Let’s Be Realistic About Nokia’s Chances

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Jared Newman for TIME

My post from earlier this week about what went wrong with Nokia’s Lumia 900 appeared to touch a nerve for fans of Nokia and Windows Phone. In the comments section and on Twitter, readers insisted that Nokia’s Lumia 900 sales were probably fine, that the phone is awesome, and that journalists were blowing a $50 AT&T price cut out of proportion.

Here’s one example, from commenter “the person”:

I’m SO sick of these hit pieces….one after another after another. The official numbers haven’t even come out from Nokia and people are running with these numbers like gospel. I will be back here in a few days to watch you eat crow. You hack journalists REALLY need to stop reporting on the rumor.

Given the reaction, and the release of Nokia’s quarterly earnings, I think Nokia’s chances of a turnaround are worth a closer look.

The numbers I cited in the original story were Nielsen’s estimate of 1.3 percent U.S. market share for Windows Phone, and Horace Dediu’s estimate of 330,000 Lumia phones sold by Nokia in the United States last quarter, based on data from Nielsen and comScore. (Nielsen claims that Dediu’s extrapolation is inaccurate because the firm’s methodology differs from comScore’s.)

Now, we have actual numbers from Nokia, and I don’t see much crow-eating in order. Last quarter, Nokia shipped (not sold, mind you) 600,000 phones in North America. That number covers all Nokia phones, not just Lumia Windows Phones, and is down from 1.5 million for the same quarter last year, before Nokia was selling Windows Phones.

Even if we assume last quarter’s shipments were mostly Lumia handsets, and all other Nokia phone sales have evaporated in the United States, 600,000 is still a paltry number. The Lumia 900 was a flagship AT&T phone. It had more advertising behind it and a bigger sales push from AT&T clerks than any other Windows Phone to date. At $100, it was priced to move.

(MORE: Nokia Lumia 900 Review: A Solid Slab of Windows Phone)

And yet, the Lumia 900 couldn’t even crack 1 million units in the United States during its debut quarter. By comparison, Apple’s original iPhone reached 1 million U.S. sales after 74 days in 2007. So did Motorola’s original Droid in early 2010. Both were pivotal devices, and the latter helped establish Android as a viable competitor to the former.

For Windows Phone, the Lumia 900 didn’t have the same impact. Maybe it was a solid performer compared to a run-of-the-mill Android phone, but the purpose of the Microsoft-Nokia partnership was to create unique lead devices that made a dent in iOS and Android market share. That hasn’t happened.

If you dig Nokia’s wares, there are a few points of optimism left: Although Nokia is bleeding money, it still has a couple years of cash in reserve. Symbian sales will continue to dry up, but Lumia phone shipments are growing. Worldwide, Nokia shipped 4 million Lumia devices, doubling the previous quarter. That was enough to give Nokia’s stock its biggest boost in over four years. All of these things ensure that there will be more Nokia Windows Phones.

But to really turn things around, Nokia needs a blockbuster–a single, stunning smartphone that puts the company back on the map alongside Windows Phone. The Lumia 900 wasn’t it, and although the AT&T price cut isn’t the end of the world, it’s not going to turn the phone into a superstar either.

Windows Phone 8 has a lot of interest from wireless carriers, and will expand the range of hardware that phone makers can use. It may also encourage more app development due to its shared kernel with Windows. Nokia can take advantage of all these things, but to get its groove back, it also needs a more broadly-appealing phone design and a better marketing message.

Even if you’re happy with the Lumia 900–again, I liked it too–you’d better hope Nokia can do better, or else you won’t see many more phones like it.

MORE: Nokia’s Lumia 900: What Went Wrong

18 comments
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charliepopette
charliepopette

 Jared, the numbers you quoted for iphones from flurry blog are disputed on wikipedia. Iphone was released late June 2007. In its first full quarter, Q3 2007 it did not come even close to one million, about half of that. Source: http://upload.wikimedia.org/wi...

This would make the Lumia line a much faster seller.

