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Nokia Buzzkill

Nokia excites and disappoints.
February 28, 2012

The Finnish handset maker Nokia made plenty of news yesterday at the Mobile World Congress in Barcelona, announcing new phones, displaying the fruits of a partnership with Microsoft, and hinting at a future in making tablets. Having declared it would put out “significant industry news” at the conference, buzz grew and shares rose in the run-up to Nokia’s Barcelona moment. But by the end of the day, Nokia’s actual news apparently failed to impress investors; its stock closed 6.2% lower on the NYSE, at $5.44, according to the Wall Street Journal.

The spirit of disappointment was summed up by one analyst talking to the Journal: “We were looking for a cheap Windows phone at $200 on a new version of the software…[Instead] we got a phone at $260 on the old software.”

The phone he was referring to was the Lumia 610, one of Nokia’s main announcements at Barcelona. The phone is suggested to retail at 189 Euros, or a little over $250. Lumia phones are the fruits of a partnership with Microsoft that was somewhat hastily announced last year, before its details were even hammered out. Nokia and Microsoft have since produced four Lumia phones.

The 610 is significant, ironically, as the least ambitious of the Lumia phones–at least in terms of hardware. It costs 30% less than the Lumia 710, which previously occupied the lowest end of the Lumia lineup. But by introducing a phone at a new price point, Nokia and Microsoft think they can conquer–or at least, get a toehold in–new markets. Terry Myerson, a vice president of Microsoft’s Windows phone unit, told the Times, that the new, lower-cost Windows phones announced Monday would increase the potential market for Windows phones by about 60% worldwide. Nokia hinted that the specs and price point of the 610 weren’t necessarily as low as the company could go; an even cheaper smartphone with wider reach could conceivably be in the offing. (Meanwhile, people looking to get a genuinely cheap Nokia phone can stick to its Asha line; you can pick up one of those for less than a hundred bucks.)

Also on Monday, Nokia also introduced, somewhat weirdly, a new phone running its Symbian smartphone OS–an old operating system that Nokia has vowed to phase out in favor of Windows. (Remarkably, back in 2008, Symbian once powered 50% of smartphones; that market share has of course plummeted with the rise of iOS and Android.) The Nokia 808 PureView seems more camera than smartphone; its main selling point is its 41-megapixel camera, capable of poster-worthy images, according to the BBC. That’s twice as many megapixels as on many professional cameras; the phone is expected to retail around $600 when it comes out in May.

“We brought [the Nokia 808] to Symbian first, because it was the fastest way to bring it to a commercial environment, where we could learn from our consumers and they could learn about this new experience,” CEO Stephen Elop told the WSJ, in a quote representative of similar ones he gave other outlets puzzled by the move.

The Times’s Kevin O’Brien managed to buttonhole Elop to get two newsworthy quotes: one to the effect that despite their strong partnership, Nokia and Microsoft have no plans to merge or anything of the sort. (A hardware/software partnership under one roof would be reminiscent of Google’s pending acquisition of Motorola Mobility, but Elop said Nokia had too much business in non-Microsoftian realms.) O’Brien also wangled a quote to the effect that Nokia and Microsoft might very well be entering into a tablet partnership sometime soon. “We are very, very pleased with the consistency of the user experience that is coming from the Windows phone and moving up onto tablets and slates and PCs as Windows 8,” said Elop. “So we look at those things and say, boy, if there’s a family opportunity there, that’s something we’ll look at very carefully.”

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