Must Read: Apple to Congress: We do not use 'tax gimmicks'

Topic: Nokia

Biggest hurdle facing Nokia -- "It's Lumia or bust"

Summary: Nokia is putting all its eggs in the Windows Phone basket, and it's not paying off.

James Kendrick

By for Mobile News |

The latest financial figures shared by Nokia show the Finnish phone maker is on rocky ground. Colleague Larry Dignan has the detailed analysis that paints a dim picture for Nokia. The bottom line for Nokia can be summed up in four words, aptly penned by Dignan. "It's Lumia or bust".

Nokia has gone all-in with Microsoft and the Windows Phone platform, and not only has that so far proven futile it's not clear that can change. Windows Phone is not setting the smartphone world on fire as a platform and Nokia is paying a heavy price.

With the very future of Nokia riding on Windows Phone, Nokia is depending on the growth of the platform. That isn't happening yet, and the question is how long can Nokia ride that wave. Actually, it's more of a calm than a wave.

It's not clear how Nokia's Lumia line is doing against other Windows Phone offerings. Forget the other competing platforms and focus strictly on Windows Phone and there is no indication that Nokia is even on top of the Windows Phone world.

That's significant as Microsoft has been working closely with Nokia to get the Lumia line going. There's also that "platform support fee" of $250 million that Microsoft laid on Nokia in the latest quarter. Nokia has the best situation possible in the smartphone space, and still isn't making significant sales.

What can Nokia do to get back on track and improve its financial standing? There's not an easy answer to that, due to the near total dependance the company now has on Windows Phone. Like Dignan says, "it's Lumia or bust", and that's not necessarily a good thing.

Topics: Nokia, Banking

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

55 comments
Log in or register to join the discussion

  • Fact that Nokia is all-in gives me some confidence to invest in it myself

    If it doesn't work out, it's a disaster for Nokia. But the fact that Nokia are all-in makes it more likely I would invest some of my own companies' resources into it - this after we abandoned the Windows format for HTML5 apps some time ago.
    Outsource4
    Reply Vote

  • Yeah..

    Well, one thing is for sure, if Nokia does end up successful again, you definitely won't have ZDNET to thank for that.
    charlesdjones1
    Reply Vote

  • Solution...

    Here is the solution -> "Make better hardware" Even the Lumia handsets are well behind the current offerings from the Android and iPhone camps.

    The phones are thick, no dual core... Here are my suggestions:
    Lumia 800
    - Add front facing camera
    - Add dual core

    Lumia 900
    - Reduce size and weight slightly.
    - Remove ridge around glass, make smooth like the 800
    - Add dual core
    - Make phone thinner

    IF YOU WANT TO BE THE BEST, YOU HAVE TO BEAT THE BEST!
    C#2010
    Reply Vote

    • Used the 900

      Have you actually used the Lumia 900?? the thickness of the phone is what makes it feel so good in the hand, and the overall proportions (weight and size) fit most peoples hands very well. If it weighed less people (including yourself) would claim that it feels like a cheap piece of plastic. As far as adding dual core, well that is just ridiculous. It wouldn't add anything to the platform at this time, first of all because CE that Wp7.5 is base on doesn't support multi-core processors, which means that 2nd core woujld sit there doing nothing (like in so many Android devices).
      hafenbrack
      Reply Vote

      • I have both the 800 and 900

        I have the 800 and the 900 and the 900 does not feel as good in the hand as the 800. As far as dual core, the purpose is to sell phones (would u agree) and the general public will want the best spec'd out phone. Battery usage might be worst but the purpose is to sell phones! this is why Apollo supports dual cores, its the future just embrace it.
        C#2010
        Reply Vote

      • The problem with Windows Phone is that it is too efficient?

        @C#2010,

        How many people do you know care about the engine and other specifications of their cars? Most people care about only about the user experience. If a manufacturer could put in a bike engine into a car, and make it perform comparable to a Lexus, but be more efficient, believe it or not, most people would go for the bike engine car. Effectively complaining that the Windows Phone platform is more energy and resource efficient, yet comparably performant to high end competition, makes no sense to me.
        P. Douglas
        Reply Vote

      • I honestly don't think it matters to the vast majority

        P. Douglas
        of consumers. All this hemming and hawing about tech specs means little to your average consumer. No I think MS and Nokia's problem is well MS and it's recent history in mobile. MS has had a series of mis steps that has left a bad taste in consumers mouths and the consumer is not going to jump in with both feet. Instead the attempts will be far more timid and with time as MS proves itself reliable in the mobile arena sales will grow. Still even in a three horse race someone has to be thid and that's OK as long as the players are making money is it not?

        Pagan jim
        James Quinn
        Reply Vote

      • The fact that its efficient is not the prob...

