Nokia, Microsoft Come Out To Play

There is a daunting qualification for the marketing team in Redmond at the end of David Pogue’s rave review in the New York Times of the new Windows Phone 7.5 software (code-named Mango) this morning: “Microsoft may face quite a Catch-22, no matter how superb its work: Windows Phone isn’t popular because it isn’t popular.”

And then, heartlessly, he reminds Microsoft of a different attractive gal it once had who got away: Zune. “In the end, it was a beautiful, capable, highly refined music player -- but nobody bought it. Why would anyone buy the kooky off-brand player, when the iPod offered safety in numbers?”

Pogue’s positive sentiments echo the assessment of the Wall Street Journal’s Katherine Boehret, who checked out a beta version of Mango in June and wrote a review under the headline “Mango Phone: A Peach of a Late Bloomer.” She called it “a mix of elegance and whimsy that’s a treat to use.



The problem is that even if you want to tango with Mango, there aren’t that many Windows phones out there to dance with. The good news, however, is that Nokia yesterday reentered the smartphone derby with “the first fruits of its [eight-month-long] alliance with Microsoft, in a bid to curb its declining market share,” as Kevin J. O’Brien puts it in the New York Times.

“Nokia really needed this to happen today, and this is a new start for the company,” Canalys analyst Pete Cunningham tells O’Brien. “This helps stop the bleeding and will help Nokia get back in the game.”

But, again, there’s a qualification. The two devices –- the Lumia 800 (€420 /$584) and the Lumia 710 (€270/$376) are only available in six countries in Europe for now. They’ll be in Asia by year-end. But Nokia CEO Stephen A. Elop, who has been an executive at Microsoft, says his company is in “advanced talks” with the four leading U.S. carriers (Verizon, AT&T, T-Mobile and Sprint) and that its smartphones here will run on 3G networks as well as 4G networks using LTE, or Long Term Evolution.

“When we enter a market, it is not just dipping your toe in the market, but coming in with the appropriate levels of investment by us,” Elop says. “It takes work. It takes money. We are being very deliberate.”

The Wall Street Journal’s Christopher Lawton points out that its alliance with Microsoft is “highly controversial within the conservative Finnish company.” But Elop is certainly personally jazzed about the possibilities. In an interview, he “said that he could feel his phone vibrating in his pocket as he received text messages from supportive colleagues after he said Lumia was the first real Windows phone.”

Among other niceties, the Lumias have exclusive apps such as voice-guided navigation (Nokia Drive) and a music service called Nokia Music. (Samsung and HTC also sell Windows phones.)

In a video sidebar, the Journal’s Tech Europe editor, Ben Rooney, believes the two new competitors to devices running the Android and iPhone operating systems are “remarkably well-priced products that carry a lot of punch.” But can they “save” Nokia? He says he’ll have to resort to the cliché that “the jury is still out” but that he’s “not hopeful.”

The Financial Times’ Dan Thomas and Maija Palmer talked to an anonymous phone executive who also said the jury is deliberating on the viability of the Nokia and Microsoft partnership but who believes that a “third so-called phone ‘ecosystem’” is “crucial.”

 “Who will win the race for third? Neither have been a success in this space so far but never bet against Microsoft,” he says.

Thomas and Palmer write that the phones “do not appear overly innovative at first” but point out that “Nokia says the key to success will be the future product cycle, rather than the single new phone.” They do applaud the eight-month turnaround from conception to launch. Products generally take 18 months to gestate at Nokia.

Mike Issac, writing in Wired, offers a little heavily qualified optimism of his own. “Nokia’s failure in the smartphone space isn’t a fait accompli,” he writes. But the company will have to rally support around three key initiatives.”

They are: 1. Continuing to design the Lumia –- which “oozes with child-like whimsy” –- differently from the “industrial” design of Android devices. 2. Provide a “global alternative” and 3. “Stress app visibility over sheer app numbers.”

“Nokia and Microsoft have their work cut out for them,” Issac concludes. “Apple and Google have more market share, more mind share, a frenetic and evangelical user base, and a multi-year head start.”

But Microsoft and Nokia have both been to the mountaintop before and they’ve both got billions to spend on another journey. The race is on.

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