AT&T has chopped the price of Nokia’s Lumia 900 in half, and is now selling the high-end Windows Phone for $50 with a two-year contract.
Although Nokia has downplayed the price drop, telling the New York Times that it’s “industry standard practice” during a phone’s life cycle, the Lumia 900 is only three months old, and debuted at about half the price of other flagship smartphones. The further reduced price is a sign that the Lumia 900 isn’t doing as well as Nokia and Microsoft had hoped.
There’s other evidence, too: Horace Dediu, an analyst for Asymco, estimated that Nokia has sold 330,000 Lumia phones in the United States, based on data from comScore and Nielsen. By comparison, AT&T activated 4.3 million iPhones in the first quarter of 2012. (UPDATE: In a statement to Neowin, Nielsen said it doesn’t advise combining its numbers with comScore’s, and does not feel that Dediu’s estimate is accurate.)
I liked the Lumia 900. In my review, I said it was good enough to start a comeback for Windows Phone and Nokia. But the latest data from Nielsen shows that Windows Phone only captured 1.3 percent of the U.S. market, so now I’m left pondering what went wrong with Nokia’s flagship phone. Here are a few possibilities:
The Design Was Too Weird
When I showed the Lumia 900 to other people, they weren’t always as impressed with the design as I was. They thought the phone’s cyan, polycarbonate shell was an attachable case, not a part of the actual phone, which they found to be rather bulky.
When I show people my Samsung Galaxy S II, however, the first thing they do is marvel over its light weight and slim figure, and they don’t seem to mind its rather generic plastic casing. It’s no surprise, then, that the Galaxy S and its offspring are some of the best-selling smartphones of all-time. My theory, based on anecdotal evidence: The Lumia 900’s hefty design was perhaps a little too interesting for its own good. It pursued uniqueness so relentlessly that thinness and lightness were neglected, at Nokia’s peril.
Nokia Needed a New Introduction
Nokia hasn’t been a big brand in the United States since the days of the number pad. The company needs to re-introduce itself to the mainstream by explaining its design principles and making a strong case for Windows Phone.
Instead, U.S. consumers saw this lame ad from AT&T–the one where the average dude tries to impress the cute girl with his Lumia 900. The ad copy was a mishmash of marketing jargon that’s easily confused with any other phone, and felt tame for a brand that needed to make a grand re-entrance. Nokia had its own ads, in which Chris Parnell claimed that all other smartphone owners were beta testing rubes. Not good, considering that some of the first Lumia 900 phones suffered from connection problems.
Windows Phone Still Needs Work
Nokia’s destiny is now entwined with that of Windows Phone, which faces some tough challenges. AT&T sold the Lumia 900 as an exclusive, but Sprint and Verizon weren’t interested in Windows Phone at the time, so Nokia’s options were limited anyway. Windows Phone’s shortage of apps and reliance on the crusty Zune software for media management were additional turn-offs.
Windows Phone 8, due later this year, may fix some of these issues. Verizon and Sprint are promising to sell phones based on the OS, and the new Windows-based kernel will make app development easier. Microsoft is replacing the Zune brand with Xbox as a multi-media catch-all, so hopefully better solutions for music and movies are coming.
Of course, Windows Phone 8 won’t save the existing Lumia 900, which isn’t getting the upgrade. The phone may borrow a few features from the new software, but won’t be able to run Windows Phone 8 apps, so it’s bound for obsolescence. At this point, smartphone shoppers should ignore the $50 off, and wait to see if Nokia can do better next time.