Can Microsoft’s new efforts reverse Windows Phone’s struggles?

Two new reports put Windows Phone’s market share at just 3% worldwide, which begs the question of how much more pain Microsoft can tolerate before it finally throws in the towel in favor of Android.

I’m of the line of thought that it will never happen. New CEO Satya Nadella has proven remarkably pragmatic in his first three months on the job and is doing wonders to form partnerships, but this one, he’s not going to let go so easily, simply because Microsoft is so invested in Windows Phone.

The latest figures from Canalys say Android swallowed up 81% of the global market for the most recent quarter, iOS had 16% and Windows Phone just 3%. ABI Research came out with pretty much the same figures: Android at 81%, iOS at 16%, and Windows Phone at 3%. The only difference between the two was the number of units sold; Canalys said 274 million handsets were sold in the quarter, while ABI said 300 million.

ABI Research’s report did say Windows Phone “is currently the only viable third ecosystem,” thanks mostly to BlackBerry all but disappearing. But it also had bad news for Microsoft. Its year-over-year growth was just 16%, which is very weak for an OS with so little market share. When you are at 3%, you want 100%-200% year-over-year growth.

Second, ABI noted that feature phones with only basic calling features have lost 5% market share, and Android grabbed all of that up. So with the low end opening up for free or very cheap basic phones, Android is grabbing all of that market and WP8 is missing out.

So, what can Microsoft do? Well, not panicking is one way to start, as these numbers are trailing indicators. One of Nadella’s moves since taking over is making Windows Phone free for all makers, so that will undoubtedly have some impact. Also, the Nokia deal is now closed, and while I felt it was a mistake, it’s done, and now Microsoft has ownership of the problem.

Next, cross your fingers that this weekend’s massive global developer event will encourage more developers to make new apps for both Windows 8 and Windows Phone 8. The company is holding an event called //Publish/ starting today through Sunday in 60 cities located in 38 different countries.

Microsoft said in a blog post that //Publish/ is a bit different than the typical hackathon event in that developers can bring apps they have already begun working on. Hackathons typically mean writing an app from scratch at the show.

Microsoft engineers and team members will be on-site at the events, offering one-on-one consulting and coaching to the participants on how to finish their Windows 8 and/or Windows Phone app. The final goal is to get those developers to finish their work and have them published in the Windows Store and Windows Phone Store.

WP8 clearly needs app support, as it trails Android and iOS badly. Hopefully, there will be more of these to help build some support for the platform, because it needs it.