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4/17/2012
08:49 AM
Eric Zeman
Eric Zeman
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Nokia's Lumia 'Not Good Enough' Say Carriers

Nokia's carrier partners say the Finnish phone maker's Lumia line of smartphones can't compete against Apple's iPhone and Google's Android.

Even though they are selling tens of millions of handsets, wireless network operators loathe their reliance on Apple and Google's smartphones. That's why many of them want a third ecosystem in place to offer competition and give them back some bargaining power. Nokia's new line of Lumia-branded Windows Phones aren't filling this role, as some carriers had hoped.

"No one comes into the store and asks for a Windows phone," said an executive at an unnamed European wireless network operator. Speaking anonymously to Reuters, the exec said, "Nokia have given themselves a double challenge: to restore their credibility in terms of making hardware smartphones and succeed with the Microsoft Windows operating system, which lags in the market."

The Lumia 800 and 710 have been on sale in Europe since November. In its latest quarterly report, Nokia said that it sold 2 million of these devices--but it sold five times as many Symbian handsets, which Nokia is in the process of fading out. The Lumia 900 went on sale in the United States April 8, and has been selling better than AT&T expected it to, but Nokia has stumbled badly.

The Lumia 800 launched with battery and camera problems. Though these were later cleared up with a software update, the problems left some customers frustrated. Just two days after launching the 900, Nokia admitted that it had faulty software that affected the device's ability to connect to AT&T's data network. This was also corrected with a software update. Given Nokia's current position in the market, it can't afford to make mistakes such as these with its marquee products.

[ There's another challenge for smartphones running Windows software. Read Windows Phone's Big Problem: Google Ignores It. ]

Reuters' unnamed source noted that Windows Phones can do some cool things, but there is little awareness of the platform's capabilities. "If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell," he said.

Even more damningly, a representative from another carrier called Nokia's Lumia smartphone too cheap to be priced so highly. Prices charged in Europe are closer to the full retail amount. In the United States, AT&T is subsidizing the Lumia and offering it for just $99 on contract. "If they could lower the price we think they could sell more. It might be worth making it a bit of a loss leader to get it out of the door. It's not rocket science," said the representative.

Another complaint coming from European carriers centers on marketing. In the United States, AT&T has put a lot of weight behind the Lumia 900, which had a splashy concert launch in New York City's Times Square, not to mention advertisements. Microsoft's role in the AT&T push for the Lumia 900 is unclear. The network European network operators, on the other hand, claim Microsoft isn't spending nearly enough on marketing its mobile platform.

"We can open our stores to them and train our staff to sell the phones, but that's it," said one of Reuters' sources. "Ultimately, Nokia and Windows are challengers and they either need to come to market with a really disruptive, innovative product or a huge marketing budget to create client demand. So far they have done neither."

Nokia--more so than Microsoft--needs its Lumia smartphones to succeed. The company has forecast losses for the first two quarters of the year. It badly needs to turn things around, and will only do so if these phones start selling.

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EVVJSK
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EVVJSK,
User Rank: Apprentice
4/20/2012 | 5:39:26 PM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
okia Lumia HAS to do well in the US now as Nokia really hasn't released a new phone in the US for a long time (as the E7 and Meego were basically canned in the US market by Nokia). I am not saying they could not be had (e.g. Amazon), but they weren't released with ANY backing in the U.S.
Europe fosters a very unlocked phone culture (GSM everywhere helps). Nokia will need to do well everywhere to succeed. Recent reports of Android doing well in India and other places had Stephen Elop of Nokia worried because he thought S40 OS could help him there. People want what they want, not necessary what others want them to want (some e-zine author was comparing Windows Phone to OS/2. There are some parallels. I chose to use the VHS vs Betamax.
EVVJSK
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EVVJSK,
User Rank: Apprentice
4/20/2012 | 5:31:09 PM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
Yep, it was a typo. I usually think about what I want to say. Don't always stop to ponder the subtleties like typing.
If anything I am currently a Symbian fan (which is implied by the smoldering aka not quite burning reference). Mostly it was a bit of a shot at Stephen Elop (google it if you need to). I do like Andoid. Don't think Nokia should have gone "all-in" on Windows Phone, instead should have let Symbian, Meego, and WP duke it out across it's customer base (old as well as newcomers) to see which one was best.
ANON1237925156805
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ANON1237925156805,
User Rank: Apprentice
4/19/2012 | 9:05:09 PM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
You're probably right that the Lumia 900 can make a go of it in the US if AT&T, Microsoft and Nokia continue to advertise and publicize what is clearly a best of breed device. As usual for Nokia, the phone is an engineering marvel and Windows mobile is a delight as well. The comments in the article about a minor rollout glitch for AT&T are not very useful.

