Windows Phone sales have been consistently increasing year-over-year each quarter for the last year, but new figures show that growth has significantly stalled recently. IDC reports that Windows Phone sales dropped by 9.4 percent in Q2 2014 compared to the same period last year. That’s a big set back for Microsoft’s Windows Phone efforts, just months after the company acquired Nokia’s phone making business. Overall, it means Windows Phone accounts for just 2.5 percent market share in the recent quarter. Compare that to the nearly 85 percent for Android and nearly 12 percent for iOS, and it's clear to see the challenge Microsoft faces.

The decline in sales is hardly surprising given the small number of Windows Phone handset launches in 2014, and a lack of support from phone makers like HTC and Samsung. Microsoft revealed its Lumia sales stood at 5.8 million in the recent quarter (a 21 percent drop year-over-year), accounting for only two months due to the Nokia acquisition. Microsoft is betting on Windows Phone 8.1 to help convince phone makers to build smartphones running its software, and HTC appears to be back on board with a Windows version of its HTC One M8 handset expected next week. Any further growth for Windows Phone will come from low-cost handsets like the Lumia 630 and the recently announced Lumia 530.

Windows Phone growth is not going to be easy

Microsoft is expected to unveil two new low- and mid-range handsets on September 4th: the Lumia 730 and Lumia 830. These handsets could help regain Windows Phone growth alongside the Lumia 530 and 630, but there's big competition from Android now. Google is aiming squarely at the low-end with its new Android One initiative, an area where Microsoft has seen most of Windows Phone's growth. Handsets like the Moto G and Moto E also provide solid alternatives to Windows Phone.

Elsewhere, Android continues to grow with an increase in market share of 33.3 percent year-over-year thanks to 255 million shipments in the latest quarter. BlackBerry has been hit hardest, with a massive 78 percent drop in shipments year-over-year, from 6.7 million to just 1.5 million. Apple’s iPhone sales were up nearly 13 percent as the world patiently awaits the rumored iPhone 6 announcement.