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Analyst reaction mixed to Nokia Windows phones

Nokia Lumia has strong features, but will still face highly competitive market

Analyst reaction mixed to Nokia Windows phones
Nokia Lumia - strong features, but not "an iPhone or Galaxy killer".

Nokia's launch of its first phones based on the Windows Phone 7 operating system has drawn mixed reaction from analysts.

In general, analysts were impressed by the devices themselves, but unsure that they will be enough to return Nokia to dominance in the smartphone segment.

With Nokia having lost out to its competitors in the segment in recent years, and Microsoft having failed to gain much traction in the mobile space, Ovum analyst Nick Dillon said that both companies have much riding on outcome of the launch

"Having replaced its own Symbian platform with Microsoft's, this is essentially a restart for the handset manufacturer, which has struggled to adjust to the new dynamics of the smartphone market following the launch of the iPhone in 2007," he said.

"The challenges which Nokia faces are significant - many potential Windows Phone customers will have already bought an Android or iPhone and will have some form of attachment to those platforms. They will have invested in the platforms from a services, financial (via applications) and a familiarity perspective, and as such Nokia will have a challenge to convince them to switch to what is a largely unknown, and therefore risky, alternative. For consumers, they will need to have a clear and simple answer to the question: ‘why should I buy this instead of an iPhone or Android?'" Dillon said.

Nokia had gone some way to differentiating its Lumia handsets from other Windows Phone devices, Dillon said, through the addition of strong features from its own stable. The inclusion of Nokia Maps, the Nokia Music application and its radio streaming service, and the f2.2 Carl Zeiss camera with ‘touch to focus', a function unique to Nokia's Windows Phone devices, should help drive interest in Lumia, Dillon predicted.

"While none of these on their own are standout features, they at least provide Nokia with some ammunition for its marketing and sales team to market the devices in an increasingly competitive market," he said.

John Delaney, research director with IDC, was impressed by Nokia's speed to market with Windows-based devices, particularly that the company will have the phones on sale before the important holiday period, but he did not believe the Lumia will be a market changer.

"Given Nokia's recent reverses in the smartphone market, Lumia clearly faces something of an uphill struggle. We don't think the Lumia 800 is an iPhone or Galaxy killer. Those two franchises still have very strong momentum, and there's nothing unique about the new phone that looks powerful enough to stop them in their tracks," Delaney said.

Delaney also thought that the device had some stand out features, including good management of social functions; ease of information accessibility through the ‘Live Tiles' feature; familiar browsing experience from Internet Explorer 9 and strong mapping and navigation functions, and he also thought that the phone had a strong ‘look and feel' to it.

In order for the Lumia to be a success, Nokia would need to work closely with the operator channel to push the devices, and invest heavily in marketing, something which he noted Nokia was already doing.

"The Lumia phones do have some strong selling points in their own right... and they offer a look and feel that's radically different from anything seen previously on a Nokia device. These devices are strong contenders - especially if Nokia's current round of intensive negotiations with the operator channel results in good in-store prominence and some attractive package deals." Delaney said.

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