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Will Nokia Lumia be a success?

Nokia last year announced that it will ditch its rusting Symbian OS and embrace Windows Phone 7 on their next generation phones.


After nearly an year Nokia revealed Lumia range of phones featuring Windows Phone Mango. The result is a mixed bag one side you have possibly the most fluid OS on the phone ever with no lags, no frame skipping etc... The animations and transitions are very smooth, pinch to zoom, rotation are really smooth. The home screen is really attractive and very different, overall the whole OS is very minimal and has almost no chrome. The build quality of Nokia Lumia 800 and 900 are top notch, clear Black AMOLED screen is vey bright. While on the other hand it is just like Apple a walled garden by Microsoft. You cannot change much look or feel of the OS like Android, Bluetooth file transfer is prohibited(really??? Whats the use of of putting a Bluetooth inside), the apps are too far too few, official apps like Twitter, Facebook, YouTube are missing. The device does not have a removable battery, while the OS performs well on the processor inside the Lumia but a single core processor is really desired to view FullHD content, play high quality games, recording 1080p videos etc... The multitasking on Windows Phone suck, its the same approach copied from Apple. You cannot have custom browsers(Non IE), no custom keyboards etc... Flash is not supported.

Nokia's second coming, if it happens, is some way off. The Finnish giant is pinning its hopes of a return to the smartphone market on the newly arrived Lumia 800 and 900.
But estimates for Christmas sales of its Jesus phone are dwindling by the day.

US technology investment specialist Pacific Crest revised down its estimates for Lumia sales from 2m to just 500,000 by Christmas. Now even that number looks ambitious.

A forecast from market research firm IDC suggests that 520,000 phones using the Windows operating system – made by HTC and Samsung as well as Nokia's Lumia – will ship in Western Europe in the fourth quarter. This compares with 140,000 Windows Phones shipped in the third quarter.

The difference of 380,000 can largely be attributed to the Lumia. It has only launched in six countries, and those countries that don't have it are ordering Windows phones at pre-Lumia levels.

On current form, the Lumia will barely make Apple or Google blink. The new iPhone 4S, released in October, sold 4m units in is first three days. It would be fairer to make comparisons with previous Nokia handsets, but even here the numbers are underwhelming.

Nokia's last big smartphone launch was in October 2010 with the N8, which ran on its by then outmoded Symbian operating system.

Before Christmas, the Lumia was only available only in the UK, Germany, France, Spain, Italy and the Netherlands. IDC calculates that in those markets, the N8 shipped 780,000 units by its first Christmas, almost double what the Lumia will achieve.

Surprising, given the Lumia is being supported by Nokia's largest ever marketing campaign, with television advertising aplenty and a reported $1bn (£640m) in subsidy from Microsoft as a thank you for using its software. Orange is even giving away an Xbox 360 with every handset.

The network operators have said repeatedly that they want it to succeed, because it is their interest, and in the consumer's interest, to have a choice of three big operating systems. Nobody wants to see Apple's iOS and Google's Android become too dominant.

The suggestion is that Nokia has kept supplies to retailers deliberately low. The company does not want to see its most premium product discounted in the January sales. A sold out phone is infinitely more desirable than an oversupplied one taking up space in the stock room.

The company said last week that Lumia had the best ever first week of Nokia smartphone sales in the UK in recent history. In this country, Windows phone shipments will quadruple from 50,000 last quarter to 200,000 this quarter, according to IDC.

Orange is already reporting that some of its stores have sold out, suggesting that for Nokia these first few months are all about heightening demand rather than failing to generate it.

A small-scale launch may also be wise at this stage. There have been teething problems with the phone, with some owners – including yours truly – finding the battery drains fast and then won't recharge.

Nokia says this is to do with the brain rather than with the hardware, and will issue two software updates.

There are bound to be glitches. The phone was produced in a race against time, eight months after Nokia announced it was dumping Symbian in favour of Windows.

And Nokia has always said that Lumia's big push will not come until next year, when Microsoft releases a new version of its operating system which the Finnish manufacturer will have had a chance to shape.

Marketing will ramp up again in the new year, when the full colour range will be available – only the black model is on sale now, blue will come in December and pink in January.

The pre-Christmas season has been about changing the attitudes of opinion formers. Microsoft only introduced its Windows Phone operating system last year, and the shop floor sales people were not evangelising. Many didn't know the product – Microsoft had 0.6% market share in Europe until Lumia's arrival.