David Leon Feild
David Leon Feild

Yea once the media stops backing the same old same old's and actually takes a look at these new operating systems  and the phone hardware's that are running them and get the hell off of Apple and Google's Damn Jock then maybe these quality built handsets will have a shot. I stood in line for 14 hours and got the 10th and 11th iphone sold at the San Francisco Apple Store at the launch of the very first iPhone and have owned every apple device since, I have owned, played and dabbled with with numerous android devices from the T-Mobile Vibrant to the Galaxy S III and I will tell you google android is going down the same road apple has been traveling down with their OS....UPSELL on the same crap!!! Battery Draining Finger Addicting Junk....Windows Phone to me at first impression was snappy and responsive and solid but basic, however I have been playing with it for the past couple days and I got to say, its awesome!!! It totally meets my needs and it feels solid, and dependable and secure and  I learn more and more cool tricks about it everyday!!! I think Windows phone had Quality not Quantity in mind when they designed the Windows Phone OS and it really shows....Im a real android lover but truth be known I cant stand all the stuff running in the background on android just eating the hell out of my battery, and yes yes yes I know I can Root and Install a App Killer yadda yadda yadda.....but why should I have to0? We are paying (Retail) more for a phone than a nice computer or flat screen TV, can't the damn thing just work? I love my new windows phone, stop listening to online reviews, best buy, t-mobile,atamp;t, sprint,verizon pay these smucks to get you to buy the "Latest and Greatest" I just look at the unboxing vids , I really am a sucker for a quality build phone, with decent accessories included...breaks my heart to buy a $500 plus handset and open the box and see just a charger and a phone and a stupid texing can wait sticker and some manuals I will never look at, waste of paper if you ask me, specially since all the carriers marketing junk to get you to buy is subsidies in the wholesale costs of these new $500+ handsets, do you think people in 3rd world countries pay $600 US for a Samsung Galaxy Phone? LOL!!!! HELL NO!!!!!

Manuel Avellan
Manuel Avellan

That dog don't hunt no more!

This weekend I had the opportunity to play with a nokia 710 for a couple

of hours. What a letdown...Where do I start, Ugly interface with Blue

tiles, i was trying to instal Tango for my friend, and the first rude

awakening is that I could not download the app because it had an error

code. In short I tried using my Google email to open an account at the

Windows app store, but it would not let me it had to be a live email

address!! big MS mistake. It took me 1 and 1/2 hour to finally get the

app in his phone.

When I looked at the settings it said no updates available, after I

installed Zune in my friends computer (Ohhhhh Zune and I thought Itunes

was the pits!) Zune told me there several updates (9 in total) so I

reset the phone and then put in the updates. Tried starting the phone

without a live email, and no can do. (This is going to anger many

people)

Finally I tried to teach my friend how to install music on his phone

with zune, and after 3/4 hour (and wanting to set my hair on fire and

put it out with a sledge hammer) figuring how to move music into

AAAAAAAArrrrrrrrrrrrrrggggggggggg Zune, and then Sync with the phone, we

whent to the phone and started clicking icon to find the music after 5

minutes of clicking we found it.

Review- The OS is a piece of dirt, the phone sounded great inside and

outside speakers, the screen was clear and while using tango and

comparing the video with my Iphone it looked good. So the best thing to

do for Nokia is to Get of MS RT and get on Android, or go down in flames

like a bat out of hell. This is farrrrrrrr worse that Vista this is

Horrible MS.

Stay away from this phone.

David Leon Feild
David Leon Feild

Sounds like you have no Idea what you are doing and you are trying too hard, I got my first WP7 device less than a week ago and everything you described in your post was completely contrary to my experience, my gmail account linked right up to Microsoft live and I have had no issues with Zune on my PC other than a simple restart after the install. Hope you eventually find your way around the WP User interface cause its so easy a caveman can do it LOL!!!

Frederick Edwards
Frederick Edwards

So for Apple products you need an Apple ID, for Google products you need a Google ID, but "big MS mistake" because they require a Microsoft ID for their own products?  And this took you 1.5 hours to figure out?

Raymond Chuang
Raymond Chuang

I think Nokia has a new cellphone that runs Windows Phone 8.0--probably called "Lumia 1000"--that uses the Qualcomm Snapdragon S4 chip. It'll probably come out in October--and unlike the Lumia 9000--won't be obsolete anytime soon, thanks to the addition of NFC mobile payment support.

Robert June Tria
Robert June Tria

i think lumia 900 is a great smartphone hardware-wise... if folks are not buying it, i think the problem is the consumer's confidence that there will be a lot of apps for the phone. it is clear from the start that the lumia 900 will not capture sales looking at the truth that windows, at the time while the lumia 900 is being announced, is already cooking the next windows phone os and the current os will not be compatible to that new os. the lumia 900 was doomed to fail from the start.

what windows and nokia should do is attract more apps developers while producing great smartphones...

the lumia 900 looks great... but it needs more apps....

nd1090
nd1090

The thing to remember is that this is a first real device for Nokia in the US market after forever. 

