Nokia launched its first mobile phone — the Mobira Talkman — in 1984. Weighing just over 11 pounds (about 5 kg), the phone was revolutionary for its time.
Nearly three decades later, the Finnish handset maker, battling for survival in a highly competitive smartphone market, is betting big on the new Windows 8 phones to revive its fortunes.
But has the Finnish handset maker done enough to make up for lost space? Analysts and investors don’t think so.
The handset maker’s share price began to slide midway through the Lumia launch event in New York on Wednesday, and by the close of trading on Wall Street had lost a full 15.9 per cent of its value.
“The launch has disappointed investors because the phones really do not have any new features that can make them the best-seller,” says Faisal Kawoosa of CyberMedia Research.
Neil Mawston, an analyst with Strategy Analytics, said Nokia’s new smartphones held no real surprises and lacked a “wow” factor. “The devices that were launched were more of an evolution rather than a revolution,” Mawston was quoted in international media. “This was a baby step for Nokia and Microsoft and not really a giant leap like some were hoping.”
Huge challenge
For Nokia, the new Lumia phones are critical as it faces huge challenge from Android-based phone makers and Apple. Android and Apple devices dominate in smartphones, with 85 per cent of the worldwide market combined, according to IDC.
While Samsung on Thursday said it has sold 20 million units of Galaxy S III phones within 100 days of launch, Apple is all set to launch the iPhone 5 next week. “Consumers would wait to see what the iPhone 5 has to offer before they look at Nokia’s Windows 8 phones,” said Kawoosa.
Nokia had launched its first Windows phones late last year under the Lumia brand as part of a long-term alliance with Microsoft. Nokia sold four million Lumia phones in the second quarter, compared to 26 million iPhones that Apple sold and 50.5 million smartphones sold by Samsung during those three months. Nokia’s global market share shrunk from the peak of 40 per cent in 2008 to 29 per cent in 2011.
Opportunity for nokia
But analyst at Ovum reckons that there’s an opportunity for Nokia given the ongoing dispute between Samsung and Apple on patents.
“There could be also a real opportunity here for Nokia and Microsoft to exploit any shortage of Samsung’s Android-powered smartphones in the market following the US court ruling against the Korean giant in its patent dispute with Apple, although anything too blatant on that front would seem like a low blow,” Tony Cripps, principal analyst at Ovum, said.