Nokia's Elop sets sights on enterprise market, as analysts worry about lack of 5-inch Lumia

Tools

Nokia (NYSE:NOK) CEO Stephen Elop said he is confident that the company's Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone can help the platform grab more market share, and said he is focused on the enterprise market as a major opportunity. However, analysts are worried that Nokia's lack of a 5-inch superphone to compete with the likes of the Samsung Galaxy S4 may be holding the company back.

"When we think about the milestones along this journey we are very focused on first getting to a double-digit market share, talking about Windows Phone collectively," Elop told The Guardian.

Research firm Gartner reported that Microsoft captured 3 percent of the global smartphone market in the fourth quarter of 2012, up from 1.8 percent in the year-ago period. IDC reported similar numbers, giving Microsoft 2.6 percent of the global smartphone market in the fourth quarter, up from 1.5 percent in the fourth quarter of 2011. And in Kantar Worldpanel's latest assessments from February, Windows Phone's share of the U.S. smartphone market rose to 4.1 percent year-over-year from 2.7 percent.

"Now we have to see if that builds and grows," Elop said. "It is about showing progress, strengthening the brand, improving the financials. It's hard to predict what rate over what time."

Elop seemed to indicate that Nokia has its sight set on taking advantage of BlackBerry's (NASDAQ:BBRY) transition to BlackBerry 10, and hopes to pick off some enterprise customers. "Virtually any [head of IT] out there today is probably thinking pretty hard about the investments they've made in a competing platform for business mobility," he said, while declining to name BlackBerry specifically. "This is an interesting time to reconsider what's the next generation, and of course we're looking at that as a real opportunity. It's a moment, it's a point of disruption."

Yet at the same time, analysts are worried that Nokia may have a big hole in its lineup: a 5-inch, high-end device. Nokia's flagship Lumia 920 has a 4.5-inch screen. Meanwhile, the fast-selling  Samsung Galaxy Note II has a 5.5-inch diagonal screen, the forthcoming Samsung Galaxy S4 has a 5-inch screen and the HTC One has a 4.7-inch screen.

"This is a trend that can't be missed," IDC analyst Francisco Jeronimo told Bloomberg. "People are using smartphones in different ways now, consuming media by streaming over faster mobile networks. A 5-inch screen for a smartphone just feels right in the hand."

Nokia spokesman James Etheridge declined to comment on plans for bigger-screen smartphones and tablets, telling Bloomberg that the company is still assessing consumer interest in them.

While larger-sized screens are certainly a hot trend among smartphone makers, not everyone has embraced it. Apple's (NASDAQ:AAPL) iPhone 5 has a 4-inch screen and Apple was the largest U.S. smartphone maker in the fourth quarter and the second largest in the world behind Samsung. At the same time, Google's (NASDAQ:GOOG) Motorola Mobility sells the 4.7-inch Droid Razr Maxx HD, but Motorola is no longer considered a mobile phone powerhouse.

Yet other companies are moving toward devices with even larger screens. ZTE's Grand Memo has a 5.7-inch screen and Huawei's Ascend Mate has a massive 6.1-inch display.

For more:
- see this Guardian article
- see this Bloomberg article

Related Articles:
OpenSignal: Adding a square inch to phone screen leads to 75 MB of extra data per month
Nokia warns that a Microsoft Surface smartphone is a risk
Nokia's Elop sees 2012 pay package slashed by 45% amid financial struggles
Nokia to focus marketing more on products and features, less on Lumia brand
Nokia debuts feature-rich, lower priced Lumia 520 and 720 Windows Phones
Nokia's N. American handset sales jump to 700,000 in Q4, firm posts profit