Do we trust Microsoft to know what's good?

The conflicting reports on sales of Nokia's Lumia 800 Windows Phone reflect some interesting attitudes to both Nokia and Microsoft. Despite positive reviews for the new phone, two US analysts panned the sales prospects and gave the Nokia share price a good kicking in the process.
Written by Simon Bisson, Contributor and  Mary Branscombe, Contributor

The conflicting reports on sales of Nokia's Lumia 800 Windows Phone reflect some interesting attitudes to both Nokia and Microsoft. Despite positive reviews for the new phone, two US analysts panned the sales prospects and gave the Nokia share price a good kicking in the process. Their sources? An analysis of Google Trends and an unnamed source of what they claimed were early sales figures, plus an opinion that amounts to 'a nice Windows Phone from Nokia isn't different enough from any another Windows Phone handset and they haven't been selling'. That leaves out one really important thing Nokia brings to Windows Phone; marketing muscle. As the phone hasn't gone on sale in the US, US analysts may not have spotted that marketing. And with multiple UK and European carrier sites listing the Lumia as their second-best-selling phone for the week (right after the iPhone 4S - something Microsoft could only dream of with previous handsets) I think it's too early to call sales disappointing. They might fall off after the initial interest, or the buzz might continue. And there is a buzz, not just amongst journalists, but among phone buyers I've seen trying handsets out or pointing to them in window displays as they go past.

But the reactions to the analyst predictions reveal some interesting underlying attitudes. The issue is not just that the US market (where Nokia has had terrible sales for some time) needs convincing. It's whether we trust Microsoft to pick a winner - or to recognise when it has one.

Despite the record-breaking sales of Kinect and the run of top-selling months for Xbox and the popularity of Windows 7, we don't trust Microsoft when they say something is good. It doesn't help that Steve Ballmer has not unnaturally played down the potential of the competition. You don't expect a CEO to say 'sure, the competition is going to be hugely successful and outsell us easily' but by discounting the iPhone and iPad, Ballmer also made it sound like he didn't understand the market.

The ongoing debate about the Metro start screen in Windows 8 is another good example. We know we haven't seen the finished design (the Windows team rather assumes everyone knows we never see the final look this early and they should gave been pointing this out far more clearly). And having had touch screens for a couple of years, I'm convinced they are going to be ubiquitous. But a lot of people don't trust Microsoft to be right about that, or to get the Metro portions of Windows 8 right - or to know whether the all-important launch device from their flagship phone partner is good enough to wow the market.

The analysts complained that Nokia hadn't actually differentiated the Lumia 800 from other Windows Phone handsets. Joe Belfiore, one of the senior people on the Windows Phone team, can say that yes, he thinks Nokia CEO Stephen Elop is perfectly justified in calling the Lumia 800 the first "real" Windows Phone because of how well it packages up the benefits of the platform with extra, exclusive services - but for plenty of people that carries no weight.

Some of that is a perfectly valid application of the Mandy Rice Davis principle ("well he would say that, wouldn't he," she declared in court) but many people don't dismiss Apple's claims to have a magical new device with an appealing design in the same 'prove it' manner.

From the beautiful photos on the Bing home screen to the really innovative experience with Kinect to the whimsical and effective design of Windows phone, Microsoft has spent the last couple of years proving that actually, it does get design, it does know a good thing when it sees it and the company can apply quality control to products. Would Microsoft really have been cheerleading for the Lumia 800 if it wasn't actually a good product?

Beyond the bottom line of the business relationship, there's plenty of 'new-relationship energy' between Nokia and Microsoft; it's like watching a blind date turn into love at first sight. The design teams are clearly delighted at how easy they're finding it to work together and how many things they have in common. As Nokia's head of design Marko Ahtisaari (who you may know better as the co-founder of Dopplr) put it; "we wrote down our design principles and so did Microsoft; we use different words but the principles are exactly the same". Microsoft calls Windows Phone 'people-first'; Nokia puts connecting people at the top of its list. The Windows Phone team is a little obsessive about the value of typography for making the interface look good; the Nokia designers are the same way about materials and design.

Two companies that few people would call trendy and that may have hooked up out of necessity are discovering that the other person gets them in all the important ways and that they can produce something good and recognise when something is done well.

But for a lot of people, beyond having to make up for the sins of the past, Microsoft still has trouble being seen as a company that knows what it's doing. Can anything fix that?

Well, record-breaking sales for the Lumia wouldn't hurt. We're not likely to hear about those before January because Nokia won't have the figures till then (the phone isn't even on sale in several of the key markets where it will launch this autumn, which makes comparisons with the on-sale-around-the-world iPhone 4S somewhat invalid). But waiting to see isn't fashionable in this age of off-the-cuff judgements.

Mary Branscombe

Editorial standards