Gigaom

Nokia’s Lumia Transition Is Complete. Will It Pay Off?


The new Nokia Lumia 920 is displayed during a news conference in New York, on Sept. 5, 2012.

Photograph by Jin Lee/Bloomberg

The new Nokia Lumia 920 is displayed during a news conference in New York, on Sept. 5, 2012.

They’re here … sorta. Nokia’s new Lumia phones—the 920 and 820—were introduced at a New York City press event on Wednesday morning, Sept. 5, and they’re the first handsets to show Microsoft’s Windows Phone 8 operating system. They look great and appear to have some amazing new technology, particularly around photography. With competitive new Lumias, Nokia (NOK)’s transition plans appear done and now it’s time to see if the hard work pays off: Will handset buyers care?

One immediate challenge for Nokia’s “Switch to Lumia” mantra was upended by a lack of availability details. When asked, Nokia’s chief executive, Stephen Elop, said sometime in the fourth quarter in select markets. That shouldn’t be a total surprise for those who follow this market, as in the U.S., carriers typically share those details for new handsets. Regardless of that key bit of missing information—especially since Apple is likely to launch a new iPhone along with pricing and availability details next week—the new Lumias represent the culmination of Nokia’s transition efforts.

But didn’t Nokia have Lumias in 2011? Sure, the company launched a few Windows Phone handsets last year. They were serviceable devices that helped build Microsoft’s Windows Phone share, thanks to the 7 million Lumias sold so far, according to Elop. But those first Lumias arrived not long before Microsoft (MSFT) publicly announced Windows Phone 8. Simply put: They were stop-gap handsets compared with today’s new models, even though I was personally impressed by the old Lumia 900.

Indeed, the first Nokia Windows Phone device shared far more with the MeeGo-powered Nokia N9 than it offered in terms of new design. Nokia is generally keeping that design with the new Lumias, though, and I think it’s a good move. They’re relatively unique, fit well in the hand, and offer a big step up in hardware compared with the old models.

My colleague Ryan Kim has a full overview of the new Lumia 920 and slightly smaller 820, and I see several key stand-out upgrades, particularly in the flagship 920. Nokia’s PureView camera technology with the 8.7 megapixel sensor should take outstanding photos. The wide f/2.0 aperture and floating-lens technology will help low-light pictures and provide image stabilization. The touchscreen uses “super sensitive touch” that works through gloves or mittens, and both phones support wireless charging.

Gone is the 800 x 480 display from old Windows Phones, replaced by a 4.5-inch 1280 x 768 display with 332 pixels per inch—hey, it’s a Retina Display—and 600 nits of brightness. An NFC chip works with speakers to play music from the phone. And even though Windows Phone runs superbly on older processors, the bump to a 1.5 GHz dual-core Snapdragon chip is welcome, too.

Of course, hardware is only part of the equation for success; it takes great software as well, and Nokia has stepped up its game here, too. Nokia’s navigation and mapping works while offline, helping to save on mobile broadband use. The City Lens app puts virtual reality to good use by superimposing points of interest on your surroundings.

Microsoft SkyDrive integration adds seamless cloud storage. At the launch event, Microsoft’s Joe Belfiore said even more Windows Phone 8 software features will be shown in the next month or two.

So based on what I saw today, I’d say Nokia’s Lumia transition has effectively ended, because it now has a true competitor to the currently available iPhone and Android devices. What’s next? Watching to see if the transition has paid off. It’s too early to say, but I’m still cautiously optimistic at this point. My uncertainty isn’t because of the devices themselves; I can’t wait to get my hands on one and experience the many improvements.

Instead, I was left with a key unanswered question from Nokia that directly affects the company’s future: What did it announce today that will get consumers to switch from an iPhone or Android device? Without a compelling answer to that question, I suspect most new Lumia sales will come from those already using an older Lumia and that won’t generate the growth that Nokia needs to sustain a turnaround.

To be sure, several attractive features in the new Lumias are impressive. And when you add them all up, they make for an appealing Windows Phone package. Is that enough to take back market share from iOS or Android? Surely it is from BlackBerry, which won’t be on its next platform until 2013. In fact, I still stand by my 2011 prediction that Windows Phone will grab more market share than BlackBerry at some point this year. The game isn’t really against RIM’s BlackBerry, however.

Instead, Nokia and Microsoft combined are really looking to pressure Apple and the many Android hardware partners—in particular, Samsung (005930.KS), which stole the top phone seller spot from Nokia this year. Do the new Lumias with Windows Phone 8 offer enough to mount a significant challenge? On paper, I think so.

It’s all about marketing, sales figures, and carrier support now, however, so while the transition is over, it won’t amount to anything without those. And part of the reason a $50 price drop last year didn’t do much for sales relates directly to potential struggles with the new phones: Application lock-in costs and wanting to use the device—and apps—your friends use are still potential obstacles no matter how nice the Lumias are. I’m hopeful, but not certain just yet, that Nokia is out of the woods.

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Tofel is a writer for the GigaOm Network.

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