So we have now seen the Nokia World announcements and news. I am sorry for this blog being almost a week behind but its again that time of heavy travel.. But anyway, so now we can see what is in new CEO Stephen Elop's magical 'secret sauce' for Nokia's future, not just in smartphones, but also for featurephones.
CREDIT WHERE CREDIT IS DUE
And some of the top-line news does seem promising. The first Windows Phone based smartphone will ship this year. It starts to sell in two weeks for example in Britain. There was considerable fear that the first Windows Phone by Nokia might be delayed till early next year, or only come out in tiny numbers right on the last days of December. Now the first phone will be out well in time for the Christmas shopping season in several of Nokia's biggest European and Asian markets.
The even better news was that Nokia was ready to announce two Windows Phone based smartphones not just one. There were other good tidbits, the moronic decision to turn Nokia's naming scheme to 'only numbers' by Stephen Elop a few months ago has now smartly been dropped and instead Nokia announced two new sub-brands of Nokia named phone series - the Lumia smartphones running Windows Phone - ie the first phone is now a Nokia Lumia 800 and the second phone is a Nokia Lumia 710. And a series of low-cost featurephones by Nokia were introduced under the Asha sub-brand. This is far smarter than the earlier decision to abandon the N-Series, E-Series, X-Series etc and only sell the Nokia 600 etc.
And on first glance, the Lumia 800 looks almost like a clone of the highly desirable (but nearly impossible to buy in most markets) Nokia N9 (which came out a few weeks ago and runs Nokia's last proprietary OS called MeeGo). The N9 had the strongest market reception of any Nokia phone ever launched and a huge buzz - creating a 5% jump in Nokia share price in just the first day of tech buzz (until CEO Elop bizarrely announced in public that no matter how well the N9 would sell, Nokia would not release any further MeeGo based phones). This new Lumia 800 has the same form factor, the identical outside dimensions in size, the same build materials, the same curved glass, and comes even in the same three colors. On quick view if on the same table, you'd be hard-pressed to tell them apart. That is certainly smart packaging by Nokia, to use some of hte buzz and good will of the N9 to help sell the new Lumia 800.
So Tomi is happy then, with the new Lumia and Nokia news? No.
THEN THERE IS THE MOUNTAIN OF BAD NEWS
So lets get real. After the rozy top-line headlines, this is now perceived as the official Nokia flagship phone. Elop refuses to let most big smartphone markets for Nokia to sell the N9 - and the Lumia 800 (which is significantly cheaper) then becomes the supposed flag-bearer for the Nokia brand for the next half year or so. It goes agains the iPhone 4S and latest Samsung Galaxies, Blackberry Bolds, HTCs, Sony(Ericsson) Xperias etc. And lets take a quick look at the Lumia 800 now that we have its specs.
SHEEP IN WOLF'S CLOTHING
We've had 3 months of drooling after the N9 with many loyal Nokia customers in leading countries hoping against hope that they can buy the N9 somewhere (apart from say Kazakhstan). And the N9 is an impressive package indeed, the 3.9 inch screen is far bigger than the iPhone's 3.5 inch screen (while the iPhone 4 and 4S have a sharper picture due to greater pixel density). There is NFC as a new Nokia premium phone offering, as well as several of Nokia's recent tech leadership items from HD TV-out to the full USB memory stick connectivity etc (ie allowing you to connect an external USB memory device to the N9 'like a real computer', not just using the phone as a memory stick). And in its style the N9 is very slick-looking using tapered design abilities to make the N9 seem even slimmer than what it really is.
Now take the Lumia 800. So it looks the same. But lets examine. The outwardly size of the handset is identical to the N9. The clever curved glass on the capacitive multi-touch touch screen is the same as the N9, so you'd of course think it has the big 3.9 inch screen.. but no. The Lumia 800 only has a 3.7 inch screen, barely noticeably bigger than the iPhone.
Then it gets worse. There is no NFC (and why?) The N9 is pentaband (5 band) GSM, the Lumia 800 is quad-band (4 band) so it connects to less networks. Then Nokia really lost it - there is no front-facing camera anymore! (Wot?)
Nokia is now regressing. The contemporary of the original iPhone 2G (ie that original iPhone from 2007 what was commonly called so radical in many markets, was actually called the 'jesusphone') by Nokia was the N95. While the iPhone 2G was slick and sexy and slim, and obviously had a far bigger screen and was touch-screen - the Nokia was years ahead on almost anything else you might want in a smarpthone. The N95 had 3G, the N95 had GPS, the N95 had a 5 megapixel camera, the N95 had MMS, the N95 shot video, the N95 was a true smartphone (yes, the original iPhone 2G was not classified a smartphone, it was only a featurephone as you could not install apps to it), the N95 had a huge app store with what back then was by far the world's biggest library of thousands of apps on Symbian, the N95 did multitasking, had a LED flash, etc etc etc.
