By now, you’ve probably heard about the shiny new phones that Nokia trotted out this morning. Leaving aside we weren’t given a price or availability of these phones or that the next generation iPhone will be released next week, on their face, these look great and have lots of nifty features. The trouble is that Nokia needed more than it could ever offer to get Microsoft and Nokia where they want to go.
I know I keep beating the same drum in this blog, but it’s not as though I relish the thought of Microsoft and Nokia failing. It’s quite the opposite. I’ve acknowledged many times, the market needs someone to take on Google and Apple, but these two platforms have become so powerful, it’s going to be almost impossible to stop them on pure momentum alone.
That said, not everyone feels that way. In fact, my colleague Wayne Rash, writing in eWeek saw this announcement as a real opportunity for the Microsoft platform due to the copyright litigation dance going on with Apple, Google and Samsung, which he believes could leave Microsoft with an opening. It’s possible, but as I’ve written I don’t think most consumers pay the least bit of attention to patent litigation.
As usual, you have your share of tech journalists gushing over the phone, and yes, it’s a nice phone, but as I wrote in a recent post, when you start as low on the marketshare totem pole as Microsoft, it’s going to take some serious traction to move up the ladder — even a little bit.
And, let’s face it, the first generation of Lumia phones were pretty nice too, but they didn’t do much. According to the latest comScore numbers for July, 2012, Microsoft dipped from 4.0 percent in the April report to 3.6 percent for July. If you trust these numbers (and I don’t see any reason not to trust comScore), in spite of the huge push from AT&T, Microsoft and Nokia; the Microsoft platform actually lost ground.
What’s different this time?
Don’t get me wrong, there is some cool technology here, and the phones have interesting colors, a big screen, a powerful camera and intriguing wireless recharging. (I’m curious to find out how and how well that works.) But you can’t escape the fact, no matter how fancy these phones may be that Apple’s market share increased 2 percent according to that same comScore report topping off at 33.4 percent for July.
And it’s not as though Apple is standing still. In a week, when the next generation iPhones come out, what do you suppose everyone will be talking about and the marketshare numbers will likely rise accordingly.
I don’t mean to leave out Google here because Android marketshare was up 1.4 percent to 52.2 percent of the US market in July. Look for yourselves. As the saying goes, read ‘em and weep.
Chart courtesy of comScore.
As Preston Gralla wrote on Computerworld today, it’s a nice enough phone, but it’s not a game changer. And that’s the problem because it’s not about the phone or the features. When people walk into the store to buy a new phone, they aren’t choosing Microsoft. They are going with Android or Apple, and with a new iPhone coming, chances are the story is not going to change unless Nokia and Microsoft come up with Star Trek-like transporter technology for the phone.
That might turn some heads. Otherwise, as the headlines fade, look for the same old story: Microsoft mobile platform struggles to gain traction. Story at 11.
Granted it wasn’t a huge loss, just .1 percent, but nonetheless it was a loss, as you can see from the chart below. And while Microsoft was busy losing more market share, Apple was the big winner in spite of a recent quarterly report showing it sold fewer phones than last year. It goes to show Apple wins even when it loses.
As for Android, it made a modest .6 percentage point gain, but 1.1 percent behind Apple’s quarterly best of 1.7, but still remains firmly in control in terms of overall percentage.
RIM? It continued to bleed market share dropping down to 10.7 percent of the market, a drop of another 1.6 percentage points.
That’s the break down, and for Microsoft it has to be a bitter pill to swallow. Stories like the one in Fortune called Five Reasons Why Windows Phone Will Make a Big Splash in the Smartphone Market or Wired’s story on Why Windows Phones Were the Most Exciting Handsets at CES look pretty silly in retrospect. As former NFL head coach Bill Parcells is fond of saying, “You are what your record says you are,” and for Microsoft it’s not a great record.
