It's too soon to bet that Nokia's on the road to recovery after its new
Lumia smartphones were sold out in many stores across Europe and
America, as retailers say supplies have been short ever since their
launch.
The Lumia 920 and 820, which use Microsoft's latest Windows
Phone 8 software, were launched last month with expectations of a "make
or break" for Nokia, once the undisputed leader in mobile phones, now
losing share in smartphones and lower-end handsets.
Positive
online reviews and anecdotes of waiting lists for the 920, as well as
Nokia's sales deal with China Mobile announced earlier this month, have
helped Nokia shares rise over 40 percent in the past month.
But
analysts say there's no proof that Lumia phones are making significant
inroads on market leaders Samsung and Apple or that Chief Executive
Stephen Elop's risky strategy of betting the company's future on Windows
software was paying off.
"I think people are looking and saying,
'Hey, there aren't enough 920s in the market', but the reality is that
the volume is so small. It's not going to move the needle," said Pacific
Crest Securities analyst James Faucette.
Most analysts forecast
Nokia will sell around 5 to 6 million Windows Phone devices in the
fourth quarter, with over half of them older versions of Lumia, which
have been heavily discounted.
That would be better than the 3
million Lumia smartphones sold in the third quarter, but it pales in
comparison with Samsung, which champions Google's Android system and is
expected to ship 60 million smartphones in October-December.
Improvement from low base
Supplies
of the new Lumia models appeared to be trickling back into U.S. stores
this week after being unavailable at many stores since their November
launch.
Best Buy's website showed 920s in stock, and Amazon listed
them as the No. 2 best-selling AT&T phone on Tuesday, though they
were still sold out in many European markets including Nokia's home
base, Finland.
The company's flagship store in downtown Helsinki
said there would be a wait of a few days for the Lumia 920. Finnish
telecoms company DNA said "many hundreds" of customers were still on its
waiting list and that the backlog was unlikely to be cleared before
Christmas.
"The situation is that we still don't have the 920s,"
said DNA retail executive Sami Aavikko, saying consumer interest in
Lumia had improved with the newest models while declining to give sales
figures.
Some sources said one problem has been a shortage of
Qualcomm chips. Qualcomm CEO Paul Jacobs said in November it would be
"exiting the calendar year with supply and demand more evenly matched",
and a spokeswoman declined to comment further.
Elop told Finland's
public broadcaster YLE on Tuesday there was "very positive activity
underway" with Lumia sales. Nokia has declined to comment on sales data
or confirm any component shortages, and a spokesman said it was "working
very hard to get devices into the hands of consumers as quickly as
possible".
Given low supplies, however, analysts said it was hard to gauge the real level of demand for the new Lumia phones.
Some
industry executives and analysts have said consumer recognition for
Windows Phones has improved thanks to spending on billboards and other
advertisements over the past month.
"Are they lining up like they
do for the iPhone? No. Are sales covering our costs, for instance
marketing? Yes," said Deutsche Telekom Germany's marketing chief,
Michael Hagspihl.
Many telecoms carriers as well as network
equipment executives are hoping the Lumia succeeds, to prevent Samsung
and Apple from gaining too much power.
Nordea analyst Sami
Sarkamies was one of the more optimistic analysts, saying investors
should focus on the improvement, albeit from a low base.
"My take
is that there we have a seen a pretty substantial development since last
year," he said. "Previously there hadn't been that market pull."
Two year transition
With
Nokia burning through cash and having already sold off assets such as
its head office, muddling along with modest sales is not an option. Some
investors have said they want to see quarterly Lumia sales of around 10
million.
Many believe Nokia will need to change its strategy -
and its leader if there is no clear improvement in Lumia sales in the
coming quarters.
The company has not set any targets, but Elop
said in February 2011 that the company's transition would take two
years, which leaves precious little time.
"I think they have more
hard decisions ahead of them; not only what they do from a leadership
perspective and strategic perspective, but also with whom they align
themselves," said Faucette at Pacific Crest.
Speculation of a
buyout by Microsoft have periodically lifted Nokia shares, but with so
much uncertainty over future sales, few analysts recommend pricing in
any potential buyout premium.
The market's average price target
was around 2.30 euros, according to Thomson Reuters StarMine. The shares
were up 8.1 percent at 3.21 euros late on Tuesday afternoon, breaking
the 3 euro barrier for the first time since April.
© Thomson Reuters 2012
Lumia 920 and 820 in pics