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Operators: Nokia would sell better with Android

Nokia Lumia

By Nicole Kobie and Reuters

Posted on 17 Apr 2012 at 09:36

Nokia's handsets would sell better if they ran Android and not Windows Phone, mobile operators have said.

The Nokia Lumia isn't good enough to compete with Android rivals or the Apple iPhone, according to four European mobile operators interviewed by the Reuters news agency.

"No one comes into the store and asks for a Windows phone," said an executive in charge of mobile devices at one European operator selling the Lumia 800 and 710.

"Nokia have given itself a double challenge: to restore its credibility in terms of making hardware smartphones and succeed with the Microsoft Windows operating system, which lags in the market," the executive said.

If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell

He said Microsoft's software worked nicely with PCs and allowed you "to do tonnes of cool things" but few customers knew this. "If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell," he said.

Alternative required

Operators want a viable alternative to Apple and Android, not only to offer customers more choice but to give them a stronger bargaining position with phone manufacturers.

"It's good for operators if we can reduce the dominance of Apple," said a spokesman for a second telecoms carrier, who asked not to be named.

Apple uses its dominant position to dictate to operators the minimum number of iPhones they must buy and the size of subsidies they must offer to reduce prices for consumers. The carriers then have to recover the cost by signing up customers to multi-year contracts.

Apple's iPhone costs operators between €600 to €700, while top-end Samsung smartphones can cost €300 to €500. Some complain the Lumia line is too expensive, despite Nokia selling the range to operators and distributors for an average €220 last quarter, well below what had been expected.

AT&T sells the new Lumia 900 for $99.99 with a two-year contract and is marketing it heavily, with it selling out in some US stores. It is expected to arrive in the UK in the next few weeks. Rival operator T-Mobile says the Lumia 710 is among its most popular phones.

In Europe, although most operators are offering the new Nokia Lumia Windows phones, few use the weapons they have to push them: deeper subsidies or bigger marketing budgets.

"This implies that sales to the consumer are proving to be more difficult than we would have expected," said Richard Windsor, global technology specialist at investment bank Nomura.

A spokesman for a third operator who did not want to be named said: "If they could lower the price we think they could sell more. It might be worth making it a bit of a loss leader to get it out of the door. It's not rocket science."

Microsoft marketing

Operators are also frustrated that cash-rich Microsoft is not spending more on marketing Nokia Windows phones. "The operators say to Nokia: 'We will try to bail you out if you and Microsoft come with the marketing money,'" says telecom consultant John Strand.

One device chief at a European operator agreed. "Ultimately, Nokia and Windows are challengers and they either need to come to market with a really disruptive, innovative product or a huge marketing budget to create client demand. So far they have done neither."

Issuing a profit warning last week, Nokia fell short of analysts' estimates by saying it had sold over two million Lumia smartphones in the quarter ending March. Apple sold 37 million iPhones in the last quarter of 2011 while Samsung has sold more than 40 million Galaxy smartphones since the range went on sale in June 2010.

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User comments

Marketing...

If MS were to market the Nokia range, they would have to also give equal budget / exposure to other WP7 manufacturers, wouldn't they? Or at least offer it.

I think that Nokia have a chance, if they can keep the Nokia faithful. Those that don't know about smartphones, and don't really care, but always buy Nokia.

By big_D on 17 Apr 2012

I've had some time with a Lumia 900 and a SE Xperia phone. Much preferred the Lumia to the SE.

By james016 on 17 Apr 2012

Erm, this makes no sense.

So it would do well with Android but they want a third OS to compete with iOS and Android.

It lacks features but "allows you to do tonnes of cool things"

It's too expensive but cost far less than the others and is "well below what had been expected"

It's not selling very well but "with it selling out in some US stores" and "is among its most popular phones"

So really, from this I've learn something I suspected all along, the Networks are a clueless bunch of tools.

By JStairmand on 17 Apr 2012

Teen choice as well

It seems in the local school here the Lumia 710 is a very popular choice almost rivalling BlackBerry amongst the younger generation. The price is right and the integration of various messaging services into the phone hits the right spot for that market demographic.

By skarlock on 17 Apr 2012

MS and Win 8 Marketing Drive

My suspicion is that MS are waiting until Windows 8 is launched to push a marketing drive showing how 8 integrates across all platforms: phone, tablet, computer. That would make more sense than really pushing Windows Phone 7 with 8 only a few months away.

By skarlock on 17 Apr 2012

Oops

Another kick in the teeth for the MS phone. Why did MS mess about for so long, giving Apple & Google a head-start on the app-store. They will never catch up at this rate.

By mrmmm on 17 Apr 2012

Clueless

I'm not sure which company is most to blame here, they seem to be vying with each other for being the most clueless in this particular marketplace. It's either going to be Microsoft, or Nokia, but since Nokia are run by an ex-Microsoft reject you have to point the finger at them as being the most clueless here. Then again, MS looked at the bare sales figures of Nokia ohones and assumed that Nokia must be experts; they clearly aren't, and that's bad judgement from Microsoft.

