Nokia to start selling make-or-break smartphone in November

Reuters

Nokia (Helsinki, Finland) will start selling its new smartphone, potentially its last chance to break into the most profitable part of mobile phone market and secure its future, in November, sources at European telecoms operators said on Friday.

The Lumia 920, which uses Microsoft's (Seattle, USA) Windows software, is Nokia's bid to catch up with Apple's (Cupertino, USA) iPhone and a string of popular phones using Google's (Mountain View, USA) Android software, like Samsung's (Seoul, South Korea) Galaxy models.

The new phone, which with its rounded edges and colorful covers look similar to its predecessors, was unveiled on Wednesday and drew a thumbs down from many analysts, who felt it lacked the "wow" factor to make big inroads against rivals.

They were also unsettled by Nokia's refusal to say when the phone, and the smaller Lumia 820 models, would go on sale, or to give details on the price and operator partners.

Once the world's biggest mobile phone maker, Nokia fell behind rivals in the fast-growing smartphone market and has struggled to catch up, racking up more than 3 billion euros in operating losses in the last 18 months and forcing it to cut 10,000 jobs, as well as sell assets.

By going on sale in November, the Lumia 920 will hit stores in time for the key holiday sales season. It will be priced similar to Samsung's flagship Galaxy S3, operators in several countries said. The Galaxy S3 sells for around 580 euros.

But the phone will probably land more than a month after Apple's new iPhone and will face stiff competition from Samsung, which last week unveiled the world's first smartphone with the Windows Phone 8 software that the Lumia 920 will use, as well as new models from HTC (Taipei, Taiwan) and Google's Motorola.

An executive at an eastern European telecoms operator said he would start selling the Lumia 920, which features a high-quality camera and touch screen that can be used with gloves, in the second half of November, adding larger countries would receive the model earlier that month.

"The problem is that Nokia has temporarily destroyed the market for its own phones. Nobody will buy the old Windows phone and until the new Lumia comes, the market is absolutely dead," the executive said, declining to be named because he was not authorized to speak to the media on the subject.

Industry sources said on Thursday that Nokia had cut the prices of its older smartphones in a bid to boost demand until its new phones reach the market.

Analysts expect the Finnish firm to lose another 700 million euros in the July-September quarter and to sell around 3.6 million Windows phones, down from last quarter.

In comparison, Samsung sold more than 20 million Galaxy S3 smartphones in just 100 days.

Samsung has become the world's biggest smartphone maker as Nokia's share of the market has plunged to less than 10 percent from 50 percent during its heyday before the iPhone was launched in 2007.

The Lumia 920 is expected to go on sale in the United States around the same time as in Europe.

A Nokia spokesman declined to comment.

DIFFERENT VIEWS

While some operators and retailers said they would focus on the new iPhone and rival models, others were more positive.

"It looks really good, they chose to differentiate with the design and appearance, which are very important to people. The camera technology is very interesting," said Sami Aavikko from DNA Finland (Helsinki, Finland), the third-largest carrier in Nokia's home market.

Ernest Quingles, managing director for Italian distributor Tech Data, said he expects the new Nokia devices to be successful, but questioned whether Windows Phone can attract as much interest from developers as Android and the iPhone.

"What we need to check still now is how Microsoft and Nokia will be able to develop the apps part," he said.

Part of the reason for the limited success of Windows phones so far is that they support only 100,000 or so apps, compared with about 500,000 or more for Android or iPhones.

Apple's and Google's entrenched positions mean consumers have invested heavily in apps and content with them, and that could discourage switching to a new mobile system.

Nokia's volatile shares were 3.5 percent higher at 2 euros by 1015 EDT in a firmer European market.

(Additional reporting by Reuters bureaux across Europe; Editing by Mark Potter)

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