Its not that the original iPhone 2G was a bad phone, it was a specialist ultra-cool ultra-slim featurephone that did some things the best in the world - touch screens obviously, and internet browsing, the music player, picture viewing etc. But Nokia could at least easily claim that the N95 was 'superior' on several technical fronts (every one of which Apple has since adopted to the iPhone line, so Nokia's claims would also have been justified). I am not saying one was better than the other, but its like comparing a Porsche to a Land Rover, very different types of specialist automobiles, one is better for something but the other is definitely better at something else. And for those keeping score - the Nokia N95 outsold the iPhone 2G in the first year they went head-to-head.
Same was true of each of the contemporaries of the iPhone updates. When Apple did the iPhone 3G in 2008, Nokia had the magnificent superphone, the E90 Communicator - which trumped the iPhone 3G still with many of what the N95 had introduced, but now added such improvements as the 4 inch screen size, the full QWERTY keyboard in the folder-palmtop form factor, and typical Communicator features (2 screens, 2 keyboards/keypads, 2 cameras etc). But equally, the iPhone 3G was touch screen (E90 not) and the iPhone was significantly thinner, lighter and .. far cheaper. But the E90 Communicator was the last Nokia flagship phone that was regularly rated as a better smartphone (in Europe and Asia, but obviously not in the USA where it was not sold) than the contemporary iPhone model.
Then in 2009 we had the iPhone 3GS and Nokia's unfortunate N97. The N97 was Nokia's first serious attempt at a touch screen on its flagship phone (with QWERTY slider) but the phone was seriously flawed, delayed, buggy and honestly - as Nokia VP Anssi Vanjoki admitted very candidly, they screwed it up with that model. Meanwhile this 3GS was Apple's first complete iPhone that had its birth-flaws fixed and was finally accepted in the most advanced mobile markets like Japan and South Korea and sold massively worldwide. So we know how great the 3GS was, but compare what Nokia's flagship was at least in its intended design and 'on paper' ie on its specs. The iPhone 3GS upgraded Apple's camera to 3 megapixels, Nokia had its 5 megapixels with Carl Zeiss optics and LED flash. The 3GS had 32 GB of internal storage as did the Nokia N97 but the Nokia added as usual the microSD slot with 16 GB of additional removable storage. The Apple iPhone App Store was now the world's run-away bestselling smartphone app store, but Nokia did add the N-Gage gaming platform compatibility to the N97 so at least on paper, they had access to a large catalog (or relatively old) videogames from the N-Gage portable gaming platform.
Yes, the N97 was a dog of a phone. Its touch screen was on the resistive tech, while Apple's was on the far better capacitive tech. The iPhone 3GS was as near perfection for its time that Apple had managed (bearing in mind, that the next model would bring us Antennagate to ruin an otherwise fantastic iPhone 4 launch) and the N97 was Nokia's worst flagship attempt ever. Even so - the N97 could arguably claim at least on its technical specifications dozens of areas where it 'exceeded' those of the iPhone. If that was Apple's pinnacle moment, it was Nokia's darkest moment at its flagship model stage and almost universally the N97 was crucified as a bad phone. And I have not even mentioned how horrid the first Symbian touch screen version ended up being.
Then we have the iPhone 4 vs the Nokia N8. The N8 finally did capacitive multi-touch on the finally well-performing Symbian S^3 touch screen optimized version of its software. This was the first honest attempt by Nokia to do a pure iPhone clone (ie clear touch-screen thin device with often near identical form factors and sizes to the previous iPhone 3 series, whereas Apple just conveniently moved the goal-posts with the super-sexy iPhone 4). The iPhone kept a 3.5 inch screen size but went super-sharp with its retina display. Nokia's N8 3.5 inch screen was same size but standard pixel density so the iPhone was visibly more vivid in images, videos and website pages. The iPhone 4 had upgraded its camera to 5 megapixels with LED flash and finally added the second front-facing camera, but Nokia blasted past most conteders with its 12 megapixel Carl Zeiss optics based camera and.. yes.. the real Xenon based flash. And in the 'normal Nokia features' race, could still claim all sorts of tech leads over the iPhone 4 in supporing Java and Flash, offrering the microSD slot, FM radio etc etc etc. And arguably the E7 was the sister to the N8, so with the E7 you have again the QWERTY variant and now a 3.9 inch touch screen and HD TV out etc, so again some things the iPhone 4 clearly doesn't have etc. While the N8 did not match iPhone 4 sales in the first quarter of each phone, the Nokia N8 did set a Nokia internal record for best launch of its new phone ever - and helped boost Nokia to its best quarter increasing unit sales, increasing average sales prices - and most astonishingly - also increasing Nokia profits for Q4 of 2010 (this was also Elop's first full quarter as CEO - imagine what a wonderful gift your new employer gives you, when first quarter in charge, you witness a record-setting premium phone power your company sales, revenues, average prices and profits. No wonder the shareholders loved this and rewarded Elop and Nokia with a 5% increase in the Nokia share price from when Elop had taken charge).
