The New Lumia Phones May Be Nokia's Best Chance
Nokia introduced two new smartphones on Wednesday, the Lumia 620 and Lumia 920T. These represent the opposite ends of the spectrum when it comes to handsets: The low-end 620 carries an unsubsidized $249 price tag, while the 920T will retail at more than $700 minus any carrier subsidies. Yet both together represent what may be Nokia’s (NOK) best chance to gain market share on its peers.
The budget-priced Lumia 620 is aimed at the first-time smartphone buyer, and perhaps that’s a good audience to target. Most who have a smartphone have already invested in either iOS or Android apps for their phone, making it a barrier to switch. Some surely will give up their iPhone or Android for a Windows Phone, but so far relatively few have done so, based on market share and sales figures.
Consider a feature phone owner who hasn’t bought apps tied to a platform, however. At $249 retail, a carrier could easily subsidize the cost down to nothing, and the new smartphone owner would have a capable, easy-to-use device with apps and a media ecosystem in Windows Phone.
The device has a 3.8” ClearBlack display with 800×480 resolution, 8 GB of internal storage with expansion up to 64 GB, 5 megapixel auto-focus camera supporting 720p video capture, and a 1 GHz dual-core Snapdragon S4 processor. Also included are radios for NFC, GPS, Bluetooth, and dual-band Wi-Fi.
There’s little here that a first-time smartphone buyer would be missing. And while smartphone penetration in the U.S. and a few other regions is already past the halfway mark, there are plenty of countries where feature phones are still in the majority. It’s here that the Lumia 620—and Windows Phone—have opportunity.
The other big opportunity is China, the world’s largest smartphone market, and that’s where the Lumia 920T comes in. This is the first Windows Phone 8 device on China Mobile (CHL)—the nation’s biggest operator with 703 million subscribers—and the first Windows Phone device that supports the TD-SCDMA 3G interface. This alone helps the Lumia 920T stand out, as Apple’s (AAPL) iPhone doesn’t yet support this 3G standard.
Nokia’s new Lumia 920T likely shares much of the same parts and functionality of its flagship 920—with the addition of the TD-SCMA support, of course. A dual-core Snapdragon S4 Pro chip with slight variations and a different GPU will power the 920T.
Nokia hasn’t announced any other official specs, but much of what buyers like in the original 920 should be there. That phone has a 4.5-inch, 1280×768 display, 8.7 megapixel camera with optical image stabilization, Qi wireless charging, and every radio or sensor one would want in a modern smartphone. AT&T (T) currently sells the 920 for $99 with contract in the U.S., but the audience is limited due to the lead in mind share, if not market share, that iOS and Android have. While Android is a big seller in China, the lack of iPhone on China Mobile should help Nokia.
Since Windows Phone and Nokia were both late to the current smartphone era, I see more opportunity now with this strategy of a low-cost Lumia for areas still dominated by feature phones and a China flagship variant that doesn’t yet have to compete with Apple’s iPhone.
If this doesn’t work to build sales momentum, however, I’m not sure where else Nokia can find new Lumia opportunities in the future. And in many respects, that’s a shame, because the Lumias are a solid line of smartphones plagued more by their timing than their actual features and functions.
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