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    Home IT Management
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    Nokia Lumia 920, 820 Offer Reminder of a Tough Market: Analysts

    Written by

    Michelle Maisto
    Published September 6, 2012
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      Nokia nearly delivered what it needed to at its Sept. 6 introduction of two new Microsoft Windows Phone 8 smartphones, the Nokia Lumia 920 and 820. However, according to analysts, the phones, while very nice, may be not quite enough and not in time.

      Apple is expected to introduce an iPhone 5 Sept. 12, and in the small window of opportunity before all devices will have to operate in its shadow, it’s imperative that Apple competitors bring their top game. While the new Lumia phones are “not underwhelming,” Jefferies analysts wrote in an Aug. 6 report, they offer of reminder of just how difficult it is for any brand to win back market share today.

      “Nokia, at its best, can offer a well-engineered blend of device and platform that appeals directly to end users happy with best-in-class in a narrow range,” said the report. “This is what we got. There is still, however, a big gap here between marginal appeal (noir) and mass-market allure (blockbuster).”

      Samsung, like Apple, has proven itself adept at the blockbuster. Within 100 days of the Galaxy S III’s launch, Samsung announced Sept. 6, it sold more than 20 million of the devices. And indeed, during the first quarter, Samsung became the world’s top-selling phone maker, taking a title that Nokia had held on to for 14 years.

      Nokia’s new Lumias feature exceptional camera functionalities, wireless charging and touch-screens that are sensitive enough to also respond to fingernails and gloved hands. While great starts, said the Jefferies analysts, neither is quite enough in the current, incredibly competitive landscape.

      “Nokia needs to conjure up top-of-the-range handsets with near vital functionalities that literally wrench users away from the iPhone or Galaxy S III and tie them into the Microsoft cloud experience,” wrote lead author and equity analyst Lee Simpson.

      Canaccord Genuity analyst T. Michael Walkley, in a Sept. 5 note, said that while he was “impressed” by the new Lumias, Nokia and Microsoft have literally yet to deliver. Comments by Microsoft and Nokia, he added, suggest that the software won’t be ready for another month or two and that the phones will ship in limited quantities during the fourth quarter.

      During an evening event for media and analysts following the phones’ morning introduction, the phones weren’t made available to hold or use, further suggesting the software is indeed far from ready.

      “While we were impressed with many of the new features, we believe the Microsoft ecosystem still faces an uphill battle to win customers and create a viable long-term third mobile ecosystem after Android and Apple’s iOS,” wrote Walkley. “With limited Windows 8 sales in [the fourth quarter of 2012] combined with sharply declining Symbian sales and solid but stable feature phone sales, we anticipate large [second half of 2012] devices and services operating losses.”

      What Nokia can do from here may well be determined by the strength of its carrier partners-yet to be announced-and more specifically their in-store staffs.

      “We believe a focused launch is necessary as we believe it will take very well-trained sales people to convince consumers to try the Lumia smartphones versus the iPhone 5 and Android smartphones,” wrote Canaccord’s Walkley.

      David McQueen, an Informa Telecoms and Media principal analyst who was introduced to the phones at Nokia World in Helsinki the same day, had similar views. In a research note, he called the Lumia 920’s “impressive display” and PureView camera technology and wireless charging “stand-out features.” He also pointed to the phone’s new class of navigation and mapping services as well as an assortment of peripherals, and added that the device “is undoubtedly a desirable, impressive piece of kit.”

      However, he continued, “It is the ability to translate this message at the point of sale and prove its value proposition to the consumer that will determine the success of Nokia’s WP devices and help grow the platform.”

      Nokia plans to do this, in part, by improving its retail execution and simplifying its marketing messages, McQueen explained, such as by offering versions specifically for the enterprise.

      While for Nokia, the road ahead is a steep uphill, it’s at least the right direction to be headed in.

      “The company may have finally bottomed out in the smartphone market,” added McQueen, “and its WP8 devices look set to market the true beginnings of its climb back into the affections of the smartphone user.”

      Follow Michelle Maisto on Twitter.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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