Windows Phone 7 Selling Fast In Europe, Australia

Windows Phone 7 line in Australia

Photo: Microsoft

Don’t count Microsoft out of the mobile game: Windows Phone 7 is selling better than expected in Europe and Australia.According to a report in Digitimes based on reports from Taiwanese manufacturers, stocks of HTC’s HD7 are currently gone at German carrier O2, and Australia’s Telstra is out of the HTC Mozart. Last week, U.K. carrier Orange warned its retail managers about likely shortages of the Mozart and Samsung Omnia.

Low inventory due to component shortages may be partly to blame. Even so, high early demand is good news for Microsoft’s mobile ambitions, as it tries to recapture some of the market share it’s lost over the last several years as Windows Mobile has been eclipsed by Android and the iPhone.

A Morgan Stanley report this morning insists that the smartphone market won’t be a “zero-sum game” for at least another year. In other words, rising interest in smartphones will help everybody in the market. Eventually there’s going to be a shakeout, but Microsoft and HP’s Palm–the smallest player by market share–still have time.

Morgan Stanley expects Microsoft to sell between 3.5 million and 4 million Phone 7 devices during the fourth quarter, plus another 1.5 million of the older Windows phones.

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