If the new Lumia phones do not appeal to consumers when they are unveiled this Wednesday, it could mean the end for Nokia. Picture: Getty Images
Microsoft and Nokia are loading up for their best – and possibly last – shot at denting a smartphone market dominated by Apple’s iPhone and Google’s Android mobile software.
If the new Lumia phones do not appeal to consumers when they are unveiled this week, it could mean the end for Nokia – and a serious blow to Microsoft’s attempts to regain its footing in the mobile market, say analysts and investors.
“This is very high stakes,” said Canaccord Genuity analyst Michael Walkley. “Nokia bet everything on Windows and if this doesn’t succeed the next step might be having to do what’s best for shareholders and that might include selling off key assets or selling the whole company.”
The Finnish handset maker has logged more than ¤3bn (R32bn) in operating losses in the last 18 months, forcing it to cut 10000 jobs and pursue asset sales.
Its share of the global smartphone market has plunged to less than 10% from 50% during its heyday before the iPhone was launched in 2007.
For Microsoft, a successful Lumia launch would convince more handset makers and carriers to support its latest phone software, which is based on the same code as the upcoming Windows 8 computing system, and promises faster performance and a customisable start screen. Windows phones have only captured 3.7% of the global smartphone market, according to Strategy Analytics. Android phones have 68% while Apple has 17%.
The new Lumia phones will hit the market just as the world of Android reels from a potentially crushing legal blow and as Research In Motion’s BlackBerry continues its decline.
A California jury decided last week that some of Samsung Electronics’ hot-selling Android smartphones copied features of the iPhone, which may result in import bans and drive handset makers to put more resources into making Windows-based phones.
The judgment opens a window for Microsoft to exploit – but it first needs to find favour with consumers.
“Windows Phone really is going to have to stand or fall on its own, it’s going to have to appeal to consumers,” said Jack Gold, an independent mobile analyst who runs consultancy J Gold Associates.
Nokia is expected to launch two new Lumia phones tomorrow, on the same day that phone maker Motorola, now owned by Google, also unveils a new product. It kicks off a busy fortnight for mobile devices, with Amazon.com expected to introduce new Kindle tablets on Thursday. Apple is seen unveiling the newest iPhone on September 12. The costlier of the two Lumias will go up against the iPhone and is expected to feature a larger, brighter screen; a powerful camera on both sides; Qualcomm dual-core chips; Skype calling; voice recognition; short-range radio technology for wireless payments and built-in maps for navigation.
But Lumia will need something completely different to beat the iPhone and Android, such as a bold new shape, exceptional camera quality or a mini-projector, said Tero Kuittinen, an analyst at mobile diagnostics company Alekstra.
Part of the problem is that Windows Phones have only 100000 or so apps, compared with about 500000 for Android or iPhones. “Developers want to see more devices and people want to buy only when they see more apps,” said Sid Parakh, an analyst at fund firm McAdams Wright Ragen. “I’d say it will take years, they are so far behind.”
Nokia may not have years. Finland’s most famous company, relegated to second place in the global cellphone market by Samsung after more than a decade at the top, has bet its smartphone future on Microsoft.
Microsoft needs to get at least a 10% share of the smartphone market by the end of 2013 to be a contender, Canaccord’s Walkley said. – Reuters