Oh wow, what a couple of weeks Nokia has had. A company trying to reinvent itself and staying relevant in an increasingly iOS/Android-dominated smartphone world caught the headlines mostly for all the wrong reasons. Here’s a rundown of the news and my take on the same.
Lumia 900 Announced
First, after showing the Lumia 900 at this year’s Consumer Electronics Show (CES) in Las Vegas, they finally announced the availability of Nokia Lumia 900, their flagship device for the North American markets. Pre-orders would start on March 30, at AT&T’s website, and the device would be available in stores on April 8. As a surprise they also announced a glossy white version, to be available only in stores (no pre-order) on April 22. All good news, albeit some would argue that according to leaks earlier, it was supposed to happen on March 18, so this date could be considered a “delay”. Oh well.
Then, the review embargo is lifted. Suffice to say that while generally extremely positive, there was a feeling that some of the reviewers (especially one at a very high profile site) were very critical of certain aspects of the phone and the OS. I wrote about how the Lumia 900 may have created a very high set of expectations and meeting or beating those expectations would be almost impossible. Also, the device, unlike typical iPhone releases, was not accompanied by a major software update of the Windows Phone OS. So a lot of reviewers started poking around what’s missing in the OS rather than reviewing the device itself. Bottom line, there was a lot of coverage on the stuff that was missing, instead of highlighting how, at $99 with contract, this was an excellent deal for a very well-made phone.
Launch on Easter Sunday
As the date of the launch neared, the question arose about why the launch date was chosen to be Easter Sunday, when the corporate AT&T stores are (mostly) all closed. Considering that this was a significant launch for Nokia, it was really perplexing why they would have chosen to promote the launch day when most AT&T stores would not be open. Later, reasons provided included AT&T’s rituals of refreshing store designs for Spring on a certain day, and that their promos start on Sundays. Both of these reasons did not make sense, and certainly does not apply to iPhones which typically are available on Fridays. Another disadvantage of the strange choice of availability date and promotions, Nokia arranged for a massive concert in the middle of Times Square in New York on the Friday before the phone would be available to buy. So the thousands of people who saw the concert and were made aware of the phone, were left waiting for 2 days before they could actually get one. Bizarre.
Lumia 900 Sells Well, Rates Well
Finally, as the phone launches, there are reports about the high demand and that some stores start selling out both, the cyan and the black models. The two models consistently stay on top of the Amazon.com sales charts and top-rated lists. The sales charts, updated hourly, are still showing the two models at the top, a week after launch.
Is AT&T Ready To Sell?
Not all was rosy though – there were reports about how some AT&T sales reps were still pushing people to get iPhones rather than the Lumia 900 even though the reporter specifically requested to get the Nokia phone. I personally went to two corporate stores and had no such experience, but the fact that it was even reported means the “training” that Nokia and Microsoft had promised to conduct with AT&T for their store personnel, was either not enough, or not completely rolled out. I was told by someone who is aware of AT&T’s plans that the actual promotions for the device at the stores would start on the following weekend, with employees dressed in Nokia shirts and so on.
Later in the week came news that Nokia had issued a warning about missing expected numbers this quarter (Q1) and consequently, the stock took a huge hit. Along with the warning, Nokia said that they had sold 2 million Lumia devices (note, this of course does not include the Lumia 900, which only went on sale in Q2). 2 million is a decent number for one OEM but with about 850,000 activations per day, Android can do the same in about 3 days!
After a few days of Lumia 900 being in the hands of users, Nokia announced that they had identified a memory management issue which results in the phone dropping LTE connection. They said they had identified the issue, and found a fix. That’s great, but my concern is, for such an important device, how could Nokia have missed the issue in their testing? Has the phone been rushed out? What else may be a problem that has not been uncovered yet?
Anyway, to their credit, Nokia came out and said that they will offer a free exchange of the phone for those who had already bought it. They also provided a $100 credit on the AT&T statements for everyone who bought the phone by April 21. Finally, in a stunning move (at least as it relates to Windows Phone updates by AT&T), Nokia said that the update will roll out to the phones around April 16th. The issue by itself is annoying, but the reaction by Nokia and the fact that they worked with AT&T to make this update roll out so soon, shows they do care about their customers. On Twitter, I saw several reactions similar to “I am going to be a Nokia customer for life”. It is really refreshing to see this happening to a brand that was virtually non existent in the US.
What’s more, Nokia exceeded all expectations and the fix rolled out three days early on April 13th! It is incredible how well they have handled this issue. It was of course imperative that they did, but to actually see it happen, gives customers a great deal of confidence in the brand.
NFC … in Lumia 610?
Finally, in another surprising move, Nokia announced that they have included Near Field Communication (NFC) capability in their “low end” phone, the Lumia 610. This phone, also referred to as their first “256MB phone” to denote the lower memory included in the phone, is going to be the lowest-priced Lumia device, targeted at emerging markets. What seems a bit strange, is that the NFC capability is not available on any other Windows Phone, Nokia or otherwise, and it was widely rumored to be something that would only arrive on the platform with the next big OS release, Apollo (Windows Phone 8). Not only is it coming before Windows Phone 8, but it is also coming in their budget device. Color me confused.
Here is my take on the various items:
- Day 1 Performance: Yes it is a problem that nobody thought of the holiday, but as I see it, this is a long promotional effort for Nokia. The first day and first weekend sales are metrics important only to the extremely short-sighted tech press. The promotions are going to run for weeks, and as advertising ramps up, more people will come to the stores to purchase new phones. In the grand scheme of things, the first day’s performance is not that important.
- Financials and stock performance: It is clear that Nokia has not been able to sell as many Lumia devices as they are losing Symbian devices. Not even close. As a result, their market share is dwindling rapidly which creates several cascading problems. However, changing platforms is not a simple effort and it does not happen overnight. Nokia will have to continue their execution focus, and maybe lose some non-performing and inessential assets along the way. The Lumia devices are being launched in new countries all the time, and are expanding the price range at the same time. Perhaps a new look at the company after a year may make more sense, rather than trying to measure their sales every month during the transition.
- Software bug: The memory management issue is one that bothers me a bit. It is inexcusable that Nokia was not able to identify the issue before they actually launched. Also, what was AT&T, known to be notoriously rigid in acceptance of new devices, testing and how did they not find out? Although, as a side effect, I am pleased to see that AT&T is interested in the success of the device as evidenced by the quick certification and roll out of the fix.
- NFC in “low end” phone: As for NFC inclusion in the Lumia 610, I suppose there are applications already enabled in some of those emerging countries that Nokia is targeting, which may justify its inclusion in the low-end device. In the US there is not much infrastructure set up to support NFC, so it makes sense that Nokia decided to focus on other items like LTE and front-facing cameras for this market.
As a Windows Phone user, and a new owner of a Lumia 800 (note: 800, not 900), I can say that I could not be happier to see Nokia as a pure Windows Phone OEM. HTC, Samsung and others make so-so devices (usually a copy of the corresponding Android devices), and they have other platforms to fall back on, but Nokia has only one focus and that ensures that they will commit fully to Windows Phone. It is made clear in a lot of ways – great designs of phones, fantastic set of free apps that come with the Lumia devices, and of course the influence they have been able to exert on a carrier like AT&T in the best interest of their customers.
I wish them all the best. 2012 is a crucial year, but it is only the beginning!