Let’s not forget, it wasn’t just overly exuberant tech journalists who were proclaiming the coming ascendancy of the Windows phones. The carriers wanted this to happen too. AT&T, Microsoft and Nokia all planned high profile promotions for the Nokia Windows phones. And you can’t say that the market hasn’t had a chance to ripen because it clearly has, but as hard as it’s pushed with ads, promotions and subsidies galore, Microsoft still hasn’t really been able to dent the smartphone market in the US.
It’s still even well behind the pathetic RIM, which continues its years long market share free fall. You have to wonder what it has to do. I’ve seen the Nokia phones and they’re very nice phones. I like the tile interface, the responsiveness of the Nokia touch screen. I thought Microsoft’s ads were surprisingly effective and tried to create this idea that if everyone had iPhone, how could you be unique? By getting a Lumia you could separate yourself from the masses. I noticed this approach caught my teenager’s attention, but he’s still not getting a Windows phone. He’s replacing his current Android phone with the next generation iPhone when it comes out in the Fall.
What exactly can Microsoft do to move the needle a bit, to capture some percentage of market share because it seems to have done everything right and has nothing to show for it. If you produce nice phones, offer them at a decent price and promote them in a clever way, you’re supposed to see some positive results, but for Microsoft it hasn’t happened yet. You have to wonder if it ever will.
According to reports ahead of the phone’s release earlier this month, AT&T was going to make the Lumia 900 its centerpiece phone. There were going to commercials galore (and I’ve seen a few). The stores would feature the phones. The sales people would trained to offer the Lumia 900 phone and there would be posters in the store featuring the phone.
Then, last week I read Roger Cheng’s and Marguerite Reardon’s article on CNET in which they walked into several AT&T stores in Manhattan posing as a first-time smart phone buyer, and were surprised to find that sales people weren’t pushing the Lumia 900 as they expected. Instead, they recommended the iPhone.
I thought that was a pretty interesting tale, so I decided to try it myself at my own local AT&T store. This wasn’t purely for research purposes though. My wife’s iPhone 3G was pretty much hosed and she needed a new phone. When we walked into the store, I noted a smallish poster at the back of the store featuring the Lumia 900, but nothing like the huge posters of the iPhone I recalled seeing in the center of the store in the past.
There was no special display either. Again, in past visits, the iPhone had its own display area where it sat royally in the center of the store. There was no such treatment of the Lumia 900. It was tucked in between the iPhones, Blackberries and the Android phones. No special handling.
Then the salesperson came over. He pulled out his phone, which was an Android, not a Lumia 900. When we expressed some interest in the Lumia 900, he didn’t say much. When I told him I thought it was nice, but lacked apps, he agreed with me. To be honest, he didn’t push any phone (which is to his credit I think), but if he was told push the Nokia offering, he didn’t do it.
Later that day, we dropped by Best Buy where I’ve found the mobile sales people are usually knowledgeable. So I chatted up the sales person on duty about the Lumia 900. He didn’t love it, but he was rooting for it because he didn’t like Android and he was sick of the iPhone. He wanted someone, anyone to come up with a reasonable alternative, but he wasn’t ready to commit to the Lumia 900.
I know this wasn’t exactly a scientific test, and I know the press is reporting that the Lumia 900 appears to be selling well and that it was even number one on Amazon for the first week it went on sale, but if AT&T was supposed to be pushing this phone, it doesn’t seem as though it was.
Whatever you think of the phone, however, it appears that at least in my local store (and the ones Cheng and Reardon visited in New York City), AT&T staff wasn’t pushing the phone at all. Now this could be an anomaly or it could be that AT&T doesn’t care quite as much about the success of the Lumia as pre-release hype might have suggested.
What’s your experience? Leave a comment and let me know.
Photo by IntelFreePress on Flickr. Used under Creative Commons License.
When I read yesterday that Nokia had set up a site to attack the iPhone, my first thought was: Big mistake. When I read this morning that it had created a video making fun of Antenna – gate – a problem that came to light almost two years ago — I thought: Wrong direction and just another case of tone deaf marketing.
See, most iPhone users, and there are a lot them, don’t care about the antenna problem. In fact, most people never encountered it and surveys find people love their iPhones in spite of it — as a recent JD Powers survey showed.
