13 Comments

Summary:

It is too early to call success or failure on Nokia’s strategy to build Windows Phone devices, but the handset maker is already shipping more Microsoft smartphones than its rivals. While shipments don’t equate to actual sales, Nokia might catch its peers too focused on Android.

Lumia feature

It is far too early to call success or failure on Nokia’s strategy to build devices with Windows Phone, but the handset maker is already shipping more Microsoft smartphones than its rivals. On Friday, research firm Strategy Analytics said that in the fourth quarter of 2011, Nokia accounted for 33.1 percent of all Windows Phone shipments. While shipments don’t equate to actual sales, this data point might catch other companies asleep at the wheel.

First, it is not terribly surprising that Nokia is making more Windows Phones than Samsung, HTC, LG and others. The fact that the company has been laser-focused on its partnership with Microsoft — to the reported tune of more than $1 billion in revenue for Nokia — meant that at some point, Nokia would surely ship the most Windows Phones. But for it to happen so quickly with just 900,000 shipments is enlightening.

Part of the reason has to be that Nokia’s competitors are beating one another up as they try to differentiate themselves with Android phones. Samsung has a wide range of Androids based on its Galaxy line and TouchWiz user interface. HTC is retooling its Sense UI and spent $300 million on Beats audio for improved sound quality, while LG is clinging to glasses-free 3D technology to stand out. And all the while, Nokia just keeps building and shipping Microsoft-based handsets.

Why is this important? Two reasons. First, some of the Android makers are losing momentum. HTC’s sales, for example, aren’t growing as quickly as they used to, because on the one hand, the Android market is finding new entrants in ZTE and Huawei, and on the other hand, Samsung is gobbling up market share. Second, if Windows Phone gains a reasonably big audience — something that is debatable but likely, in my opinion — Nokia will be best suited to dominate sales, because others have been so focused on trying to milk profits out of the much larger Android landgrab.

Put another way, How ironic would it be that as Android makers consumed themselves by trying to one-up one another with dozens of extremely similar handsets, Nokia — which overextended by creating hundreds of Symbian devices — wins heaps of Windows Phone market share by being the only vendor that really cares about the platform?

  1. I completely agree! Wrote this up after CES about the Nokia+Microsoft partnership: http://www.yourtechreport.com/2012/01/17/ces-nokia-microsoft-a-step-in-the-right-direction-2/

    Share
  2. Very speculative. Windows Phone 7 has not shown any indication thus far that it will become a significant player in the mobile landscape.

    Share
    1. Yes it’s speculative, even arguable as I said in the article. ;) But it’s better for a company IMO to be ahead of the curve compared to its peers, which was the point of my post.

      Share
  3. It’s nice to see Nokia playing to their strengths and succeeding. I was remarking to my friend the other day that Nokia has finally produced some high end phones I’m interested in. (I’m currently a WP7 HD7 user.)

    Share
  4. Kevin, have you tried the latest Windows Phone? If so, what do you think of it?

    People whose opinions I respect seem so like it a lot (even after using Android and iOS for a while). I haven’t warmed to it yet, and its design seems to limit both UI advances and app visibility (on the phone) for perhaps the majority of app developers.

    Share
    1. Indeed I have. My most recent write up was from when Mango arrived: http://gigaom.com/mobile/windows-phone-7-mango-preview/

      I shared my hands-on impressions of the Lumia 710 on our podcast last month and I’m looking forward to see any new WP’s come out of MWC to try. I find the UI very refreshing and easy to use, although there are still some things I don’t like: Scrolling through an endless list of alphabetized apps isn’t ideal to me, for example. But all in all, it’s a very capable platform IMO.

      Share
  5. The success of Windows Phone may well depend on how many apps are available for it.

    Share
    1. Agreed, but how many in total or how many that people recognize and want? I suggest the latter, and to be honest, there’s a fair number of those in the catalog which topped 60,000 in total not long ago.

      Share
  6. Is this sell-in to Operators/Retailers number or to customers?

    Share
    1. The figure represents shipped, not sold, so it would sell-in to Operators/Retailers.

      Share
  7. Water is wet and Nokia is selling more WP7s. To the extent that a OEM can take an existing Android phone and throw WP7 on it…they will. There will be plenty of time to jump into WP7…if the markets dictate. That’s a big “IF”.

    Share
  8. Nokia must continues where it succeeds and where its strength lies.

    Share
  9. Not that surprising on the other hand – Nokia is pushing Windows Phones really hard, putting millions in advertising. After all it´s their only bet. Other manufacturers have other (at the moment: better) horses to bet their money on, so their efforts are not that intense to stay in the Windows Phone game that yet has to show, that it can catch on.

    The real astounding (and alreay known) fact here: you are the number one Windows Phone manufacturer with an amount of devices shipped (not sold) in a quarter (!) that equals the amount other platforms (android & ios) activate (not ship) every single day.

    That pretty much shows, how much Windows Phone still has to go before it catches up in retail market share (and then finally some day in active devices market share).

    I like Windows Phone a lot, but I am not sure about MSs strategy; lowering hardware requirements, opens a new market, but one with low margins; it adds fragmentation and the original Windows Phone specs are de-facto already low-end today (if you look at android and ios offerings). To stay in the game, they will need to offer high-end hardware (dual- and quad-core), too – so that´s another set of hardware developers can design for and while there is no software fragmentation (as of now), there is one on the hardware side and pretty bad, because high- and low-end hardware is added to the mix at the same time (other than with ios, where iterations of hardware become more powerful with every update).

    Share

Comments have been disabled for this post