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.
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.