Nokia's new Lumia smartphones are trickling into the market
and early signs suggest they may sell well enough to give the handset
maker more time in its fight against industry leaders
Samsung and Apple.
But investors shouldn't
expect a quick turnaround for the struggling Finnish cellphone maker,
with rival gadgets like mini tablet computers vying for consumers'
attention, analysts said.
"Positive reviews are a great start but
as we have seen many times before these won't deliver strong sales
volumes on their own," said Pete Cunningham, an analyst at research firm
Canalys.
Successful sales of the latest Lumia 920 and 820 models
are crucial for Nokia's survival. The former market leader is burning
through cash while it loses share in both high-end smartphones and
cheaper handsets.
FIM Securities analyst Michael Schroder forecast
Nokia will sell 1-3 million of the new models this quarter. It sold 2.9
million older Lumia models in the third quarter, compared to Apple's
sales of around 26.6 million iPhones in the same period.
"In any case the uptake will not be massive," he predicted.
Lumia's sales could serve a verdict on Chief Executive Stephen Elop's decision in February 2011 to partner with Microsoft instead of using Google's Android or continuing to develop Nokia's own operating system.
Investors had feared poor reviews and weak sales could bring an end to the company's smartphone business early next year.
So
far, consumer reviews seem to favour the feel and look of the new
models, which include high-definition cameras and the latest Microsoft
Windows Phone 8 software.
"It (the Lumia 920) is very similar in
appearance to the Lumia 900, but has curved glass, rounded edges, and
curved back so it feels great in your hand. It is a dense device, but if
you look at all the pros and cons the heft is worth it," said a
reviewer for tech website ZDNet.
That's an improvement from the
market's reaction when the new model was first unveiled. The shares
slumped 13 percent that day with investors citing a lack of a "wow"
factor.
Make or break
Nokia is taking a gradual approach to
launching the phones, and availability is expected to vary by market for
the next few weeks, compared with Apple's iPhone models which usually
go on sale on the same day to global fanfare.
"While we are very
impressed with the hardware features of the Lumia 920 and the improved
software functionality of Windows Phone 8, we believe a focused launch
to drive steady sales growth is necessary," said Canaccord Genuity
analyst Michael Walkley.
In Canada, one of the earliest launch markets, carrier Rogers Communications
has trained its sales staff more to sell the latest Lumias than the
previous models, said John Boynton, Rogers' executive vice president of
marketing.
He predicted the phones would be popular with
first-time smartphone users, thanks to homescreens with tile-like icons
designed to help users navigate applications and functions.
"They're
a little nervous at some of the more complex smartphones that are out
there," he said. "The tile format is a really, really simplified way for
people to get comfortable using smartphones."
In France, retail
staff have become more confident in explaining Windows Phones to their
customers, according to Laurent Lame, devices marketing chief at SFR
which is the country's second-biggest mobile operator.
"They know
the product better after six months of good sales of the Lumia 610,"
Lame said, adding he was now more optimistic about the Nokia-Microsoft
partnership. "For once, with Windows 8, we are not starting from zero."
Telefonica Deutschland Chief Executive Rene Schuster said he was "very, very pleased" with the early progress of Lumia sales.
Some retailers were more cautious, however, and in some cities there were no demonstration models for customers to test.
A
salesman in an O2 store at the Zeil, Frankfurt's busiest shopping area,
said the store could take orders for the phone but could not show it.
Demand was "okay, but not huge," he said.
Analysts also expect
tough competition during the pre-Christmas shopping season from the
likes of Samsung's Galaxy S III and Apple's iPhone 5. Taiwan's HTC has also introduced smartphones running Windows Phone 8
software.
Other rival gadgets include Apple's iPad mini as well as cheaper tablets from Google and Amazon .
The stakes could not be higher for Nokia's Elop, who said in February 2011 the company's transition would take two years.
"This
is absolutely a make-or-break phone for the Windows Phone strategy,"
FIM Securities' Schroder said. "If it fails, they have to take a whole
new course."
© Thomson Reuters 2012
Lumia 920 and 820 in pics