Is Nokia's Windows Phone Plan Doomed to Failure

Sunday Jun 24th 2012 by Michelle Maisto

NEWS ANALYSIS: Nokia, while struggling to rebuild its brand, keeps managing to dissuade consumers from buying its phone. Early advocates of the brand are feeling baffled by the recent Windows Phone 8 announcement.

Nokia and Microsoft, since announcing their partnership in February 2011, have been working to convince consumers and professionals that with their smartphone collaboration they€™re swinging for the highest fence. The partners maintain that these are phones of the most notable craftsmanship and cutting-edge technology€”phones that will compete against the Apple iPhone and high-end Android devices and re-establish Nokia as the world€™s top-selling phone maker.

It shocked many when at the Microsoft Windows Phone Summit event in San Francisco June 20, the pair, after introducing the very lovely and feature-rich Windows Phone 8 operating system and sharing that a software development kit (SDK) will arrive later this summer, confirmed that current smartphones running Windows Phone 7.5, such as the Lumia 900€”phones it seemed that sweat and tears had been shed to sell€”would not be upgradeable to Windows Phone 8.

The 7.5 handsets will instead receive an update to 7.8, which includes the Windows Phone 8 start screen€”which has been improved with, among other things, the ability to include more colors and dictate which of four size options a user would like each app tile to be€”and a few new apps.


€œWindows Phone 8 is a generation shift in technology, which means that it will not run on existing hardware,€ Microsoft€™s Joe Belfiore explained in a June 20 blog post. €œBut we care deeply about our existing customers and want to keep their phones fresh, so we€™re providing the new start screen in this new update.€

Tech writer Stephen Robinson responded as surely Microsoft and Nokia anticipated some people would. He Tweeted, €œMicrosoft blew any chance it had for me to support WP. Back to iPhone full time. Lumia few months old, won€™t get latest update. Insane.€

Technology Business Research Senior Analyst Ken Hyers, relating to the sentiment, says he€™s baffled how Nokia keeps telling potential customers it€™s phasing out its devices, which, €œsurprise, surprise,€ stops people from buying them.

€œI just don€™t understand why Nokia [has] been so inept in how it has handled its product road map. It publicly abandoned Symbian long before it had Windows Phone products, and now it€™s telling the world that its current Lumia phones have a very limited shelf-life, measured in months,€ Hyers told eWEEK.

Hyers added, €œI think we can expect a very bad summer for Nokia as consumers turn their backs on the company.€

Neil Mawston, a Strategy Analytics analyst in the United Kingdom, views the move as simply a necessary one for the pair€™s long-term goals.

€œIf the new Windows Phone 8 product is strong enough, any complaints about backward-incompatibility with Windows Phone 7 will quickly be forgotten,€ said Mawston. €œWe think the benefits of upgrading old phones to new operating systems are sometimes overstated by some smartphone fans. Better operating systems often require better hardware, and running a new OS on aging hardware can cause slower or buggier operations, and this is not an optimal user-experience.€ 

Some might ask just how far ahead Nokia has the luxury of looking. Just days ago, Nokia announced it plans to lay off another 10,000 workers, in addition to a previously announced 20,000, and to cut $2 billion in spending in other areas by the end of 2013. During its first quarter of 2012, it announced operating losses of nearly $2 billion.

While some developers at the Windows event were impressed€”Gregory Gibbons, vice president of business development at The Mobile Lab, told eWEEK he has confidence that €œsome of these advancements and the collaboration with Microsoft€ will carry Nokia€”others are still skeptical.

Hyers€™ colleague, analyst Jack Narcotta, Tweeted June 21, €œNokia thinks it€™s taking batting practice when it€™s really the bottom of the 9th and they€™re two strikes down.€                                                      

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