Nokia's Lumia 610, its Windows Phone smartphone for the lower end of the market, represents a big gamble for both the Finnish phone maker and Microsoft.
To say that Nokia has a lot riding on the freshly unveiled
Lumia 610 is something of an understatement.
Billed as the most affordable Lumia smartphone, the new
device has one goal: sell in volume. Once a considerable force in the global
smartphone arena, Nokia has seen its overall market share degraded by a flood
of inexpensive Google Android devices. In the face of that competition, Nokia
CEO Stephen Elop opted to largely abandon Symbian (and mothball MeeGo, its
other homegrown operating system) in favor of Windows Phone.
But Microsoft originally developed Windows Phone as a
high-end operating system along the lines of Apples iOS, meant for more
expensive hardware. In order to load it onto devices at the lower end of the
price spectrum, Microsoft apparently had to modify the software to support
lower memory and processor requirements.
The question now is whether a lower-end Windows Phone can
carve out a space for itself on that lower end. For Nokia, the answer will
determine whether it regains its former prominence; for Microsoft, a successful
foray into the other end of the market could eliminate doubts about its
longer-term viability in the smartphone market. In recent months, executives
from both companies have talked extensively about offering an array of Windows
Phones at a variety of price points.
The combination of Nokia, Microsoft, an aggressively
marketed mid-range Windows Phone device, and an appealing array of Nokia
developed-applications look strong on paper, Tony Cripps, an analyst with
research firm Ovum, wrote in a Feb. 27 research note. However, should the
offering fail to kick-start demand, both companies hopes for renewed relevance
in the smartphone market will be seriously dented.
New data from research firm Strategy Analytics suggests that
Nokia has become the worlds largest Windows Phone vendor, at 33 percent of the
market, surpassing the individual efforts of HTC and other manufacturers. The
company announced it had sold 1 million Windows Phone units in the fourth
quarter of 2011, surpassing some analyst expectations.
Windows Phone might occupy a tiny percentage of the
smartphone market, but Microsoft is famous for playing the long game with many
of its products. It seemed more than willing to take losses on the Xbox for
years, until the gaming platform turned profitable. Its cloud initiatives,
including Office 365, were launched with the expectation that profits are
several quartersif not yearsaway. And given the growing importance of
mobility within the tech segment as a whole, its nigh inconceivable that
Microsoft would abandon its smartphone platform, effectively ceding the space
permanently to the likes of Apple and Google.
For Nokia, though, the stakes are much higher.
Nicholas Kolakowski on Twitter