Terrapin Note- Nokia is getting some pretty strong buzz coming off of yesterday's Windows Phone 8 launch event held by Microsoft in San Francisco, as well as the continued media and retail blitz (Kelly Clarkson at the new Marin store Saturday) around the broader Windows 8 launch. The announcement of plans by Verizon to carry its first Nokia phone in three years (see story below) confirms prior expectations and adds to recent launch details from AT&T and the short lived Best Buy pre order period. As with the T launch the phone comes with an attractive price, $100 with contract, though represents a slight step down in functionality relative to the Lumia 920 with 16G of storage for example.
There has also been a steady stream of news around international launches with various models headed to the UK , China and launching in Canada today. Nokia also recently launched of a new lower end smartphone platform in the Lumia 510. We reiterate our view that this is a fair bit of mometum for a smartphone business still considered valueless by Mr. Market.
Nokia to Sell Phone Through Verizon to Step Up U.S. Push
Nokia Oyj (NOK1V), struggling to revive U.S. sales, will start offering a handset through the country’s largest wireless carrier for the first time in three years, targeting new smartphone users.
Verizon Wireless will start selling the Lumia 822 as part of its “fall portfolio,” Nokia said today in a statement, without giving exact date or price details. The device is aimed at those moving up from a more basic handset or seeking to transfer from a BlackBerry, for example, said Chris Weber, head of sales and marketing.
A deal with Verizon Wireless, which has about 100 million subscribers, expands Nokia’s push in the U.S. beyond AT&T Inc. (T) and T-Mobile USA as the Espoo, Finland-based company tries to halt market-share losses to Android devices and Apple Inc. (AAPL)’s iPhone. The agreement is also a boon for Microsoft Corp. (MSFT), whose new Windows Phone 8 operating system runs the Lumia 822.
“This is a market that has lots of impact globally and lots of influence, so it’s one we have to get right,” Weber, 47, said in an interview. “It’s really important for us to be successful in the U.S.”
Nokia, which controlled more than half of global smartphone sales before the first iPhone and Android devices were introduced, jettisoned its homemade Symbian software last year in favor of Windows to stop users from defecting. Its market- share decline has accelerated since, with the company accounting for just 4 percent of the worldwide smartphone market in the third quarter, down from 14 percent a year earlier, according to research firm Strategy Analytics.
Shares of Nokia have lost about 90 percent since Apple started selling the iPhone in 2007, and dropped 1.2 percent to 1.98 euros at 1:51 p.m. Helsinki time.
The U.S. market is crucial in the smartphone business because most innovative devices are often introduced there, and handsets that become successful there gain attention globally and tend to find buyers in other countries. That “halo effect” is the biggest reason Nokia needs to win over U.S. customers, said Weber, who was named to his current role as global sales chief in June after spearheading Nokia’s re-entry into the North American market.
Nokia accounted for about 2 percent of U.S. smartphone purchases in the second quarter, according to Strategy Analytics. The iPhone and devices using Google’s Android software combined for about 90 percent.
“The U.S. is a huge market and one where Nokia has not seen any significant sales in recent years,” said Geoff Blaber, an analyst at CCS Insight in London. The market is “essential for Nokia to capture if it’s to seize some high-margin business.”
The Lumia 822, the first Nokia phone sold at Verizon Wireless since the 7705 Twist in 2009, is aimed at the almost 100 million U.S. mobile-phone users who still don’t have smartphones, Weber said. It follows other Lumia devices Nokia has introduced for the U.S. market in the past year as part of its comeback bid, including the higher-end Lumia 900.
“What we wanted to do was establish a beachhead -- we feel like we’ve done that and we need to grow on that,” Weber said.
The Lumia 822 features software called City Lens that displays the names of restaurants and shops when users point their camera at them. The phone also comes with turn-by-turn navigation, while special map software shows customers nearby attractions.
Nokia is betting on the Windows operating system and its business functions to also appeal to U.S. corporate customers abandoning Research In Motion Ltd. (RIM)’s BlackBerrys, Weber said. Weber has business-customer experience after spending 15 years at Microsoft before joining Nokia last year.
Weber was brought in by Chief Executive Officer Stephen Elop, who himself joined from the software maker in 2010.
“Winning U.S. customers is a top priority for Nokia, and Chris’s efforts to strike our first deal with Verizon in over three years is proof that we’re on the right track,” Elop said in an e-mail.