Starting Sunday, AT&T(s t) is offering Nokia’s(s nok) Lumia 900 smartphone in a new color and a lower price for all models. The Lumia 900, debuting just three months ago for $99.99, is now available for $49 .99 with contract. A pink version is added to the lineup but a new color and relatively large price cut may not be enough to boost sales.
Late last week, Horace Dediu closely inspected the smartphone sales numbers from both comScore and Neilsen and deduced that Nokia has only sold around 330,000 Nokia Lumia devices in the U.S. last quarter. His math and logic appear reasonable to me, although we’re dealing with estimates.
Still, even if Nokia sold 500,000 Lumias — what I think is an extremely generous rounding up on my part — compared to the number of iOS(s aapl) and Android(s goog) devices, that’s a drop in the bucket. It’s not good for Nokia nor for Microsoft(s msft), when a large carrier such as AT&T isn’t building the Windows Phone user base in a meaningful way. And I can think of at least three reasons why the $49 price drop isn’t likely to change the situation.
First, for not much more money, AT&T customers can buy a new Android phone with the latest hardware and software; think of the new Motorola Atrix HD that debuts at $99, for example. Regardless of my opinion that Windows Phone is a solid operating system with a generally positive user experience, potential buyers will look at a phone like the Atrix HD and see a more powerful device: super-clear high-definition display and HDMI out, for example. While specifications matter less than they did in the past, they can make a good first impression.
“What do my friends use?” is reason number two. If a potential customer comes in to the store having seen their friends using Android phones, services and apps, they’re less likely to give Windows Phone a look; unless they’re very open-minded, that is. And with Android accounting for the majority of smartphone sales in the U.S., you can bet these customers have far more friends with Android devices than with Windows Phone handsets. Also hurting is the fact — reason number three — that the Lumia 900 won’t see Windows Phone 8 when it debuts later this year (subscription required). Android products aren’t known for timely software updates, but at least there’s hope for them; not so with the Lumia 900.
It’s a shame for Nokia and Microsoft — at least, if I’m correct and sales don’t jump after this price drop — because they have good products. But as I’ve noted time and again, the mobile market is one of momentum. Fall behind your competitors and it becomes more difficult to stand out from the pack and challenge the incumbents due to social trends, mobile app lock-in costs and the fast paced changes in hardware.