Nokia's bet on Windows Phone 8: Expert opinions

Nokia Lumia 900 launch Nokia organised a high-profile launch for the Lumia 900 in New York in April, but three months later cut the Windows Phone 7 device's price in half

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Nokia and Microsoft co-host a press event in New York this Wednesday where they are expected to unveil devices running the new Windows Phone 8 operating system.

Rumours and reported "leaks" suggest there will be two handsets offered in a range of colours, with at least one featuring Nokia's PureView camera technology and "wireless charging" via a separate base.

It is a critical event for both companies.

Nokia's losses are mounting and in April it surrendered its 14-year position as the world's biggest phone-maker to Samsung, according to researchers at Strategy Analytics.

Smart device diary

5 Sept: Nokia/Microsoft (New York)

Expected to unveil two Windows Phone 8 handsets

5 Sept: Motorola/Verizon (New York)

Android device for the US market

6 Sept: Amazon (Santa Monica)

Kindle Fire 2 tablet and speculation of a "surprise" handset

12 Sept: Apple (San Francisco)

Unveiling of iPhone 5

18 Sept: Motorola (London)

Details of firm's first Intel-powered smartphone

19 Sept: HTC (New York)

Likely to include company's first Windows Phone 8 handset

Add that to announcements of 40,000 job cuts, a plan to shift all handset production to Asia, and the acknowledgement that sales of existing Lumia models have been "mixed", and it makes for a rocky start to Stephen Elop's first two years as the firm's chief executive.

Microsoft's finances are in a healthier state but it knows it has yet to crack the smartphone sector.

A recent study by Canalys suggested Windows Phone had only captured about 3% of the global market between April and June.

That compared to Apple iOS's 16% and Google Android's 68%.

Samsung, HTC and Acer have all announced plans to release Windows Phone 8 models.

But Microsoft's decision to co-host this event and the fact that Mr Elop used to work for the firm means that it is heavily invested in Nokia's success.

Ahead of the announcement, the BBC asked four industry watchers for their views of the challenges and potential opportunities facing Nokia.

Gap in the market?

Ben Wood

Ben Wood is chief of research at CCS Insight, a technology consultancy specialising in mobile devices. He thinks Nokia and Microsoft face a struggle if they are to make Windows Phone the market's third dominant operating system.

This is the single most important product launch under the stewardship of Nokia's chief executive, Stephen Elop.

It must deliver the vision he set out in the now infamous "burning platform" memo in February 2011, when he abandoned Nokia's in-house operating systems in favour of Microsoft's Windows Phone.

Following four initial Lumia phones, the new products will be the first to truly benefit from collaboration between the two companies.

But, given the majority of potential customers in markets like the UK are already using a smartphone, the big question is whether there is space for a third platform. Nokia will need network operators and retailers to push its products hard to get consumers to make that jump.

Success for Microsoft is just as important. CCS Insight estimates that 700 million smartphones will be shipped in 2012, making them the most prolific computing devices on the planet, outstripping PCs.

This is an opportunity where Microsoft cannot fail. The challenge is further complicated by the perception of Windows as functional software for PCs.

For many people, Windows is far removed from the mass-market smartphone experience, which was first shaped in 2007, when Apple launched its iPhone, wrong-footing traditional phone makers and ultimately contributing to Nokia's woes.

However, software alone will not be enough. Nokia needs to produce world-beating hardware designs that tempt buyers away from rival devices like the iPhone and Samsung's Android-powered Galaxy S3.

Success depends on a complex blend of hardware, software and services. Getting that recipe right has so far eluded many of the biggest names in consumer electronics. Nokia's future will depend on it.

Camera technology

Mat Gallagher

Mat Gallagher is deputy editor of Amateur Photographer. The magazine praised Nokia's first PureView-enabled device last month, but Mr Gallagher warns the technology faces a new threat.

Nokia has a history of leading camera technology in mobile phones.

Its 7610 model, back in 2004, featured the first 1 megapixel camera and the N93, in 2006, had a three-times optical zoom.

The firm has said its latest advancement, the PureView system, offers "a new benchmark in imaging" thanks to the combination of a high-resolution sensor and a technique called oversampling.

This involves combining the data from several of the sensor's pixels to create what Nokia calls a "super-pixel". In the case of the first handset to feature this, the Symbian-based Nokia 808, a 41MP sensor was used to create a higher quality 8MP or smaller file.

The results demonstrated better low-light performance and colour. PureView has been a long time in development but the results are impressive and actually rival some high-end DSLR (digital single-lens reflex) cameras for detail.

This technology, if refined and used on a Windows 8 platform, could put Nokia out in front again.

However, with the Samsung Galaxy and Nikon S800c now using Android operating systems the competition could come from the camera market. These compact cameras feature wi-fi to upload images straight to social networking sites and benefit from physically larger sensor sizes and optics than cameraphones can offer.

For a cameraphone to be really successful, it needs to be effortless.

