WP8 may be last throw of the dice for Nokia

Nick Dillon/Ovum
25 Oct 2012

With Nokia having pinned its entire smartphone strategy on Microsoft’s mobile platform, the launch of Windows Phone 8 on October 29 will be crucial for the company.

Coming just days after the anniversary of the launch of Nokia’s first Windows Phone devices, the company is no doubt hoping that the update will provide a kickstart for the relaunch of its smartphone business.

With the Nokia Lumia 920 and 820 handsets due to go on sale in early November, Nokia is expected to benefit from Microsoft’s huge advertising push (reportedly in the region of $1 billion) for the accompanying Windows 8.

Nokia pins smartphone strategy to Windows Phone

Nokia is unique in that it is the only vendor that has adopted Windows Phone as its sole smartphone platform. In 11 months, Nokia has managed to sell a reasonable number of its Windows Phone Lumia devices, though the 9.9 million is certainly not a roaring success especially when compared with over 100 million iPhones and over 100 million Samsung smartphones sold over the same period.

While it can been argued that Nokia was playing catch-up with its first round of devices (it was late to the Windows Phone game and only released its first device in November 2011), the same cannot be said of Windows Phone 8 as Nokia has had a chance to fully prepare for this launch. If the new Windows user-interface design does not resonate well with customers, not only will this be disastrous for Microsoft, but it could also spell the beginning of the end for Nokia.

Time is running out for Nokia and speed is key. While Microsoft has the reserves to allow Windows 8 and Windows Phone 8 to be relatively slow burners, the same cannot be said for Nokia. Failure in the smartphone market would leave Nokia with only its feature phone business to fall back on.

Given that the market is shifting inexorably to smartphones this is a shrinking opportunity. Repositioning its touchscreen Asha handsets (which are based on Nokia’s S40 feature phone platform) as smartphones (as the Nokia Mobile Phones business is currently attempting to do) will not change this situation.

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