When it came to overall satisfaction, Apple blew away the field with a rating of 839. HTC came in next at 798. Apple was the only smartphone manufacturer to get five circles.
If you doubt consumer surveys, then look at the actual sales numbers that Nokia must fight as it enters the US market in earnest this month. All Things Digital reported this week that according to analysts at Genuity, the iPhone is the best selling phone at AT&T, Verizon, Sprint, and T-Mobile for the last 4 months running.
That means when given the choice of iPhone or any other smart phone, the vast majority of consumers are choosing the iPhone and that’s got to be discouraging to every other manufacturer, but especially to Nokia, which has staked the company on Windows Phone 7 smart phones.
But mobile loyalty tends to be weak right? People can be lured by the next big thing, can’t they? — or at least that’s the conventional wisdom. Unfortunately, for Nokia, that’s just not the case with iPhone.
Digital Trends reported last November on a customer loyalty survey conducted by GfK where 84 percent of respondents reported they would replace their current iPhone with another.
The numbers are remarkably redundant, aren’t they?
So when faced with a market where people are appear to be ecstatically happy with what they have, how are you supposed to compete? If you’re Nokia, apparently you create a video that makes your potential customer base look like they are stupid for the phone choice they made.
And I hate to break it Nokia, but it’s not just the iPhone. People love their iPads too. Fortune reported (via CNN Money) that a recent survey by ChangeWave found that a whopping 82 percent of iPad users reported being “Very Satisfied.’
That means making fun of Apple customers is probably not the best way to deal with the problem. There are lots of them and they are delighted with their products, and see no reason to switch.
My advice is stop trying to fight iPhone and go after Blackberry and individual pockets of the Android market. That same GfK survey found that just 48 percent of Blackberry owners reported they would buy another.
And while you’re at it, attack the soft parts of the Android market where quality and price vary dramatically.
Most iPhone users are not going to use their upgrade to move to Nokia phone running Windows Phone 7, not when they are so satisfied with what they have. Don’t go after the happy market. Try to exploit the one that’s miserable. You’re far more likely to succeed.]]>
Nokia’s launch of the Lumia 900 in the US next month is a big deal. How big? How about so big it warrants a string of cliches. So big, it’s do or die time. It’s time to put up or shut up. It’s time to walk the walk. It’s now or never.
It’s all those things and more, and then again it could be in the words of Suzanne Vega, “Nothing much, not much.” Let’s start with why it’s important.
For starters, word is that AT&T is going to push the Nokia Lumia 900 more than any phone it has ever pushed before — even the iPhone. We’re talking a big deal.
According to a post on CNET yesterday, AT&T is going to pull out all the stops for this launch. Nobody is saying just how much money is going to be spent, but given the level of the rhetoric, it’s going to be significant As CNET writer Roger Cheng indicated of the launch blitz, it’s really, really big including a massive ad campaign along with making the Lumia 900, the centerpiece of AT&T Stores.
There will be signs and posters and special training for employees — and there will be brass bands and parades. OK. I’m exaggerating a bit on the last two points, but you get the idea about the scope of this launch.
It’s big I tell you.
And because of the scope of this launch, it tells you just how important Nokia sees this in its attempts to break back into the US market because it’s been a long time since Nokia has had any significant presence here at all.
But for all of this time and effort, I’m not sure it’s going to amount to much. As I wrote in Lumia 710 is Impressive, but Is That Enough?, I’m not sure it’s going to matter how cool this phone is or how fast or how impressive it is. When you are as far behind as Windows is in the US market, it might be a case of being too little, too late.
And it’s not because I’m rooting against Nokia and Microsoft on this one. In fact, I think with Blackberry fading badly in the US market, Apple and Google could use a kick in the butt that only some good, old-fashioned competition can provide. But I’m skeptical that with Google and Apple so entrenched that there’s much of anything that Nokia can do to even put a dent in that dominance.
