one percent according to Gartner.

Granted, Windows 10 will no doubt eventually hit one billion active installs, but it won’t happen in 2018 and it won’t have Windows Phone devices to thank for reaching that goal.