By Christmas next year, IDC predicts 3m Windows phones will sell per quarter in Western Europe, just under 10% of all smartphone sales.

World domination is a long way off. The Lumia in its current form is no Jesus phone. More a prophet, heralding bigger things to come.

I need to first make it clear that as a rule I associate very little credibility with analyst predictions. They might be the next level up from palm reading, but analysts have proven time and again that their so called objective view and forecasts are for sale to the highest bidder.

This being said, I happen to agree with the conclusions of two analysts expecting Windows Phone to disappoint and Nokia Lumia devices to fail to gain traction with consumers.

The fact that I’m writing this post from a high-end Sony Android smartphone has nothing to do with it.

I have been waiting for a Windows Phone device to rival the iPhone and Android phones for over a year. And it’s just not on the market.

Look at it this way, WP has been a disappointment since it was launched. Mango will be no different. This despite the fact that Windows Phone is an excellent platform, in many ways better than its direct rivals.

But it’s the devices that aren’t helping WP reach its true potential. And, unfortunately Nokia Lumia are in no way superior to the iPhone or Samsung Galaxy S 2, for example.

Bernstein Research analyst Pierre Ferragu pointed out a research note Friday that checks on Google Trends finds that the buzz level for the Lumia 800 is about on a part with the Nokia

N8, the company’s top-of-the-line but poor selling smartphone a year ago. He thinks this one could be a dud, too.

“With no breakthrough innovation, we believe Nokia’s new phones are unlikely to get traction in a highly concentrated high-end,” he writes in a research note. “Second, we don’t believe Lumia phones are competitively priced. Third, we believe in economics of increasing returns for mobile ecosystems and judge rather unlikely that Windows can gain critical mass against Android and iOS. Fourth, we have seen evidences of lack of traction for the Windows operating system over the last 12 months and challenge the idea that the Nokia brand can make a meaningful difference today.”

Pacific Crest analyst James Faucette wrote in a research note that shipments of Nokia’s Windows Phone 7 units in the December quarter could prove disappointing. “We believe that shipmentsof Nokia’s new Windows Phone 7 products have been lower than we had previously anticipated,” he writes.

“We had expected that the company could ship as many as 2 million units into the six targeted markets for the holidays; however, we now believe that those shipments are likely to be less than 1 million for the quarter.” He adds that sell-through checks find “disappointing sales” for the Lumia so far, and that December quarter sales could be under 500,000 units.

There are early signs of trouble with Nokia‘s initial round of Windows-based smart phones.

The Espoo, Finland-based mobile phone company has bet its future on a decision to shift its high-end hardware to MicrosoftWindows Phone software and away from its proprietary Symbian OS. The company recently started selling the first fruits of its arrangement with Microsoft, the Lumia 800.

Bernstein Research analyst Pierre Ferragupointed out a research note Friday that checks on Google Trends finds that the buzz level for the Lumia 800 is about on a part with the Nokia N8, the company’s top-of-the-line but poor selling smartphone a year ago. He thinks this one could be a dud, too.

“With no breakthrough innovation, we believe Nokia’s new phones are unlikely to get traction in a highly concentrated high-end,” he writes in a research note. “Second, we don’t believe Lumia phones are competitively priced. Third, we believe in economics of increasing returns for mobile ecosystems and judge rather unlikely that Windows can gain critical mass against Android and iOS. Fourth, we have seen evidences of lack of traction for the Windows operating system over the last 12 months and challenge the idea that the Nokia brand can make a meaningful difference today.”

TheFlyOnTheWall.com reports this morning that Pacific Crest told investors this morning that shipments for Nokia’s new Windows-based phones are “surprisingly weak.” Details on the report when I get them.

Pacific Crest analyst James Faucette wrote in a research note that shipments of Nokia’s Windows Phone 7 units in the December quarter could prove disappointing. “We believe that shipmentsof Nokia’s new Windows Phone 7 products have been lower than we had previously anticipated,” he writes. “We had expected that the company could ship as many as 2 million units into the six targeted markets for the holidays; however, we now believe that those shipments are likely to be less than 1 million for the quarter.” He adds that sell-through checks find “disappointing sales” for the Lumia so far, and that December quarter sales could be under 500,000 units.

While current trends show Windows Phone share declining, there is some problem when a barely advertised or promoted bada OS from Samsung has more market share then heavily promoted Windows Phone.

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