I believe that a combination of Windows Phone 8 with PureView might be what Nokia will needs - the killer feature that the current phone does not have.

FWIW - the phone is still phenomenal - as a user that switched from an iPhone - it is everything I hoped for and the real test is - when the kids get in the car - they fight over my phone or my wife's iPhone 4S...  

The issue is not the hardware or software, it is one of perception and market penetration - and anyone that expected Nokia and Microsoft to crack it overnight has unrealistic expectations. All you need to do is look at the XBox history and what people said about it when it entered the market against two giant rivals in the PlayStation and Nintendo. Microsoft is very good at playing the long-game - and Metro is a great horse to ride in the long run. 

Sam Trutna
Sam Trutna

Whether or not "crow-eating" was in order is irrelevant. I get that you're going for "the scoop" or whatever you call it, but a lot of us would rather read news based on fact, not conjecture.

Adil
Adil

I used Nokia for 5 years and also tried latest models for a few months but to say very true it don't meets the class of Iphone. 

JamesSB
JamesSB

You state that the Driod sold over one million in its first three months, but failed to mention that it was launched in Oct and so it would include the holiday season. So naturally it will sell more than phones launched during the off season.

Guest
Guest

Windows Phones (Nokia's amp; those by other OEMs) have the highest satisfaction rate of any other phone OS.  People who buy them generally LOVE them... A LOT. What that tells me is that Windows Phone doesn't have a software or hardware problem, it has a marketing problem.

Obviously, Apple and its i-brands are marketing kings.  They don't really even need advertising anymore.  Android amp; Droid are cool names as well--they just sound high-tech amp; futuristic. 

But "Windows Phone"... for the consumer market?  Sorry, most consumers are not interested.  The "Windows" brand may work in the enterprise, once Windows Phone 8 is launched, because that suggests synergies with PCs, laptops amp; tablets... and that may be how Windows Phone finally breaks through... but as a consumer brand, Microsoft needs another approach.  Not another OS... just a re-branding somehow.  An X-Box branded phone would be a start--the X-Phone.  They could target gamers with it.  From there, they could expand... maybe a higher-end "Surface" branded phone (assuming the tablets catch on).

Manuel Avellan
Manuel Avellan

You nailed it!, I agree The X Phone and take out those ugly colors from the desktop, and add 100.ooo apps

Ivan Su
Ivan Su

Lumia 900 is just not extraordinary enough... if u understand what i mean by it. In order to overturn this apple-dominated condition, Nokia really need to create some stunting features and grab people's eyeballs back.

Manuel Avellan
Manuel Avellan

I have had several Nokia phones and they were great, they had great reception, and sound, and features. I have used windows CE, Mobile all the way up to 6.5 and gave it up for IOS. I have had an Iphone for 2 years, it's quick, elegant, more apps that you can shake a stick at, and yes light years better that anything Nokia or MS has done.

when I read about the Lumia it looked to funky and playful to compete with the big boys (IOS and Android) Can you picture an Exec pulling out a blue phone with puke green tiles, orange and sky blue in a meeting?  O and by the way can you download tango on that phone?  sorry we only have 2000 apps out of which 1% is worth having.

Nokia better jump on the Android banwagon or face extinction,  and MS better buy a Telecom so they can develop and swallow loses until their phones: 1- Look grown up and elegant, 2- have a decent amount of apps (while this happens billions will be lost) and stick with it and not cop out like with the Zune. (Which by the way in its last iteration was the most elegant and beautiful piece of hardware I have seen from any manufacturer, and the OS was sweet, finger friendly, responsive and unique,but it had NO APPS, hence no one wanted one.)

By the way I work in a medical software Co with close to 4000 employees, I have not yet seen 1 phone among my peers with a windows OS.

David Leon Feild
David Leon Feild

ah ha ha Guess you didn't know you can change those tiles colors and from a light to dark background, and the Lazar blue color is optional, its seen more in commercials due to that Lazar Blue really standing out , however there is a nice powder coat flat black one as well that doesn't get all greased out  finger prints all over it like "Grown up handsets" LOL your hilarious, bet your mom had a tough time getting you to try vegetables huh?   They really are good!!! and good for ya too!!!!