FIRST FLAGSHIP THAT IS LAME
If Nokia were willing to sell the N9 globally today, that would be once again a Nokia flagship that has abilities the latest iPhone 4S doesn't - like NFC etc. But now, look at the Lumia 800 vs the iPhone 4S. The iPhone camera is upgraded to 8 megapixels. Did Elop put the 12 megapixel camera from the N8 into the Lumia 800. No. The Lumia 800 is a step down - to 8 megapixels and abandoning the Xenon flash too, the N8 is back to LED flash. What has consistently been a Nokia advantage over any current iPhone, the camera, is voluntarily abandoned by Nokia.
What of the screen size, the E90 did 4 inches, and the E7 and N9 did 3.9 inches. While the iPhone 4S is still stuck to what now seems very modest sized 3.5 inches, the Lumia 800 screen has shrunk to 3.7 inches. Yes, its marginally bigger than the iPhone but the iPhone has its brilliant retina display screen.
The Apple recently went from one back-ward facing camera to two, with the second forward-facing camera to allow videocalls. Nokia has had forward-facing cameras on practically all of its 3G phones since 2005, but now.. the newest - FLAGSHIP - Nokia Lumia 800 - abandons the front-facing second camera! Wot? This is a '3G cameraphone' that doesn't do videocalls? Hasn't Elop done enough to anger his carrier community. Now he actively destroys their installed base of video-calling enabled 3G phones. What madness is this? A VGA-standard camera module is something dirt-cheap, a couple of dollars - and remember, this Lumia 800 has REMOVED components from the inside (smaller screen size, no NFC, lesser radio frequencies etc) so its not a question of being cramped in the handset casing.
Again we have the instance of Mr Outsider-Guy CEO doing something blatantly silly, that has been done BEFORE by Nokia (the early Nokia 3G phones did not have forward-facing second cameras, and the carriers hated them and forced Nokia to put them on from the 6880 model on). Had Elop not caused the exodus of Nokia executive talent, he might have learned this from the veterans. But as he encircles himself with his Microsoft Mafia, he is clearly falling time and again to group-think, severely mis-analyzing and misunderstanding the industry where his company is supposed to be a leader. This will be yet another costly mistake Elop will have to correct soon.
What else do we see on the Lumia 800? A ton of those 'West Coast' so-called 'brilliant' innovations we witnessed so far in Elop's reign at Nokia are repeated here too. No more support of microSD cards (what a dumb move). No more removable batteries (who of us hasn't run out of juice on our phones). Meanwhile, while clearly the iPhone 4S has been a rush-job at Apple after they had to re-design the intended latest iPhone (after the carriers torpedoed Apple's initial plan to do the iPhone without a physical SIM card), the iPhone 4S does more radio frequencies now, as its a dual standard phone on both GSM and CDMA networks; and adds cool new tech like Siri.
BURNING PLATFORMS NOW BURNING FLAGSHIPS
Nokia announces proudly its latest flagship. It is not just weaker than the world's bestselling smartphones - Samsungs (I won't even go to the latest Galaxy specs here) but of the standard comparison - this is the first Nokia flagship ever, that is on essentially every spec no better than - and often worse than - the contemporary iPhone. Let me put this in a car analogy. You Nokia are Mercedes-Benz. Apple is BMW. BMW announces the newest 7 Series. And what does Mercedes do? They abandon their S series, and celebrate that their top phone is the C-Series instead. The C-Series can compete against a BMW 5-Series rather well specs-on-specs and prices etc - but come on, the true rival of the 7 Series is the Mercedes S-Class, not the C-Class.
