Analysts: Nokia faces uphill challenge with new Windows Phone

Nokia has marked the start of its fight-back with the announcement Wednesday in London of its first handsets supporting Microsoft's Windows Phone (WP) operating system.

Nokia Lumia 800

Click here for pictures and specs of Nokia's Lumia 800 and 710.

Nokia CEO Stephen Elop, used the occasion to unveil the high-end Lumia 800 and mid-range Lumia 710 smartphones, which will go on sale in France, Germany, Italy, the Netherlands, Spain and the UK next month.

In an interview with Reuters, Elop said Nokia had undergone a significant transformation during his 13-month tenure, and was "now a different company operating on a different clock speed," he said. "The amount of effort and passion and work that's been accomplished that we were able to show off today is the best evidence of that."

While the new handsets received praise for their design and capabilities, industry analyst highlighted the critical need for these WP-based handsets to be a success for Nokia.

Commenting on the announcement, Ovum analyst Nick Dillon said: "The challenges which Nokia faces are significant--many potential Windows Phone customers will have already bought an Android or iPhone and will have some form of attachment to those platforms. They will have invested in the platforms from a services, financial (via applications) and a familiarity perspective, and as such Nokia will have a challenge to convince them to switch to what is a largely unknown, and therefore risky, alternative. For consumers, they will need to have a clear and simple answer to the question: 'Why should I buy this instead of an iPhone or Android?'"

However, Dillion did recognise Nokia's efforts to differentiate its WP-based devices from those becoming available from other WP licensees. "Nokia has included its Nokia Maps, which provides free offline navigation on both devices," he said. "Additionally, Nokia has brought its experience in imaging with an f2.2 Carl Zeiss camera which features touch to focus, a function which is unique to Nokia's Windows Phone devices."

While Neil Mawston, an industry analyst with Strategy Analytics, pointed to the new handsets not being iPhone or Samsung killers, he observed in an AP article: "But where Nokia does stand out is on their price00it looks like they are going to be very competitive."

IDC research director, John Delaney, also noted that the Lumia 800 and the Lumia 710 represent a significant move away from Nokia's usual approach. The Lumia 800 looks "slim, sleek and simple, and the smooth matte finish makes it feel very pleasing to hold," he told Know Your Mobile.

However, he added that the Lumia devices stood little chance of competing with the iPhone or Samsung's Galaxy products. "Those two franchises still have very strong momentum, and there's nothing unique about the new phone that looks powerful enough to stop them in their tracks."

For more:
- see this AP article
- see this Know Your Mobile article
- see this Market Watch article
- see this Reuters article

Special Report: Complete coverage of Nokia World

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