Today's Comment: Nokia Lumia 900; smartphone theft.
- The Nokia Lumia 900 is now available in North America on AT&T's network in the US and Rogers' in Canada.
- A series of technical glitches has led Nokia to offer an extra USD100 rebate on the device, making it free on contracts this week, as both Microsoft and the Finnish vendor aim to make an impact in North America.
Today we focus on two developments:
- Nokia Launches Lumia 900 in North America: Nokia has launched its long-awaited Lumia 900 smartphone in North America, its first device to have LTE and a Windows Phone (WP) operating system. It was first launched in the US on AT&T's network at a price of USD99.99 on a two-year contract, but a series of technical glitches, which Nokia says it has resolved, has led the Finnish vendor to give a further USD100 rebate on the device, making it free for customers until 16 April 2012. Meanwhile, it has also launched in Canada on Rogers' network, priced at 99.99 Canadian dollars (USD100) on a three-year contract.
- Smartphone Theft Guidelines: The CTIA has come up with guidelines aimed at tackling smartphone theft and protecting personal data should a robbery occur. The scheme has been backed by the main US carriers and introduces five steps to be implemented by 2013: databases to prevent reactivation of stolen smartphones; notification to consumers of features to secure/lock smartphones with passwords; educating consumers about features to secure/lock smartphones with passwords; educating consumers about applications to remotely lock/locate/erase data from smartphones; and educating consumers about smartphone theft, protection and preventative measures.
Nokia and Microsoft are betting quite heavily on the success of the Lumia 900 in North America as an attempt to gain a foothold in these lucrative markets that are currently dominated by Apple and Android. AT&T has also come out strongly in favour of the device, saying it will make it a bigger launch than that of the iPhone, with reports suggesting it could spend up to USD150 million in marketing the smartphone as it is in the carrier's interest to have another strong competitor to break down the current duopoly, considering that Research In Motion (RIM) is still struggling.
The technical difficulties encountered by some consumers at launch, where faulty software caused memory management issues, wasn't the start that either company wanted as the Lumia 900 really needed to make a strong positive impression on end-users, but the quick reaction of Nokia in resolving the fault and offering an extra rebate could be the boost it needs after this false start. This makes the Lumia 900 effectively free on contract for the next few days—an attractive proposition for consumers looking to change devices or move towards a smartphone, but who weren't convinced of the necessity of paying a price for the device on top of a greater monthly plan.
Nokia and Microsoft are looking to gain market share from Android and RIM rather than Apple, especially as AT&T has sold 17.5 million iPhones in 2011 and all of these subscribers are still under contract, but there still remain weaknesses. The WP ecosystem offers far fewer apps than its competitors—there are 80,000 apps in Windows MarketPlace compared to half a million for Android—and this lack of choice could lead consumers away, even though Nokia and Microsoft have tried to remedy it by incorporating some leading services. A second weakness concerns its lack of availability. The Lumia 900 is a GSM device, making it incompatible with the largest network in the US, Verizon, although the exclusivity may have convinced AT&T to spend as much as it did in the short term. Nokia will have to make its future devices compatible with more carriers if it wants to be truly successful in the market, as even Apple has increased its footprint thanks to the CDMA version of the iPhone. The future Windows 8 operating system is reported to be CDMA-compatible, which will increase its addressable market, but Nokia still remains in a precarious position. The launch of the Lumia early in the quarter seems to indicate that the company expects its first-quarter 2012 results to remain tough.
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