Nokia shares fell 18%, to $2.38, in trading Wednesday after analysts pilloried the launch event, which saw the introduction of the Lumia 920 and the Lumia 820. Analysts had two main issues with the launch--that it was light on details, and that what was shown was underwhelming.
"Investors wanted more substantive changes," wrote Argus Research analyst Jim Kelleher, in a note.
Nokia introduced two devices at the New York City event—the "flagship" Lumia 920 and the Lumia 820.
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Both are the first, publicly demonstrated devices to carry Windows Phone 8, which offers support for advanced features like quad-core processors, which are not found in the new Nokia phones.
Both phones feature a 1.5-GHz Snapdragon S4 dual-core processor, cameras with Carl Zeiss optics, and wireless chargers. The 920 generally carries higher specs all around. It sports a 4.5-inch display, compared to 4.3 inches for the 820, 32 GB of storage (compared to 8 GB) and PureMotion HD+ display technology (compared to the 820's ClearBlack OLED display).
But most analysts saw the devices as "me too" entries that, while comparing favorably to the features on the iPhone and higher-end Android phones, were not sufficient to make users switch from the more established, rival platforms.
"We believe Nokia will struggle to regain sufficient market share with Windows [Phone] 8 devices to offset increasing pressure on its Mobile Phone business from low-cost Android devices in 2013," said Deutsche Bank analyst Kai Korschelt, in a research note published after the launch. Deutsche cut its rating on Nokia's stock to a sell.
According to some analysts, consumers just aren't buying into the Windows Phone platform, which eschews the standard, icon-based GUI in favor of a screen that's subdivided into squares that Microsoft calls Live Tiles. The tiles display photos and real-time updates from social networks, email, IM, and other services. In Windows Phone 8, Microsoft shrunk the tiles so users can see more of them on the screen at a given time.
"The specs are competitive, with Nokia's focus on the camera/imaging technology a highlight. However, hardware hasn't been Nokia's issue; generating interest in Windows has," wrote Oppenheimer & Co's Ittai Kidron.
Some market watchers were also troubled by Nokia and Microsoft's refusal to specify a shipping date or prices for the new phones. Carrier agreements also were not disclosed. "Nokia must announce major carrier partnerships, expand its allure with consumers, while differentiating in what's likely to become an even more crowded sector. Market competition remains fierce," said RBC Capital analyst Mark Sue, in a note.
Nokia shares continued to fall Thursday, off 2.31%, to $2.33, in early trading. Microsoft was faring better. Its shares were up 1.88%, to $30.96.