But neither do I expect them to simply roll over and cede the US market to the competition. They have a nice phone. The Lumia 710 I tried out was snappy and even fun to use, and while the 900 is a bit bigger with a better camera and a nicer display, the guts of the phone are pretty similar.
In the end, I don’t expect much, the splashy launch notwithstanding. The high end of the US cell phone market is not really where Nokia will make its last stand. Instead, as my colleague FierceMobileIT Editor, Wayne Rash predicts, it’s far more likely to be lower-end smart phones in Europe and Asia, where Nokia once dominated (until it was displaced by Android) where it will stand or fall .]]>
Last week while I was at CeBIT, the enormous European trade show in Hanover, Germany, I hung out with my colleague, veteran technology journalist Wayne Rash. He had a Nokia Lumia 710 he was testing and he let me play with it, and I walked away impressed.
Nokia deserves a lot of credit here. It created a nice phone, that feels good in your hand. I was surprised by how much I enjoyed the Windows Phone 7 OS. It was fast and even playful in its approach with fun animations and bright colors.
I found I liked the tiles and the original approach to the phone operating system that Microsoft has created, but when I went into the App store, I wasn’t so impressed. I know they say all of the popular apps are there, but the way it was laid out made it hard to find anything. Rash complained because there was no Pandora for the Windows phone.
And that could be a big problem because the edge isn’t going to go to the company with the most original operating system or the handset maker with the zippiest hardware, it’s going to go to the company with the most useful apps and that’s a big reason why Apple and Android are doing so well.
Both Nokia and Microsoft have the right idea, but Connor Livingston at TechHi wonders if it matters and I have to agree with him. He points out that Microsoft ran a contest at CES in January to prove its phones could do tasks like uploading images faster than the competition. But even if it won, nobody noticed or cared.
That’s the problem that Nokia and Windows face. They are starting from zero and they have to capture market share and it’s a huge challenge. They have conquered part of the problem by creating a nice phone with a unique OS that doesn’t just ‘me-too’ the competition, but when the competition is as far ahead as iOS and Android are, it’s a huge and daunting challenge to try and put a dent in that.
When I travel as I did to Germany to the conference, I always pay attention to the phones people are using in the airport, on the plane, at the conference and as I travel around. This year I saw far fewer Blackberries. In the US, there were iPhones everywhere. In Germany I noticed many more Samsung Android phones (including several Samsung Galaxy Notes with an enormous 5 inch screen) along with plenty of iPhones. What I didn’t see were many Windows phones.
When I did see Nokia, it was an older function phone, rather than the updated Windows Phone 7 models. In fact, I needed a phone for when I travel in Europe and I picked up a Nokia 7230 running Symbian instead of a Windows phone.
While my observations are hardly scientific, I think they are telling. A recent survey by Litera regarding mobile phone habits of 303 respondents, two-thirds of whom were in IT roles, found that Blackberry still has a strong role in the enterprise, but it’s fading quickly. In Litera’s survey 21 percent used iPhones, 19 percent used Blackberries and 17 percent used Android phones.
Litera did not break it down further than that, but we can presume that Windows Phone 7 is still barely registering.
That means Nokia and Microsoft are dealing with a certain level of inertia here that is going to be very difficult to overcome, no matter how nice the phones might be.
It just goes to show that once the market gets entrenched, it’s a huge task to move it to something different and that’s what Nokia faces this year as it tries to gain market share from iOS, Android, and yes, even Blackberry.
Photo courtesy of Nokia.]]>
Nokia and Microsoft have made a deal to succeed or fail together, and perhaps recognizing, they couldn’t compete with iOS and Android at the top of the market, they have decided to aim lower toward the bottom — and it might be a move that saves them both if Windows Phone 7 can truly run on lowered powered and therefore cheaper phones.
The strategy itself could be a sound one. Nokia has controlled the low end of the market for years — that is before it started being pushed aside by lower end Android phones. Android has the advantage over Apple of playing at both ends of the market with higher end phones to compete with the iPhone, and much cheaper phones to sell in places like India and China where many people can’t afford the high cost of the elite smart phones.
