iPhone crushes N8 in Europe; but hope exists, claims analyst

The iPhone is outselling Nokia's flagship N8 smartphone by six to one in Europe. This disheartening research data, revealed by Morgan Stanley, comes despite the N8 supporting most of the important features wanted by smartphone users.

According to Morgan Stanley estimates, Nokia will sell 2.5 million N8 handsets in the fourth quarter of this year, compared to the iPhone's 16 million. But, the situation will worsen next year with around nine million N8s being purchased, against 72 million iPhones--a ratio of eight to one.

However, Morgan Stanley analyst Patrick Standaert cautioned against declaring the N8 a disaster. While the smartphone might appear to be struggling, the researcher claimed that the N8 was meeting its shipment targets, and that Nokia had "never expected the N8 to be an 'iPhone killer'."

Regardless of the low sales volumes, Standaert believes that the N8's features measure up well in terms of customer expectations. "The N8 scores highly on most key handset features except apps. However, with more than 400,000 developers on Qt and three million [Ovi] downloads a day, Nokia is showing some encouraging improvements on this front."

The N8 is managing to succeed in the UK, with it being the third best selling smartphone behind the iPhone and BlackBerry Curve 8250. Overall in Europe, the Nokia handset lags in sixth place behind the iPhone, Samsung Tocco Lite, Samsung Galaxy S, Nokia 5230 and BlackBerry Curve.

Given that the N8 is a relatively new device, Morgan Stanley believes it has the potential to help Nokia grow its share of the smartphone sector. However, its research shows that early success is critical to widespread uptake.

"An increased marketing push could improve N8 sell-through," said Standaert. "Our survey respondents highlighted limited awareness as a key reason for customers not buying the N8, particularly in Spain, France and Italy."

On the positive side, Morgan Stanley found that nearly half of the retailers and operators questioned for the research intend to promote the N8 until January 2011.

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