The Nokia Lumia 900 launch: A huge gamble that will pay off

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AT&T will release the Nokia Lumia 900 this Sunday, and the marketing blitz has begun with a series of commercials that point out the flaws of the iPhone and Android devices. That campaign is the opening salvo of what AT&T says will be the biggest product introduction in its history, surpassing even the iPhone launch. And I think those marketing efforts will be the fuel that powers Windows Phone to become a thriving mobile operating system alongside Android and iOS.

Marketing and carrier relationships are still key in the U.S.

There’s no question that effective advertising is crucial in selling handsets. Apple wrote the book with its iPhone commercials, of course, and Verizon Wireless (and its wallet) was instrumental in moving the Motorola Droid in 2009. Meanwhile, Palm’s webOS flopped when the manufacturer’s ads for the Pre were confusing and creepy and its carrier partner Sprint declined to support the phone with an aggressive ad campaign.

Network operators bring more than deep pockets to the table, too. They offer high-profile brands and massive retail footprints, which AT&T will lend the Lumia 900 by giving the phone prime real estate in its stores. Also while AT&T hasn’t disclosed how much it’s paying to subsidize the device, it will offer the Lumia 900 at $99 with a two-year contract – a remarkably cheap price compared to comparable handsets like the iPhone 4S (which starts at $199) or the Samsung Galaxy S ($199). In fact, bargain hunters can already preorder the Lumia 900 for just a penny at Amazon.

And while both Microsoft and Nokia have struggled mightily over the last few years, they have teamed to offer a top-notch product. As this head-to-head comparison from PCMag.com illustrates, the Lumia 900 offers a larger screen than the iPhone 4, and the new version of Windows Phone (dubbed Mango) is comparable to Apple’s iOS. Almost as importantly, its support for LTE enables substantially faster network speeds. Also, Windows Phone Marketplace recently surpassed 80,000 applications and is adding about 10,000 new apps a month, clearly indicating that developers are increasingly building for the newer platform.

Alliances borne of necessity

Both Microsoft and Nokia have learned the hard way that strong carrier relationships are imperative in the U.S. mobile market. Microsoft’s Kin was doomed when Verizon Wireless packaged the feature phone with full-blown data plans – creating a pricey albatross that might not have existed if the companies had better relations. And Nokia’s failure to forge alliances with U.S. operators is well documented, from its insistence on offering competing content services through Club Nokia in 1998 to its refusal to customize user interfaces to include carrier branding.

But the newfound strategy for both companies comes as carriers are aching for a platform that can compete with Android and iOS. Google’s operating system continues to struggle with fragmentation problems that will only get worse as more Android tablets come to market, and Apple – which has never been a strong carrier ally – will become increasingly inflexible as the iPhone’s audience grows. Meanwhile, BlackBerry continues to flail and no other operating system has emerged as a viable threat to the two leaders.

The Lumia 900 will eventually be available on other carriers in markets around the world, of course. But Microsoft and Nokia are clearly going all-in with AT&T, which means next week’s launch will go a long way toward determining the success of Windows Phone in general. Failure likely means the end of Microsoft’s hopes of regaining relevance in mobile, relegating Nokia to a second- or third-tier handset manufacturer with precious little to differentiate itself. But all the pieces are in place for the Lumia 900 to be a runaway hit for AT&T in the coming months. If that happens – and I believe it will – mobile will suddenly become a three-horse race between Apple’s iOS, Google’s Android and Microsoft’s young platform.

Question of the week

How important is AT&T’s launch of the Nokia Lumia 900 to Windows Phone?

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