In fact, Reuters ran a report last month suggesting that Apple might have trouble making headway in Asia, precisely because of its higher price. Android phones have filled the gap at the low end of the market, a gap left by Nokia’s failure to evolve. Now Nokia and Microsoft are hoping to find salvation at the low end of the market.
One of those new phones announced this week at the Mobile World Congress in Barcelona is the Nokia Lumia 610, a phone Nokia hopes to market to young people, but its low price could also appeal to parts of the world such as Asia and Africa where the cost of the phone is important.
To that end, Nokia reports that Microsoft has modified Windows Phone 7 to run on the lower powered phones, but it’s unclear at this point how well this will work or what impact it might have on the ability to run third-party apps (or even Microsoft native apps for that matter). And apps are a key part of the mobile success equation.
Nokia is clearly taking aim at the Chinese market by including Chinese language and network support for the Lumia 610.
That’s not to say that Nokia is ceding the market for more sophisticated handsets to Apple and Android. As Wayne Rash reports on FierceMobileIT, the low-end strategy doesn’t mean that Nokia is giving up on the US market by any means, and in fact it also announced LTE phones for the US market for some time in the first half of this year.
Nokia and Microsoft are in a tough position. They are being squeezed by chief competitors iOS and Android at both ends of the market. In the US iOS and Android reportedly control close to 90 percent of the market. It’s going to be tough to break that control and these companies have to recognize that.
While they aren’t going to give up on the high end altogether — as they shouldn’t — it makes sense to play to Nokia’s strength, which has always been in the middle to lower ends of the markets where it dominated for years.
With their futures now linked, a strategy that tries to distinguish Nokia and Microsoft from its more dominant competitors is a smart approach, and by shooting for the lower end of the market in Asia, where there is a huge population hungry for an affordable smart phone, it just might pay off in a big way — so long as Windows Phone 7 and third-party apps don’t get sluggish on the lower powered phones.]]>
Now hold on a second, before you dismiss the idea out of hand, let’s consider a few data points.
Earlier this week I wrote a post about the battle for the smart phone market share lead and cited a couple of different studies. Buried in the piece, which focused on market leaders Apple and Android, I cited figures from IDC about RIM and Nokia and I left it that, but the numbers stuck in my head.
Let me quote that line for you:
“In case you’re wondering Nokia came in third with 12.4 percent, followed by RIM with 8.2 percent.”
If you want me to do the math for you if you combined the two companies, that’s 20.6 percent, which would put it right behind Apple’s 23.5 percent and Samsung’s 22.8 percent and into very respectable territory.
Now if you believe–and it’s by no means a given–that Nokia will improve its market share position as Symbian phones fall away and people start buying Nokia phones equipped with Windows Phone 7, those numbers could be even better.
And in fact, All Things Digital cites figures from Morgan Stanley predicting that Nokia could sell 37 million Windows phones this year.
Now, I hear you asking, “What about RIM?” Well, it’s true their market share has been plunging since 2009 and there is little reason to believe it can stop the bleeding now, but perhaps with a new team in place and a new mission, it could at least stay even.
But even if a combined RIM-Nokia Finnish-Canadian, business-consumer, one-two punch were to hold its ground at that 20.6 percent figure, that’s pretty significant market share.
And it would be a unique company, one which offers phones and services for businesses, as well as consumers letting the combined NoRIM (RIMKia?) cover all aspects of a competitive market.
One thing is certain, Apple and Android are going to continue to dominate the top of the market. As separate companies, Nokia and RIM can hope to fight for a mediocre third and a worse fourth, or they can join forces and suddenly have a serious presence in the market share game.
It’s at least worth considering don’t you think?
What do you think? Is a RIM-Nokia combined company a good idea for both of them or a disaster in the making? Leave a comment and let me know.
comScore looked at the period from September 11th to December 11th and found that Microsoft dropped 0.9 percent from 5.6 percent to 4.7 percent of US smart phone market share for the period. I’m guessing this is not the trend Microsoft was hoping for.
