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The last gamble?
Nokia is depending on its new range of Lumia phones to revive its fortunes and bring it back into the game.
Dhruv Bhutani, a technology blogger, fell in love with the Nokia N95 after it debuted in 2007 and never used a non-Nokia phone again. Until 2011, that is, when he decided to give the iPhone 4S a chance. "Nokia made many smartphones after the N95, but none of them came close to it in terms of polish, hardware and user experience, " says Bhutani. "But there is one phone that is as great as the N95 - Apple's iPhone. I find iPhone 4S a complete package, the way great Nokia phones used to be. "
Bhutani is not the only one to feel this way. In the last four years, many Nokia loyalists - and India is full of them - have started doubting if the company can come back from the brink. Now, Bhutani, like other Nokia fans, is looking forward to the Lumia 920, the flagship smartphone the company announced on September 5. "It's a phone that can be the new N95. It can be perfect. "
For Nokia, there is no 'can' : it just has to be perfect. The Lumia 920 and Lumia 820 phones, which are powered by the Windows Phone 8 OS, have the potential to make or break Nokia. "If the new Lumia phones fail, it is going to be devastating for the company. It is their last chance to get back into the game, " says Anshul Gupta, principal research analyst with Gartner, an IT research and advisory company.
The problem for Nokia is that so far its attempts to turn things around have yielded little result. Patrick Moorhead, founder of research firm Moor Insights and Strategy, believes Nokia made two crucial mistakes in the past: it missed the push towards a world where apps, and touchscreens, mattered. By the time Nokia realised its mistake, the iPhone and Android juggernauts were rolling.
In early 2011, Nokia CEO Stephen Elop wrote a candid memo to his employees. "Nokia, our platform is burning, " he wrote, citing the example of a man who found his ship burning and had to jump in icy cold waters. "The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. "
True to the story, Nokia jumped. It decided to move away from Symbian OS and selected Microsoft's Windows Phone for its future device. The partnership bore first fruit in October 2011 when Nokia announced the Lumia 800 and Lumia 710. While the phones looked good on paper, they were not well received by buyers. The recently-launched Lumia 920 and Lumia 820 phones too look good on paper, but analysts are yet refraining from terming them Nokia's saviours.
Gupta believes the new Lumia phones are not going to change much for Nokia. "They will sell in limited quantities. Flagship phones are part of the story but Nokia needs killer devices with a price of around $150 that can help it in markets like India and China, " he says. Moorhead is cautious: "Most of Nokia's success is initially governed by the acceptance of Windows Phone 8. "
One reason why earlier Lumia phones failed was the Windows Phone 7. 5 OS. Bhutani believes even though it was good, it lacked too many important features. Though Microsoft is yet to reveal details of Windows Phone 8, it seems most of these issues have been fixed. Peter Bright, who covers Microsoft for Arstechnica, one of the top technology websites in world, believes the Windows Phone 8 can match Android or iOS, which powers the iPhone.
"I think WP is a good platform with an ecosystem that is far stronger than its market share would imply. I think it will survive for at least as long as Microsoft feels threatened by the growth of the smartphone, but it may never prosper, " says Bright.
Gupta agrees. "As an OS, Windows Phone is nice. There is nothing wrong with it. Gartner believes it can be the second top mobile phone OS by 2016 so obviously we see lot of potential in it, " he says.
The problem for Nokia is that even though it finally has a viable OS, the competition is strong. "Nokia needs a way to punch through the clutter. They do have some very distinguishing features but they need something groundbreaking and exclusive, " says Moorhead.
In Elop's memo, the man who jumped from the ship survived and lived long enough to tell his tale. Nearly 18 months after the company jumped the burning platform, that moment is yet to arrive for Nokia.
LOSING THE EDGE
According to research firm Gartner, Nokia's share in cellphone market was 39. 5% in Q2 of 2008. By Q2 of 2012, it fell to 19. 9%. In the smartphone category, Gartner's figures show Nokia's market share in Q2, 2008 was 47. 5%;by Q2 of 2012, it dropped to 6. 6%, according to IDC Nokia recently revealed it had sold 7 million Lumia phones after introducing them last year. But iPhone 5 sold 2 million units in 24 hours after Apple started selling it on September 14. Google, meanwhile, claims it is activating 1. 3 million Android devices every day Nokia reported a net loss of $1. 74 billion in the Q2 of 2012. In June, Moody's downgraded Nokia's rating to 'Junk'
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