The process from selecting the camera mode to uploading the image should be as quick and easy as possible, and should deliver a great image in any light at the touch of a button. Anyone wanting to fiddle with creative control is more likely to reach for a proper camera.

Takeover talk

Colin Gillis

Colin Gillis is technology analyst at BGC Partners, a New York-based financial services company. He dismisses speculation that Nokia's partnership with Microsoft is destined to end with the Finnish firm consumed by its American partner.

As Microsoft pushes to get its fledgling phone ecosystem to grow, we are frequently asked our view on the possibility of a Microsoft acquisition of its major partner Nokia.

While anything is possible, and there is a reasonable argument to be made for such a tie-up, our take is an acquisition is not likely to happen this year for several reasons.

Nokia is already fully committed to building Windows Phones and one can argue that Microsoft is already enjoying the majority of any benefit it would receive from acquiring Nokia.

The recent US ruling for Apple against Samsung on patent violations should serve to renew interest in the Windows Phone platform from other handset vendors. Several Android handset makers already pay a royalty to Microsoft for its intellectual property.

Hardware products from multiple vendors have historically been Microsoft's business model to get traction across market segments. A purchase of Nokia by Microsoft could alienate its other hardware partners, but we do note that Microsoft is getting more aggressive in this area by building its own tablet.

An acquisition is likely to prove costly, take a long time to close, and would be a distraction at a time when Microsoft management is rolling out critical new flagship products such as Windows 8.

Regarding price, we mention that Nokia's current market cap of $10.8bn (£6.8bn) is more than Microsoft's largest acquisition ever - Skype in 2011 for $8.5bn.

We also mention that the 52-week high for Nokia of $7.38 a share is sharply above its current trading price, suggesting a meaningful premium might be required to gain control.

Patent portfolio

Malik Saadi

Malik Saadi is principal analyst with Informa Telecoms & Media, a London-based consultancy. He says the weight of Nokia's huge patent library should not be underestimated, especially after a jury said Samsung should pay Apple $1.05bn following a US lawsuit.

The industry is speculating about the 7.7% jump in Nokia's share price on the same day that Apple won its legal case against Samsung for patent infringements.

In fact, there are a number of reasons why Nokia could benefit from the conflict between Apple and Samsung and why Nokia's adoption of Windows Phone as primary platform could finally start to pay off.

First, it appears from the Samsung-Apple hearings that Microsoft has signed a cross-licensing agreement, whereby the two companies agreed not to file any legal suit against each other as long as the designs of iPhone and Windows Phone devices could be differentiated.

Nokia benefits directly from this agreement as a privileged partner of Microsoft.

Second, Nokia could benefit from the recent change in Microsoft's Windows 8 strategy.

Microsoft is aiming to promote the unified Tiles-based user experience enabled by Windows 8 across all devices, from PCs to smartphones. Practically speaking, this is the first time Microsoft's mobile division will benefit equally from the corporate marketing budget, which will greatly benefit Nokia, and all the supporters of Windows Phone 8.

Third, Nokia has a rich intellectual property portfolio - it has more than 12,000 patents distributed across all the key technology sectors, including wireless communications, terminal software, imaging, navigation, hardware and services.

Informa believes Nokia's patent portfolio is the most balanced across all industry sectors and it will enable Nokia to lead innovation in the converged world as well as making it more immune to legal attacks by its rivals in the industry.

The BBC's Rory Cellan-Jones looks at what sets the Lumia 920 apart from rivals


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  • rate this

    Comment number 89.

    Nokia/Microsoft et al will have to generate a buzz around WP8 to get interest in them, the fact that Windows 8/Surface is due in Oct is a really good platform to jump off, Win8 RTM is running perfect on my 2 PCs and really does sync well with my current WP7.

    SO maybe the all in one mass release of a few devices could attract users from current spat with Apple and Samsung.

  • rate this

    Comment number 88.

    Wish people would stop saying Apple/iPhones are 'cool', as they are not. Apple USED to be cool when it was smaller and less popular with the mainstream. Now everybody has an i-something. Something that is that popular, by definition, ceases to become cool or trendy.

  • rate this

    Comment number 87.

    @85 carl c
    A lot of people worry about upgrading their phone but I just don't get it. Phones weren't upgradeable before 2007 and really you only have it for two years before you get a new one.

    rr6 is right. It is only about fashion. People buy what celebs and fashion and shop assistants tell them to buy mainly. Most people on here have never used a Windows 7+ phone but seem to have an opinion.

  • rate this

    Comment number 86.

    The success of Windows 8 and the new Nokia handset will not be driven by functionality and engineering; it will be all about fashion.

    For success, it needs to be the trendy gadget to own; celebrities need to use it and the media need to talk about it instead of just refering to Apple products.

  • rate this

    Comment number 85.

    I've owned Nokia phones for my last 3 and have always found them reliable and dependent. I have considered the Lumia 710 which is on a very good deal but the 'fly in the ointment' is that windows 7.5 phones cannot be upgraded to Windows 8.... seems a bizarre way to try to encourage adoption when your phone will become out of date so quickly?