Windows Phone 7 has had time to mature and find a market, yet it has completely failed to do so to this point. Let’s repeat. It didn’t gain a bit or break even. It actually lost market share. Meanwhile, the guys at the top Google and Apple gained 2.5 percent and 2.2 percent respectively.
Microsoft is still hoping for some lift from Nokia as it releases its Windows phones, but so far it has yet to materialize. If we don’t see some positive movement in the next set of numbers, you have to wonder if Microsoft is ever going to gain any significant market share in the US.
This can’t be making CEO Steve Ballmer and his team very happy as they continue to throw large sums of money at the problem with little to show for it, except continuing to lose ground.
As I mentioned last week in my post, Rim Could Do Worse Than Microsoft, Microsoft may want to rethink its consumer-oriented phone strategy and shoot for the enterprise, which in many instances still screams for a more secure smart phone alternative to iOS and Android.
As badly as Microsoft did in this report, RIM did worse dropping yet another 2 percent of US market share. It’s just plain ugly for that company and it doesn’t seem to be getting better. Yet RIM still has the strength it’s always had — it’s secure server business.
As I wrote before, by bringing RIM’s struggling enterprise business together with Microsoft and its overall strong enterprise business, it could shift the focus from consumer to business and give business and government customers a secure, relatively reliable alternative– and I’m willing to bet there would be a market for that kind of service if it were done well.
Microsoft and RIM haven’t been able to get out of their own way in the US mobile market for some time. Maybe by bringing the two companies together, it would play to each one’s core strengths and give Microsoft a decent market share through its enterprise business.
For now, these latest numbers show how badly these two companies are floundering in the lucrative US smart phone space. Maybe bringing them together would produce something productive. It couldn’t be much worse than how they’ve been doing apart, that’s for sure.]]>
I couldn’t help but notice several article trumpeting how wonderful Windows Phone 7 is recently. Beginning with this one in the New York Times, Microsoft Defying Image Has a Design Gem in Windows Phone. The Financial Times of London added to the Windows Phone 7 love fest with the head, Nokia’s Mango-powered Lumia 710 deserves to succeed.
I was particularly taken by the wording of the title in the FT.com. Really? It deserves it? Based on merit or because it’s just high time Microsoft had a winner in mobile or what?
As a lover of trends, I also couldn’t help but observe this Microsoft love was accompanied by stories like this one in Informationweek, Apple’s Cool Factor Waning? It had to be enough to have Microsoft’s PR staff rubbing their hands with delight at such a news convergence. Suddenly Apple’s losing its cool and Microsoft is so deserving of positive attention.
This idea of Apple losing its cool sounds familiar, doesn’t it? It should because I wrote about it just last month coming directly from the mouth of a Nokia executive. In my post, Nokia and Microsoft Struggle to Find Clear Message, I included a quote from a Pocket-Lint interview (which itself included the provocative headline: Nokia: Youths are Fed up With iPhones and Baffled by Android.). Here’s the Pocket-Lint quote from Nokia executive, Niels Munksgaard:
“What we see is that youth are pretty much fed up with iPhones. Everyone has the iPhone,” he said. “Also, many are not happy with the complexity of Android and the lack of security. So we do increasingly see that the youth that wants to be on the cutting edge and try something new are turning to the Windows phone platform.”
Starting to see that we have quotes, then we have stories that seem to mirror the quotes? And we have stories declaring the goodness that is Windows Phone 7.
What we have is what appears to be an orchestrated campaign to convince the public that Windows Phone 7 is really cool and that Apple, well, it used to be, but it isn’t anymore. As for Android, <whispers>, it’s open source, and that’s, you know, a bit messy and confusing.
It may very well be that Windows Phone 7 phones are great phones. I’m not suggesting they are or they are not, but when you see the tech press gushing this way, it may be time to step back and try to separate the hype from reality.
Right now that’s difficult to do, but if Windows Phone 7 phones — and remember there are going to be many of them with varying quality — are deserving, the market will determine that soon enough without help from the Microsoft hype machine.]]>