Still I think that your reaction to rest of the article is a little off base, not because of your perfectly reasonable loyalty to Microsoft but because it reflects US-centric thinking.

Microsoft is looking for mobile salvation and mindshare here at home and AT&T, like all carriers, wants to break the Apple/Android duopoly. Now that the iPhone is no longer exclusive to AT&T, it would love to be the first with a hot new product. All of this makes it seem as though the US will make or break Nokia. Mr. Zeman is suggesting not so, and I agree. It's important but it can't be the savior.

Nokia is first and foremost a European company; in fact when they did their pioneering work in cellular technology 30-40 years ago they saw themselves as a Finnish company. Only in the last 15 years or so did they go international; in doing so they targeted Asia and all of the Americas, not just the US.

It wasn't a good thing when Nokia's smartphone strategies proved wrong-headed especially here in the US. Still because of their elegance and quality Nokia feature phones remained dominant in many emerging markets, including large markets like India. That has sustained Nokia for several years while they tried to find a winning strategy.

What's taking them to the brink now is the erosion of their share in these markets as inexpensive Android handsets are catching on quickly and Blackberries are pushing into the enterprise in surprising areas. Stemming that tide would seem to be Nokia's highest priority: They are already in the game and there's enormous growth potential. It would seem that Nokia gets this: They have lowered the price on the Lumia 710 in those markets just today. (See article in WSJ.)

At the same time Nokia must focus on its home base. Europe likes to support European manufacturers, and to tweak its nose at American technological imperialism. Think Airbus vs Boeing, etc., etc. Nokia has to sell European carriers and buyers on why their new products are on a par with the best in the world and a worthy choice.

Within that framework, sure Nokia, party on in the US. Just remember that your partners in the US have as much skin in the game as you do. Let them do the heavy lifting while you get your own house in order.
AustinIT
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AustinIT,
User Rank: Apprentice
4/18/2012 | 12:39:29 AM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
ur fandroid needz a spelzckr
AustinIT
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AustinIT,
User Rank: Apprentice
4/18/2012 | 12:37:25 AM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
This article does little to foster the truth about Nokia, Microsoft, and Windows phone. And the truth is that this thing will be a success in spite of all the negative publicity that misinformed, lazy and irresponsible reporters put out there. btw - most of the negativity posted in the article was about Europe. Must be part of the overall sour grapes they have been experiencing economically.

The software bug in the 900 only affected very few customers. I bought my 900 pre-order and it had zero problems from the get go. Nokia pushed out the bug fix update four days ahead of their stated release date. Try getting Apple or Google to even admit they have an issue let alone get a fix out that quick.

Haven't had a single problem with my phone yet. Works excellant with Office365 and all the other Windows Live services (hot mail, xbox, etc.). I love it so far.

And, I have to give AT&T some credit with their LTE service in my area. Was quite surprised at how pervasive it has gotten so quick and it works great. I have a tethering plan with my phone (yes the 900 will allow up to five devices to connect to it to share the LTE data pipe) and it gives me plenty of response not only accessing websites but also remoting in to my client's networks.

Signed,

Happy Nokia Lumia 900 owner.
EVVJSK
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EVVJSK,
User Rank: Apprentice
4/17/2012 | 7:49:07 PM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
Dengerously close to being a smoldering platform. Time will tell !
RobMark
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RobMark,
User Rank: Apprentice
4/17/2012 | 5:57:25 PM
re: Nokia's Lumia 'Not Good Enough' Say Carriers
You did not directly say that the Lumia 900 is not on sale in Europe yet. That makes a big difference. I would expect the marketing push for Lumia phones to take place when the 900 or equivilant phone is brought to market in Europe.

Sounds like an article trying to make something out of nothing.
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