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Nokia Unveils Lumia Phone With Camera to Revive Demand

July 12, 2013

Nokia Bets 41-Megapixel Camera Will Lure More Users to Lumia

A employee demonstrates the photo capabilities of the Nokia Lumia 1020, a Windows Phone with a 41-megapixel camera, after its unveiling in New York on July 11, 2013. Photographer: Timothy Clary/AFP/Getty Images

Nokia Oyj (NOK1V) plans to start selling a Lumia smartphone with a high-resolution camera, the Finnish handset maker’s latest effort to revive its comeback bid.

The Lumia 1020 has a 41-megapixel camera, allowing users to take crisper pictures and video through a technology called “oversampling,” Chief Executive Officer Stephen Elop said yesterday at a press conference in New York. AT&T Inc. (T:US) will sell the phone for $299.99 with a two-year contract starting July 26, Nokia said.

Elop is trying to stem losses and reverse falling sales by challenging market leaders Samsung Electronics Co. and Apple Inc. (AAPL:US) with improved cameras and location-based services. Apple’s newest iPhone has an 8-megapixel camera, and Samsung’s Galaxy S4 has 13 megapixels. Like other Lumia handsets, the new device runs on Microsoft Corp. (MSFT)’s Windows Phone operating system.

“Microsoft needs to appeal to consumers with something and they’re unlikely to match Apple and Google’s app system,” said Avi Greengart, a research director at Current Analysis Inc. “The camera may be it.”

The phone has a 4.5-inch (11-centimeter) screen and software from AT&T to remotely store images and video. Nokia is rebuilding its smartphone business around the Windows-powered Lumias after abandoning its homegrown Symbian software.

Nokia fell 1.8 percent to 3.13 euros at 10:14 a.m. in Helsinki. The stock had risen 9 percent this year through yesterday, after five straight annual declines.

Former Leader

Nokia’s previous attempts to focus on high-quality cameras, such as the 41-megapixel Nokia 808 PureView introduced last year, have failed to halt declining sales. The Espoo, Finland-based company’s smartphone unit sales plunged 49 percent in the first quarter as Lumia shipments didn’t rise enough to offset plummeting demand for older models.

Lumia sales climbed 27 percent to 5.6 million units in the period from 4.4 million in the fourth quarter as Nokia added versions. The company predicted in April at least 7.11 million Lumias would be sold during the second quarter as more models roll out. Nokia unveiled the Lumia 925, which costs 469 euros ($613) before taxes and carrier subsidies, in May.

The Lumia 1020, available in three colors, includes image-stabilization technology, a manual shutter and xenon flash to appeal to photography enthusiasts, Nokia said. It also includes software to manually adjust flash, shutter speed and exposure.

‘Flagship Phone’

“The Lumia 1020 is a flagship phone that stands out from the crowd,” said Jo Harlow, Nokia’s smartphone chief, in an interview after the briefing yesterday.

One of the first smartphone makers, Nokia dominated with a global market share topping 50 percent before Apple’s iPhone and Google Inc.’s Android software were introduced about six years ago. Nokia’s market share has since collapsed to about 3 percent, according to IDC. The slump has pushed Nokia to losses and forced it to cancel its dividend for the first time in at least 143 years.

Nokia’s debt rating was cut last week one step deeper into junk by Standard & Poor’s, which said the handset maker’s net cash may tumble after it agreed to buy Siemens AG (SIE)’s share in their network-equipment venture for 1.7 billion euros.

To contact the reporters on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net; Scott Moritz in New York at smoritz6@bloomberg.net; Madeline McMahon in New York at mmcmahon26@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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