And the Lumia 800 is a far cry from the best that Nokia can do today. It is a mid-price smartphone, not a true flagship. Now, some of our readers may understand that kind of 'instinctively' but the average consumer will not. They will walk into the store, and say could you show me the newest Nokia. And then probably want to compare it with some phones from rival makers like Apple, Samsung, HTC, etc. And as most operators have stopped selling the N8 and E7 (which also are quite old, and are obviously part of 'burning plaforms' Symbian OS, so any salesguy will feel they are instantly obsolete) and in most of the world you can't even see an N9, the sales rep in the next 6 months or so, will be showing the Lumia 800, and next to it, the contemporary rivals.
At the very least, this will further damage Nokia's image in supposed 'leadership'. Almost inevitably the Lumia 800 will fail in head-to-head comparisons against the top flagships from rivals. And if the reviewer then writes that 'well, but the Nokia is a bit cheaper' - that will NOT help Nokia's failing brand image either. If it was the other way around, Nokia was seen as better but 'more expensive' at least that would help restore some of Nokia's lost market leadership position and industry tech leader position it is now completely gifting to Apple, Samsung etc.
USERS WILL DECIDE..
And this is all without touching the phone and using it. We have only seen the launch and some videos and pictures. We do know this was a rush-job at Nokia. So the testing has not been as thorough as it was with the N8 for example. It may be that the Lumia 800 exhibits some of the development problems we saw with the rushed Nokia N97. We certainly know that many loyal Nokia users - who have used Symbian for years and over many Nokia models - will find the Windows Phone 7 experience 'different'. Some will welcome it as new and refreshing - but that type of thinking is more of a young mind. Nokia of recent times is not the young person's phone. So if the user base is more adult and elderly users, they are more likely to react to ANY changes as 'inherently bad' ie 'this is not like Nokia used to be'. There will inevitably be more returns just because the Windows Phone OS will seem unfamiliar and often then perceived as unfriendly or counter-intuitive, regardless of how good or bad the Windows Phone 7.5 Mango version and its implementation on Nokia actually is.
How well will this phone capture iPhone or Blackberry or Samsung or HTC users? Not well. The iPhone 4S is clearly in a better class now. The Blackberry users want their QWERTY and silly Nokia didnt' include a slider-QWERTY variant among the first Lumia models (again, illustrating how incompetent Elop is in not understanding the industry or the core customers of Nokia - or pigheadedly refusing to listen to Nokia veteran management in helping him understand - remember, he expressed surprise in how strongly QWERTY phones sell in the featurephones segment for Nokia in Q3).
Samsung and HTC on Android have their better specs (bigger screens, microSD slots blah-blah-blah) and obviously for any current Android users looking at the Android app store space at near half a million apps, and comparing to Microsoft Windows Phone at some tens of thousands of apps - will find it quite silly to switch (today, maybe some day).
NO SAVIOR HERE
I am not saying nobody will buy the Lumia 800. We are certain to see the biggest marketing PR blitz combining the efforts and budgets of Nokia and Microsoft. The Lumia 800 will certainly sell. But no matter how much of that lipstick you put on the pig, it is still a pig. What I am saying, that there are going to be Nokia Symbian owners who will be disappointed in anything from the lame specs (who would abandon the 12 megapixel camera of the N8 or the 3.9 inch screen and QWERTY of ther E7 for example) to the unfamiliar user experience. This existing customer base will NOT transition 1 to 1 from existing top-line Nokia phones to the Lumia 800 - not even on those networks/carriers who fully market and support the Lumia. So on the networks that fully commit to Lumia 800, the transfer will be less than 1 to 1; on other networks Lumia will get weak or no marketing support and most consumers will ignore the 800 pretty much like they're now ignoring the other Symbian devices by Nokia.
And what of recapturing lost Nokia customers from iPhone and others? The N9 would have been 'THE' phone to convince lost Nokia users to 'come back' but the Lumia 800 is definitely not the phone to try that. Anyone now deciding to try a return via the Lumia 800 will be severely disappointed and that will be in the press and the salesreps will know the stories and steer existing Non-Nokia users to consider other choices.
And yeah.. the USA? It is not having this brand new Microsoft-awesome Nokia-return 'superphone' offered for Christmas - on ANY of the USA networks! This was supposed to be one of Elop's reasons why he selected Microsoft. He even appointed a Microsoft sales dude to run Nokia's USA sales. So where are the big carriers and their support of Lumia 800? Nokia went as far as (again Elop madness) ending all Symbian sales and support in the USA this year, in preparation of the big come-back of USA return of Nokia. Not one carrier will sell the Lumia 800 this quarter. Wot? Elop had 8 and a half months to land one carrier deal - with the full 'weight of Microsoft support' with him. Not one carrier deal ! Bear in mind, that only days before he made his crazy 'Osborne Effect' annoucement in February, Nokia HAD a confirmed launch deal of then the hot version of Symbian, S^3 and its next iteration called Anna, on what was Nokia's next 'superphone' after the E7 - the X7. And on who? No less than AT&T the primary carrier of the iPhone! But it was not AT&T who cancelled X7 launch - that confirmed deal was cancelled by Nokia (ie Elop) days before he wanted to announce his marriage to Microsoft. Nokia would have had X7 sales for 3 Quarters on AT&T this year - with full carrier subsidy - and now Elop has ZERO carrier support of Symbian and of the Lumia 800 - and all this with the backdrop that the US carriers and consumers wanted the N9 but Elop refuses to let them buy it..
