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The situation from Nokia may have just gone from bad to worse

Fresh off not as bad as expected earnings, Nokia, Oyj. (HEL:NOK1V) is preparing to launch Windows Phone 7.5 "Mango" handsets at the annual Nokia World conference in London.  That lineup is expected to include the "Sea Ray"/"Sun" and the Nokia 800, a WP7.5 version of the slick iPod Nano-esque N9.

But disturbing news arrived this week from U.S. advertising blog AdAge, which revealed that Nokia and its partners had been shopping around a troubling document while looking for a U.S. ad agency.  That document revealed that Nokia would likely not launch a handset in the U.S. at all in 2011.

Previously Nokia had always suggested that there would be some product in the U.S. by the end of 2011.  It had used phrases like "limit availability" to characterize this lower volume launch and labeled 2012 the time frame for the "full launch".  But again, there was always the assumption that the company would deliver at least some product, in order to excited customers in the lucrative U.S. market.

If true, this is a major blow to Microsoft Corp.'s (MSFT) hopes to grow market share in the U.S.

It's also evidence of Nokia's ongoing struggles in the U.S. both in sales and at a corporate level in adapting to U.S. carriers' business model.  Unlike many foreign regions where handsets are sold at-cost unlocked, U.S. carriers tend to rely on subsidized locked handsets.  Those subsidies add an extra wrinkle of complexity for handset makers, as they now must appeal to both the customer and the carrier.

Still, it's unacceptable that Nokia has been unable to master this slightly different business model, particularly when its non-U.S. peers like Samsung Electronics Comp., Ltd. (SEO 005930) have done so with ease.

If Nokia indeed delivers its product payload in early 2012, it will not only miss the lucrative holiday shopping season, it will also be delivering already dated hardware onto the ultra-competitive American market.  That may be a death sentence to Nokia's hopes of being a strong competitor in the U.S.

It's already simply dumbfounding that Nokia is the flagship partner of Microsoft's Windows Phone 7 project, yet it has been unable to bring smart phones to market as fast as other WP7.5 manufacturers.  Now the situation may be about to go from bad to worse.

Source: AdAge



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RE: Samsung Would Have Been a Better MS Partner
By drycrust3 on 10/25/2011 11:43:31 AM , Rating: 2
quote:
would you rush into production knowing you are not going to make projection?

The problem for Nokia is the world has changed. A recent report suggests that half of the world's regular internet users will access the internet via a mobile device within the next 4 years. That's roughly 500 million devices.
On top of that, once a person has become accustomed to certain apps, e.g. a builders level, they won't want to buy a phone that has less apps in the application library, but they will only buy a phone with a bigger library, thus second time purchasers of a smartphone won't be interested in a WP7 phone, but will be more interested in an Android or iPhone.
There was a recent report on this website that says Nokia is having to lay off staff left right and centre, and while there were no specifics it sounds like their sales have plummeted.
So, yes, Nokia should be rushing new phones into stores, and they should be Android phones, because by next Christmas there will only be a small market left for them.


By woofersus on 10/25/2011 3:06:58 PM , Rating: 2
Do you really think the number of available apps is the primary factor for most shoppers? If that were an insurmountable obstacle Android would never have made such strides against IOS, which had a pretty huge head start in that particular area. Further, a huge number of Android's 320,000 apps are duplicative. I don't really think 35,000 apps is all that bad for a first year total, but regardless I don't think most people will find it limiting. I only have like 35 on my Android phone. I know it wouldn't really be an issue for me if I were to switch. In fact, I would need fewer apps, because there is more functionality built in.

You could certainly make an argument for Nokia pursuing Android phones instead of WP7.5 (or even both) but I don't really think that particular issue was/is a major factor.


"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














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