O2 UK says no to Nokia's Lumia Windows Phones

Telefónica's O2 UK is not on the list of UK operators that will sell Nokia's flagship Lumia Windows Phone smartphone range.

Nokia spokesman Mark Squires confirmed to The Inquirer that Vodafone, Orange UK, T-Mobile UK and 3UK will sell Nokia's Lumia Windows Phone smartphones. Just two retailers--the Carphone Warehouse and Phones 4U--will be able to offer SIM-free and contract Lumia smartphones.

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

"The fact is though that the vast majority of the operators and major high street retailers have taken up the product and are throwing their support behind it," Squires said. "Therefore we are making sure that by using these channels the Lumia 800 will be available to our customers in the widest variety of outlets from SIM-free to contract."

O2 UK is believed to have had issues with Nokia's terms for the devices, claiming they were too severe for the operator in terms of stock levels, sales volumes, store displays and marketing campaigns. The exclusion of O2 UK from this list comes days after Telefónica's UK general manager for devices, Simon Lee-Smith, told Telecoms.com that Nokia's high-end handsets were "not yet at the right price point," adding: "If Nokia wants to sell in volume, they need to bring out devices which are cost-competitive."

Nokia said in October when it introduced the devices at its Nokia World conference in London that it would sell the high-end Lumia 800 for around €420 (£357) before taxes and operator subsidies, and that the mid-range Lumia 710 would sell for €270 (£230) before taxes and subsidies.

This criticism follows O2 UK not being invited to a pre-launch event hosted by Nokia CEO Stephen Elop where other UK operators were given a preview of the new Lumia range, and more recently Telefónica announcing that it was planning to reduce its handset portfolio for 2012 by around 60 per cent.

Commenting on the European price Nokia has set for the Lumia, Lee-Smith claimed that handset vendors typically have unrealistic expectations of what operators and consumers will pay for smartphones.

"All device manufacturers seem to think that a €400-plus device is the norm. Well, it isn't," said Lee-Smith. "Customers and operators won't pay that cost for a device which doesn't differentiate sufficiently."

Of note, the Telefónica exec concluded that operators, and in particular O2, wouldn't pay a premium for a smartphones with larger screens or high-resolution camera functions. "Let's not let the technology and cost curve get ahead of the demand curve," he said

For more:
- see this Inquirer article
- see this Telecoms.com article

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