        @P. Douglas
        Its not that the phone is efficient thats the problem... the problem is a sales associate says oh thats only a "single core phone" but this Android is a dual core. The consumer might not have a clue about the difference but dual registers as better than single.... The technical differences have little to due with the experience, but they are obviously effecting the sales! And I say again the purpose is to sell phones, correct?
        C#2010
        Reply Vote

      • Yep, it's ultimately about making money

        @Pagan jim,

        [i]Still even in a three horse race someone has to be thid and that's OK as long as the players are making money is it not?[/i]

        That is in fact, the most important thing. The thing I admire about Apple, is that it seems to ask the questions, "What can we do to make money while having modest market share? After this, what can we do to scale our model?" I believe Nokia is executing on Windows Phone well. If it expands further creating wonderful user experiences which elict strong emotional responses from its customers, and tries to make money from unique software and backend services, I think it will do well. I think if push comes to shove, in areas where it is persistenly having problems at retail, it could set up stalls all around the regions, and sell phones directly to customers. (Maybe Nokia would only have to do this temporarily.)

        Nokia could also go into the tablet / convertible market, and use a similar approach.
        P. Douglas
        Reply Vote

      • I think it would be better if MS / Nokia used a catch phrase

        @C#2010,

        [i]The technical differences have little to due with the experience, but they are obviously effecting the sales! And I say again the purpose is to sell phones, correct?[/i]

        It would probably be better and simpler if MS and Nokia came out with the pithy phrase, "It's not about the specs, it's about the user experience."
        P. Douglas
        Reply Vote

      • Re: I have both the 800 and 900

        @C#2010 So, your argument is, even if Windows CE doesn't support a second core (hafenbrack's argument, whom you replied to), and it will bring down battery performance (your words), throw it in anyways because that single stat will somehow magically sell phones? You have got to be kidding me.
        WebSiteManager
        Reply Vote

      • Nokia phones spec

        I have been long time Nokia user. Any phone Nokia has made has been more or less modest on CPU spec. They may have great radios, some have stunning cameras (N8) etc, but they have always had slow CPUs!
        This applies to all phones, not only the high-end smartphones.

        This would be ok, if every other phone around was just that slow. But many aren't. There are some very snappy phones out there and if you do ANYTHING with the phone, other than tap the answer button to answer calls, it matters.

        Nokia should have opted for faster CPU, indeed. If they had dual core CPU, I believe Microsoft could at least hire someone to patch CE core to gate the second CPU so that it does not use any power, if they can't make any user of it.
        danbi
        Reply Vote

    • The Solution?

      Removing a ridge, a "thinner" phone, and reducing size and weight "slightly" will be THE SOLUTION? You don't even believe that yourself.
      WebSiteManager
      Reply Vote

      • The solution?

        @WebSiteManager
        Those are just a few suggestions, but the overall idea is that the hardware needs to be first class. Im not going to buy a 2010 Ferrari in 2012 for the same price as the new model...
        C#2010
        Reply Vote

    • The USER experience

      @P. Douglas
      "It's not about the specs, it's about the user experience."

      Have you even used a windows phone... The user experience is far better than anything Android has to offer and in many ways a huge improvement over iOS. So I don't agree with your agument... I think the hardware needs improving more than the software... Just my opionion.
      C#2010
      Reply Vote

  • It does not have to be Lumia or Bust, that is Elop's decision...

    If Nokia does go bust, Elop will walk away rich. The rest of the employees there are the ones who will be hurting. Symbian and/or Meego are still there and ready to shoulder much of the load until Windows Phone OS brings something significant to the table that people really want/need and it can be packaged into a Nokia phone that also differentiates itself. Windows Phone is not horrible, it just doesn't seem to be a game changer at this point. One final thing that MAY be able to keep Nokia in the game is if they sold the Lumia 900 phones (after AT&T exclusivity is up) for about $200 unlocked (much like what happened with RIM Playbook). They might be able to build some more momentum by doing that.
    jkohut
    Reply Vote

    • Check the Facts instead of Speculating

      Symbian's quick decline caused the shortfall, and the Lumia devices are off to an excellent start. Obviously, a product that has been in the market between two weeks and 5 or 6 months is not going to single-handedly turn around a company's fortunes yet.
      WebSiteManager
      Reply Vote

    • Symbian

      @ WebSiteManager

      Symbian had quick decline, because Elop insisted that Nokia will kill it in favor of Windows Phone. This is the stupidest move Nokia has made, ever.

      I doubt Microsoft paid them that much.
      danbi
      Reply Vote

  • Silver Bullet

    It is funny, we are less then two weeks into the launch of the Lumia 900 here in the U.S. and bloggers like James expect a complete turn-around. It took Android two years to catch up to the iPhone and you want Microsoft and Nokia to do it in less then two weeks!? Be real. There is no silver bullet. Windows Phone is a great OS and with both Microsoft and Nokia behind the product it will slowly but surely gain marketshare.

    Most U.S. customers are on a 2 year contract, meaning with in a two-year time span everything can change, not two weeks.
    clcrockett
    Reply Vote

    • Exactly

      Anyone I've shown it has been impressed, but they're not going to sell their iPhone 4 at a loss and break their contract for it.
      WebSiteManager
      Reply Vote
CNET Join | Log In | Privacy | Cookies Close