Nokia Revives Smartphone Business with Microsoft Alliance

Strategic Insights -

Nokia, the Finnish cellphone maker, has made a major push into the smartphone market with the introduction of two new devices, the Lumia 800 and the Lumia 710. The phones, the result of an eight-month collaboration between Nokia and Microsoft, are aimed at reviving Nokia's market leadership and extending Microsoft's software business to mobile devices. The new lineup aims to revive Nokia's tarnished reputation as an innovative force in mobile phones and has been met with positive reviews, but faces an uphill battle to catch Apple and Google.

Key Takeaways:

  • Nokia introduced two new smartphones, the Lumia 800 and the Lumia 710, as part of its alliance with Microsoft, in a bid to recover its market leadership and extend Microsoft's software business to mobile devices.
  • The Lumia 800, a €420 flat-screen device, and the Lumia 710, a €270 midrange handset, are being sold in six European countries and later this year in parts of Asia, with a presentation of other smartphones planned for the U.S. market early next year.
  • The new lineup aims to revive Nokia's tarnished reputation as an innovative force in mobile phones and has been met with positive reviews, but faces an uphill battle to catch Apple and Google.
  • Nokia's new U.S. smartphones will run on high-speed networks that use the Long Term Evolution technology, as well as on 3G networks, and will be made to run on networks that use the CDMA standard, which is used by the market leader, Verizon Wireless.
  • Nokia's market share in the United States declined over the past decade by refusing to adapt its handsets to suit U.S. operators, but the company has changed its approach and is now listening closely to phone operators.
  • Microsoft is using its business connections to help Nokia re-establish and build contacts with U.S. operators, with a major push planned for its smartphones in the U.S. market early next year.
  • The Nokia-Microsoft alliance is a last-chance effort for both companies to find traction in the critical smartphone business, a segment that is now the predominant kind of cellphone being sold in the United States and Europe.

Statistics:

  • Nokia's new smartphones are priced at €420 (Lumia 800) and €270 (Lumia 710).
  • The new lineup aims to revive Nokia's tarnished reputation as an innovative force in mobile phones.
  • Microsoft's Windows Phone operating system has a 2% global market share, according to International Data Corp. (IDC).
  • Nokia's market share in the United States declined over the past decade due to the company's refusal to adapt its handsets to suit U.S. operators.
  • Nokia's new U.S. smartphones will run on high-speed networks that use the Long Term Evolution technology, as well as on 3G networks.
  • Nokia's new U.S. smartphones will be made to run on networks that use the CDMA standard, which is used by the market leader, Verizon Wireless.

Sources:

  • The New York Times
  • Nokia
  • Microsoft
  • Canalys
  • International Data Corp. (IDC)
  • Strategy Analytics
  • Lee Munder Capital
  • Reuters