  • rate this

    Comment number 84.

    I was always a Nokia user until I bought a Samsung Android unit. It was a quantum leap in performance, features and all round useability. Windows 8 on a mobile is going to struggle behind Apple and Android. I feel sorry for Nokia, but they really did get caught with their pants down.

  • rate this

    Comment number 83.

    67. Nokia fragmented their handsets between symbian, maemo (now meego) and MS. I own and still use an n900, best handset I have ever owned, but it lacks in the software area as you say (not sure why people are marking you down for saying so, but welcome to BBC HYS :p)

    I hope nokia manage to recover their market share, well built phones that last not cheap components and flimsy cases.

  • rate this

    Comment number 82.

    The Lumia, I was pleased with it. Good OS, great build quality, good but not great camera.

    So I thought, let's get all those apps back I had on my Android. That was the deal breaker. I could not get even half back. It is an app ghost town.

    So I had a phone that did far less than I was used to. I sold it.

  • rate this

    Comment number 81.

    #34. Psycrow... You're quite right. Nokia phones have lacked a certain 'something' really since the N95 came out. Hardware is actually worse now than it was then, but that's not the issue at the moment, its all about the badge on it. Nokia missed a trick by not jumping on the Android bandwagon, sales of the Lumia would have been much higher if they had.

  • rate this

    Comment number 80.

    Nokia's old phones are still arguably the best. Batteries lasted 2 weeks easily. Try getting that these days. Unfortunately, people want a phone to connect to Facebook on the go and alike. Forgetting a phone can actually make calls.

    Unfortunately for Nokia though, their 'advances' and 'new' tech is far too little and certainly far too late. Cant see them surviving much longer.

  • rate this

    Comment number 79.

    The "wow" factor is if it runs exactly the same software that's on my laptop and they talk to each other in a really clever way. Then Microsoft and Nokia are in with a chance.

  • rate this

    Comment number 78.

    As a professional software developer I have built apps for iPhone, Android, and Windows Phone 7. In my opinion Windows Phone was the easiest developer experience. The toolsets provided by Microsoft are second to none. With Windows 8 developers will be able to target PC, Tablet, and Phone. As a result I think we'll see a vast increase in developer interest for Windows 8 / Windows Phone 8.

  • rate this

    Comment number 77.

    Since Apple devices offer very little in terms of functionality, Nokia don't really have to do a lot to gain market share. Nokia devices have always been well designed, built, and featured. Add to that the most common operating system in the world and you have a winner. The only thing letting previous Nokias down was the lack of compatibility. This new Windows platform will fix that.

  • rate this

    Comment number 76.

    What we really need from smartphones is battery life. It's no use having wi-fi, mobile internet, games, music etc. if the thing lasts a few hours when you try to do anything with it.

    It would be good to have an alternative on the market to Google's lax stance on privacy and Apple's restrictive policy (though Windows RT looks little different).

  • rate this

    Comment number 75.

    Strange my last comment is marked down.

    Nokia did mess up their huge share of the market by failing to move on. As their sacked executives know well.

    I had a Lumia 900 on upgrade. Nice phone. But I missed the android market and went back to a HTC one X. Quad core, better camera and thousands of apps.

    Would I buy Nokia again? Yes. If they impress again.

  • rate this

    Comment number 74.

    Having had a Windows Phone 7 for about a year now, I can say that it is good... but not excellent. Windows Phone 8 will be excellent. This at a guess is the turning point! Quite frankly it has to be.

    The rumours going around with these new Nokia's are exiting, it will have multi-cores, wire-less charging, aspects of the 41MP, Integrated Skype etc should be good, can't wait for 3pm!!

  • rate this

    Comment number 73.

    @ GK #52
    Actually Windows is the “more vunerable” software because it’s bigger in the PC world, if you are writing a virus you can write one to hack 10% of the market (Mac) or 90% of the market (Windows), so they write for windows.

    With phones market share is the other way around, so more likely Windows will be the more “secure” one.

  • rate this

    Comment number 72.

    I've had a Lumia 700 for 8 mos now, with W7.5. Beats my partner's Sansung/Android for style, usability. Got most of the apps that are actually useful. Just wish I could upgrade to W8...

  • rate this

    Comment number 71.

    I need to upgrade my computers, still on XP. The surface tablet look lovely and complimented with a desktop running on Win8, if it is a good as it looks, would be great. If I could top that off with a phone running the same OS, and a great camera, (if it is better than the N8, which I have produced some incredible shots especially B&W) I would be more than happy. As for apps, err software?

  • rate this

    Comment number 70.

    I have had Windows Smart phones for years - It was great having 'proper' applications on them where I could create on my Smart Phone. I used to write all sorts of things on ferry, bus and train journeys, fairly comfortably. However, phone management, upgrades and downloads were poorly implemented.

    I would try a Windows Phone again - so long as price id right and office is still there.


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