THEN MORE BAD NEWS
Ok. The Lumia 800 won't save Nokia but it hopefully will sell better than the crashing sales of Symbian phones. But there was a lower-spec lower-cost 'mainstream' Lumia 710. Sure. Did you see WHEN the Lumia 710 will hit the stores? Not now in Q4. Not in Q1. Nokia says the Lumia 710 will ship in... the 'first half' of next year - meaning Q2. Expect the SECOND phone by Nokia running Windows Phone to be in select stores the earliest in about April of May of next year. That is VERY late. This Lumia 800 is a dog already even without anyone actually using it and perhaps complaining about it. But the cheaper and more mass-market Lumia 710 won't arrive until about six months from now. That is VERY slow.
And then, what of other Nokia news. Where is the Nokia 600?. This was supposed to be first Nokia (Symbian based) smartphone that used Elop's (then) new naming scheme after he killed off the N-Series, E-Series etc naming. And take a look. Several sources like GSM Arena, Phones Review etc report that the 600 has been killed by Nokia - only days before it was to ship! This is not so much that the Nokia ship is taking water and clearly sinking - now the Captain is found punching new holes underneath the waterline. What madness is to kill the phone that was ready to ship? We already know Nokia factories run so idle, Nokia is laying off employees and closing one of its factories already (PS - the Lumia phones are made by outside handset maker Compal of Taiwan - how utterly idiotic management is that, when your own factories run idle - you hire an outside factory to make your phones..)
Elop's other misadventures such as the bizarre choice to seek a new ringtone are not met with happiness either. And underneath the radar, Nokia has been firing the marketing and advertising agencies that have worked with Nokia for years - remember, the problem Elop was hired to do was to fix 'execution' problems, not try to turn premium phone maker Nokia into the mobile equivalent of low-marging PC maker Dell - and what 'execution' issue is helped if while you change your platforms - and your factories - and your naming/branding - and you scare away all competent existing managers from the inside - and you then go fire your ad and marketing agencies who at least knew Nokia and its customers etc - further diminishing any chance that Nokia might retain SOME insights it had gathered in the past 13 years of being the world's bestselling phone brand and the only one who existed over that 13 year period who had reported a profit in every quarter in its phone unit (until Elop took over obviously).
So that is what I think. Nokia has set the world-record for market share destruction in a year by a market leader - not in telecoms or tech, but across every global industry - where literally Nokia's market share in smartphones of 29% in December is 14% today - fuelled by the Elop madness. And now we see his Lumia strategy. One utterly lame mid-priced phone, that most consumers will perceive as Nokia's 'flagship' that is no viable rival to the flagships of the big smartphone rivals. Even with the biggest marketing and PR push of Nokia and Microsoft money, the Lumia 800 will not set the world on fire. It will sell in modest numbers this Quarter and Q1. What Nokia desperately needs is the next Lumia phone. Or no. What Nokia really needs is to sell the N9 globally now as its formal flagship - and also release the MeeGo powered N950 (the QWERTY variant to the N9) to boost its premium image. Unfortunately Elop's ego cannot take that, as this might be seen as showing Nokia's own OS development has been better than what Elop negotiated from Microsoft.
The first Lumia phone could have been a world-contender. In fact, it SHOULD have been. If Elop was in any way competent, it truly WOULD have been. You and I know, if Anssi Vanjoki was in charge and this was the make-or-break phone for Nokia, we would be celebrating the coolest phone ever made (think how excited we were with the N9 all while Elop tried to kill the enthusiasm). At the very least, Elop should have made it a true clone of the N9 with NFC and 3.9 inch screen and forward-facing camera etc. But no. This is a lame phone. The next Lumia is far too far in the future. Nokia will suffer more market share loss in Q4 and into Q1. The losses generated by the smartphone unit will continue. Can Nokia climb back into corporate profits for Q4 depends now on the dumbphones unit. Nokia IS becoming the Dell of mobile phones, and a slave to Microsoft's whims (not unlike Dell there too). Sad.