Biggest fools in this are clearly Nokia though, after all, MS can just walk away from this - Nokia may be permanently crippled.

By SwissMac on 17 Apr 2012

@SwissMac

To be fair Nokia were in a desperate state after simply not moving with the times and relying too heavily on an in-house OS for their smart phone offerings. As I understand it, the main reason they opted to focus on Windows as their phone OS was because they would have struggled to compete in a 'me too' environment running Android. At least their choice of Windows gives them the chance to compete with something different.

As a personal choice I do like the Metro interface of WP7, I had been an Android user, and had a first gen iPhone but didn't get on with it at all. The WP7 user experience persuaded me to move away from Android during my latest phone upgrade last year and so far (with the exception of not enough APPs yet) I'm very happy with the switch.

By skarlock on 17 Apr 2012

Maybe the operators are upset as they can't butcher the OS like the can with Android.

By james016 on 17 Apr 2012

'No one comes into the store and asks for a Windows phone'

Actually I don't believe most people come in to a store and ask for an Android phone either. Most people just want a phone that works and don't really care what powers it. I'd guess this is probably a little different for the iPhone but, again, if the salesman showed them a viable alternative I imagine some of them would be happy to convert.

By jgwilliams on 17 Apr 2012

Nokia have a Choice

They can be like th eother operators and create phones for all the open OS's. Why did they tie themselves to MS. They could have created phones for Android as well as Windows. This was a financial strategic disaster. Two big dinasaurs do not travel any faster than one big one - their combined weight will be twice as haeavy and more liable to sink in the mud.

By fionapro on 17 Apr 2012

@fionapro

You could also argue that their combined weight has the potential to be unstoppable if they get the marketing and product placement right.

By skarlock on 17 Apr 2012

@skarlock

They may very well be the fastest in the race to the bottom as they sink in the mud fionapro so graphically describes.

By SwissMac on 17 Apr 2012

surprised ?

not me...

By arturpio on 17 Apr 2012

By comparison to other devices, the Nokia Lumia phones are still a bit too pricey, without matching specs. If I can get an 8GB HTC Radar for less than £200, why would I spend £270 than that on a Lumia 710?

Having said that, I've noticed the price of the Lumia 710 has dropped significantly in some places - I can't imagine at what price the Lumia 610 will come in at. By comparison to other Nokia phones, the Lumias have yet to be proven to be as robust as previous Nokia phones.

By Noe80 on 18 Apr 2012

@SwissMac

According to DailyTech, the Lumina is such as disaster for Nokia that they are running out of stock in the US.

By tirons1 on 18 Apr 2012

'Operaters' schmoterators!

A bunch of greedy crooks given free reign to destroy a marketplace.

The 'Operators' are the people who want it all ways:
* they want to get subsidies from handset makers
* They want to bleed customers on prices
* They refuse to update 'phones in order to keep customers 'upgrading'

iPhone and Android fit this scheme perfectly. iPhone owners regularly upgrade becuase its 'cool'. Android owners upgrade becuase the various carriers ensure that that's the only way to get upgrdaed firmware \ features.

Make no mistake this is a really BIG powerplay in which the Carriers are out to bring Microsoft to heel; in order to maintain their comfy income streams and further reduce competition.

As to the 'substance' of their claims: Bullshit!

By wittgenfrog on 18 Apr 2012

Oh, and just one more thing....

MS absolutely MUST sort out the continuing confusion over wether WP7.x 'phones will be upgraded to WP8.

It looks suspiciously to me that the aformentioned 'Operators' \ Carriers are trying to block MS from updating existing WP7.x 'phones to WP8 when its announced.

This alone will be causing marketing problems for MS \ Nokia. I for one will not be buying a new 'phone that will become obsolescemnt within a few months.

Ever the cynic I assume that the aforementioned 'crooks' are trying to screw cash or some other concessions out of MS \ NOKIA whom they identify as being relatively weak, and thus easy meat.

If I were MS \ NOKIA I'd be telling them to 'get over it' and adopting Apple's model of rolling-out all updates independent of the Operators. Given the lack of support at present, this can hardly weaken MS's position!

By wittgenfrog on 18 Apr 2012

@wittgenfrog

It had occurred to me too that the carriers didn't want old devices upgraded. When WP7 was released MS were adamant that the OS would always be upgraded, a la Apple. I don't understand why they are refusing to comment.

I have a Lumia 800 and I'm very happy with it, but I'll be pretty fed up if it isn't upgraded to WP8.

By jgwilliams on 18 Apr 2012

i love nokia

nice post...i love nokia...
http://about-phone.blogspot.in/2012/04/wonderful-p
hone-nokia-asha303.html

By bimansweet on 18 Apr 2012

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