HOT TOPICS: Customer Experience Marketing Automation Social Business SharePoint 2013 Document Management Big Data Mobile DAM

Nokia's Smartphone Sales, the Good, the Bad and the Ugly

lumia900.jpg Nokia has announced its first quarterly sales since the launch of the Lumia 900, and there are mixed messages coming from many quarters. What does this do to Microsoft's chances of re-entering the smartphone race and Nokia's tenuous position in the market?

First, the Good News

Nokia has now sold over two million Lumia Windows Phones, which is a decent effort with what is effectively a new entrant in a massively competitive market. Nokia is also seeing stocks of the Lumia 900 selling out at the likes of AT&T, which at least means people are interested, even if Nokia can't keep up with demand.

UPDATE: Verizon has discussed that it may support Windows Phone in the near future, during its own quarterly figures call. Big hints were dropped including that it "fully supports Microsoft", and Verizon wants to see a third player in the smartphone market came from from company CFO Fran Shammo. That suggests a formal announcement in the near future, perhaps before the arrival of Windows Phone 8.

FURTHER UPDATE: Stores in the U.K. are saying that the arrival of the Lumia 900 is being delayed by a couple of weeks due to growing demand in the U.S. That has to be positive in the short term but could see those U.K. sales hit by the arrival of Samsung Galaxy S3 which will be unveiled in early May.

Nokia is also looking at more launches in other territories (including China) to bolster its offering and has the Windows Phone 8 "Apollo" to look forward to, plus sales of Windows 8 tablets, which should create another wave of interest, now that the initial media raving over the Lumia is dying down. With revenue of US$ 9 billion, Nokia is still a major player, but that is down some 30% on last year's figure as it changes tack.

The Cost of That Good News

The bad news in the figures is the overall loss of US$ 1.7 billion, largely due to the cost of the company restructuring to focus on Lumia and Windows Phone. Of course, it is being funded to some extent by Microsoft, but Nokia needs to turn the ship around quickly before things become unsustainable, despite its current US$ 6 billion in the bank.

And, just to put those two million sales into perspective, Verizon has just announced that it sold 3.2 million iPhones in the last quarter alone, and that's after the iPhone 4S hype has died way down, as iPhone 5 and Samsung Galaxy S3 rumors take off.

There are also suggestions that the Lumia phones aren't being well received in some countries. To compound this, the company's Head of Sales, Colin Giles, has just stepped down, which suggests Nokia needs to liven up its sales operations.

And the Ugly

An ugly truth actually — despite the launch of mid-market phones and a high-end device, Nokia still seems to be way down on mindshare with phone buyers. Anyone doing a quick specification scan will see single-core Lumias against dual- and quad-core Androids (even though the Lumia is highly efficient and smooth with its processor).

Then there's the lack of apps in Microsoft's store, which is being addressed, but only slowly and with few unique apps. There is also the impending confusion of whether Microsoft's next Windows Phone operating system, Windows Phone 8 "Apollo," will work with older Windows Phones. Until this is cleared up, users could start to steer clear of Lumia and other Windows Phones, denting the device's market share.

Fighting the Future

There is clearly a lot of positivity with Windows Phone and Lumia — a stylish, good performing, effective 4G LTE product with a distinct OS. If Windows 8 helps turn a generation of users into ones who want to use tiles, then it could experience a stunning rise.

But, if those questions aren't answered, if Nokia can't compete in the power stakes, then we could have another RIM on our hands where customers just turn away, especially in the consumer space, leaving Nokia's place in the market under threat and Microsoft's investment looking a rather forlorn one. 

 
 
 
Useful article?
  Email It      

Tags: , , , , , , , , , , ,
 
 

Resources

 

Featured Events  View All Events | Add Your Event | feed Events RSS