Nokia has apparently failed to 'Wow!' with its latest Lumia offerings and so the MicroNok alliance strategy will again be up for review - at least by those on the sidelines like ourselves. But what should Nokia do? What's your strategy? Report by Martyn Warwick and I.D. Scales.
We know that Nokia is in trouble but the market reaction to the New York launch yesterday of two new smartphones, the Lumia 920 and the Lumia 820, beggars belief. Incredibly, whilst the handsets were being unveiled, the company's share price collapsed by 10 per cent. By the end of the trading day, the stock had plummeted by close 14 per cent. At one point Nokia's share price was US$2.38! How are the mighty fallen.
As if things weren't bad enough, a controversy over fakery in Nokia's ads for the Lumias broke out (see - N is for Nokia, F is for Fake).
It seems irrational that such a big, important and still relevant company (despite its current travails) should get such a hammering when no-one had yet had the opportunity to examine the new phones in detail, deconstruct them and come up with a sensible and considered analysis of what kind of an impact they might have in a febrile sector.
Was it knee-jerk reaction because the devices aren't iPhones? Has the market got such a downer on Nokia that it has already decided that it's a goner - dead as a dodo but not aware of it yet?
The fact is that Nokia's reputational stock is now so low that anything short of a huge 'Wow' (which after all is what we were promised) is a 'fail'. Just to get to an even chance of success Nokia had yesterday to lift the covers on at least two (ideally half a dozen) real hit devices.
Instead there was a palpable sense of 'rush them out to meet the date': the announcement was certainly 'pre' and that's bad in this market but excusable if you have pricing and a launch date. Nokia had neither and, as many observers pointed out, this is not a blunder that Apple or even Samsung will make in the coming months. Apple announces and then arranges for queues to form.
Perhaps most worrying there was no cheer-squad of mobile carriers up on stage with Elop and no concrete announcement of carrier support - which leads these writers, and a good few stock analysts as well, to conclude the obvious. Still smarting from the relative failure of the previous Lumias (despite huge marketing efforts) perhaps some key mobile telcos are waiting to see what the reaction to the new Lumias actually is before they start signing on the dotted line, which is why the carrier strategy is to be announced in a few weeks time?
If so that was enough to turn the stock market skittish and Nokias share price dropped accordingly.
And what of the devices themselves - how are they being received? Most of the informed comment seems to be that these are a decent effort but that much marketing will be needed if Nokia is to catch up with its rivals.
But some commentators don't buy the let's wait and see position at all.
Nokia's (or rather Elop's) critic-in-chief, ex Nokia exec and blogger, Tomi Ahonen is unmoved, styling the new Lumias 'Failure Version 2.0'
. Tomi laments the absence of any qwerty keyboard Lumias, pointing out that something like 62 per cent of smartphones today are not touch-screen-only.
Why doesn't Nokia try and retain this huge market?
He acknowledges that these Lumias are better than the ones before but maintains that the Lumia line is still in catch-up mode with Nokia's earlier phones (never mind the competition's) to which they can be compared unfavourably.
And of course, when the iPhone 5 and new offerings from Samsung and HTC arrive over the next couple of months, the Lumias 820 and 920 will look even more inadequate, he says. Take all that and add in the fact that Windows Phone 8 lags way behind on numbers of apps in-store and Tomi is convinced that the Lumia strategy is destined to fail utterly.
No one can deny that the company has made some mistakes in recent years and a serial run of bad management has resulted in a paucity of vision and dithering over strategy, whilst arrogance and hubris (the 'we know what consumers want better than they do' attitude) prevailed for far too long and cost the company dear. But, that said, it would be a tragedy if Nokia goes to the wall.
OK, so chief executive Stephen Elop didn't help matters yesterday when it emerged that Nokia, as yet, cannot or will not provide price guidelines for the new devices or tell the world the date upon which they will be available to buy - apart from weasel words such as "in select markets' and 'sometime in Q4'. That sort of wooly nonsense quickly strips the gilt off the gingerbread.
At TelecomTV we don't comment very often on personal issues - such as the sartorial style of CEOs (and there's surely a doctoral thesis there just waiting for someone to start researching) - but in this case an exception is justified.
Have you seen footage of the presentation?
Stephen Elop must be aware that the only way to rebuild his dwindling credibility is to properly play the part of a chief executive trying to rescue a major multinational enterprise. So why then did he decide on the unfortunate combination of a baggy pair of blue jeans, a white button-down collar shirt and a too tight suit jacket? It was lamentable and he looked like someone trying to be all things to all men, businesslike and serious for the analysts and Wall Street (from the waist up) but also a laid-back fashionista who's down with the kids (from the waist down) apart from the clumpy black business shoes that might have been OK with a dark business suit. Maybe he was advised that he'd look trendy, but the fact is that he's no Mark Zuckerberg in terms either of age or street cred and it didn't work.
Mr. Elop waxed lyrical about the new handsets. "This is Lumia, the world’s most innovative smartphone,” he said, it is “an alternative to the faceless black and grey monoblocs that you see out there.” He'd know all about that, I suppose.
The size of the task facing Nokia as it struggles to compete with the likes of Samsung and Apple is astronomical. According to the company's own figures, Nokia has shipped some 7 million mobile devices so far this year. That equates to 19,000 a day. Apple shipped 61 million iPhones in just six months of 2012 - that's 338,000 a day. What's more, analysts expect the iteration of the iPhone, the iPhone 5, to sell 10 million units in the first week after its launch, which is expected to be next Wednesday.
If Nokia is going to re-establish itself in smartphones, it looks unlikely to do it with the Lumias 820 and 920.
So where to now for Nokia?
What strategy do you think it should adopt? Does it have no alternative but to continue with its current MS Windows Phone alliance with Microsoft? Should it get out and adopt Android? Should it go back and revive its MeeGo technology? Should it try a blend of all these things? Answers below.
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