Nokia's Lumia 900 on AT&T is currently an Amazon best seller. An Easter Sunday quiet launch rebounded on Monday. And perhaps Nokia, AT&T and Microsoft can make Windows Phone devices a player in the U.S. The big question for Nokia watchers revolves around one word: Volume.
When Apple launches a new iPhone it's a short waiting game to see the release noting that the company sold a million units. The unfortunate reality for the rest of the smartphone players is that 1 million units in any market takes a while.
Swedbank analyst Håkan Wranne sums up the volume issue:
The Nokia story is all about Windows phone volumes at the moment and as the company is putting its entire marketing muscle behind the project we feel confident that it will ship decent volumes this year. Whether Nokia will be a long-term success story is anyone’s guess at this point but in the short-term Lumia volumes is the key.
In other words, Nokia needs phones in the field everywhere. The smartphone manufacturing game revolves around scale. If you don't make enough units you're toast. Ask HTC, Motorola, RIM or any other smartphone maker not named Apple or Samsung.
CNET: Review: Nokia Lumia 900 (black, AT&T) | ZDNET: Can Microsoft change the Windows Phone app conversation? | Review: Can the Nokia Lumia 900 win over business users? | The Nokia Lumia 900 will be a hot seller on AT&T (review and gallery)
Wranne said he expects Nokia to ship a "respectable" 27 million Windows Phone units in 2012. In Europe, the Lumia launches seem solid. Nokia just launched the Lumia in China. And Nokia is setting up other markets such as Canada.
If---and that's a big if---Nokia can make a splash in the U.S. it can use that momentum going forward. And the stars are lined up for Nokia. Carriers and retailers want more leverage on Apple and its hefty subsidy costs.
Deutsche Bank analyst Kai Korschelt said that the Lumia 900 launch with AT&T may tell the tale of 2012.
With strong carrier support and growing consumer interest in the device, we estimate up to 680k quarterly unit sales are possible vs. estimated bear case sales of only 140k. Yet we remain concerned about high competitive intensity and lack of general consumer interest in the Windows Phone OS.
Korschelt's assumptions on Nokia units are notable. Here's his rationale:
We estimate AT&T currently sells ~10m smartphones per quarter, of which the iPhone makes up c. 80%, with Android and Blackberry capturing the balance. If we assume the Lumia 900 could convert 5% of iphone sales, 15% of Android and 20% of Blackberry sales, then Nokia could ship ~680k quarterly units at AT&T.
If those assumptions don't play out, Nokia may only ship 140,000 units in the quarters ahead. Certainly, Nokia can poach a few BlackBerry customers. The big wild card is whether Nokia can swipe a few iPhone and Android loyalists.
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