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Although Nokia has watched its handset shipments fall in the past couple of years and its financial performance slow to a crawl, the company offered up a silver lining during an earnings call with investors on Jan. 26, saying that it sold more than 1 million Lumia handsets since the devices launched late in 2011. The news came as a surprise to those who have long viewed Microsoft’s Nokia partnership as a bad one that will only hurt Windows Phone 7.
Nokia didn’t say why it believed the Lumia line has been performing somewhat well on store shelves, and Microsoft has so far not commented on this development. But it’s notable, nonetheless. For the first time in a long time, Nokia has some good news to share with the world. And quite surprisingly, that good news is coming by way of an operating system and partnership that seemed destined for failure just a few months ago.
So, why is the Lumia line selling so well so far?
1. Nokia’s name still matters
Although consumers have been buying fewer Nokia phones, the success of the company’s Lumia line seems to indicate that its brand still matters in today’s marketplace. That might surprise folks in the United States who aren’t buying too many Nokia devices, but for mobile device users overseas, where Nokia is still wildly popular, it likely doesn’t. Lumia’s success proves Nokia is by no means a pushover.
2. Windows Phone 7 might be a winner
When Windows Phone 7 launched, many people thought that its odd, tile-based design would turn off customers. And for the first year, they were right. But now, Windows Phone 7, due mainly to Mango, is starting to be viewed as a top-of-the-line operating system that consumers and even some enterprise users want. Now Nokia is benefiting from that.
3. They appeal to the right niche
The Lumia line is by no means going to take down Apple’s iPhone or compete with the Samsung Galaxy Nexus. But that’s not Nokia’s goal. Instead, Nokia wants to be the alternative that its customers are after. Those folks typically want the colorful designs and cheap pricing found with Nokia handsets. And right now, they’re finding it with Lumia.
4. Strong sales are relative
All the gushing over Lumia should be tempered a bit with some reality: selling more than 1 million units is great, but it’s not so wonderful when compared to iPhone or Android sales. An iPhone would be considered a failure if it only had 1 million unit sales over the course of several weeks. But in the Windows Phone 7 ecosystem, that many unit sales is a giant hit. So, perhaps it’s selling so well because it’s the most common Windows Phone 7 device out there at the moment.
Offering Multiple Lumia Models Was a Smart Move
5. It’s an international play
As noted, people in the United States aren’t so keen on Nokia handsets. But that doesn’t matter to Nokia. The company has long been an internationally focused firm that likes cornering markets in South America, Asia and parts of Europe. That’s why the Lumia 710 didn’t launch in the United States first and why Nokia’s success will probably live under the radar in the coming years.
6. More devices means more sales
If Android handsets have taught mobile vendors anything, it’s that selling more products means being more successful in today’s marketplace. Nokia has a line of Lumia devices that appeal to different customer needs. That’s important. If it hadn’t offered multiple models with different features and price points, Lumia’s sales wouldn’t be nearly as strong.
7. The Microsoft involvement matters
When Google announced that it would play a hand in Android development with the “Nexus” line of products, the company proved that attaching its name to a product can work wonders for sales. It appears the same scenario has played out with Nokia’s deal. Microsoft attached its name to Nokia, made it clear it’s a key partner with the company, and now they’re both benefiting from the relationship.
8. It’s the only major show in town
Looking around the Windows Phone 7 ecosystem, there aren’t many more prominent models for consumers to see. The devices running the operating system, mainly from Samsung and HTC, are not unique and are rarely promoted. But Nokia’s devices are different, and they have quickly become the foremost Windows Phone 7-based handsets on store shelves.
9. The devices get attention
Following that, it’s important to point out that both Microsoft and Nokia are doing everything they can to get the Lumia line in front of consumers around the globe. The companies have been aggressively using public relations, advertising and promotions to attract customers to the products. So far, all that appears to be paying off.
10. The price is right
When one looks at the iPhone 4S’ $199 (and up) price tag and how well it sells, they might think that the price is the sweet spot for consumers. But considering the state of the global economy, it might not be for the vast majority of folks. Therefore, Nokia’s decision to offer the Lumia 710 for just $50 is a good one. It fits into many more budgets, especially in the developing world, but still comes with enough features to appeal to consumers. Maybe Nokia is on to something with its Lumia pricing.