Nokia Rolls the Dice with Windows Devices

With modest hardware, Nokia’s new phones may struggle to stand out.

Troubled cell-phone maker Nokia today made a long anticipated move to recapture a share of the fiercely competitive smart-phone market with the launch of two handsets running Microsoft’s Windows mobile software.

Smart but tardy: This Lumia 800 is the high-end version of Nokia’s new smart phone.

The Lumia 800 and the Lumia 710 are the first fruits of the Microsoft-Nokia alliance, a high-stakes gamble in a daunting battle with Apple, Google, and others for relevance in the fast-growing mobile-computing market (see “Can This Man Work Magic?” Technology Review, November/December 2011).

Over the last five years, Nokia has experienced a dramatic reversal in fortunes. The company once dominated the high-end phone market with its Symbian-powered phones, but Apple’s iPhone and devices running Google’s Android have jumped ahead.

Nokia still sells many low-end phones, especially in developing countries, but this market could disappear as more powerful devices proliferate. Time is also running out. Amid fierce competition, sales of Nokia smart phones fell 34 percent in 2010, but sales of its low-end phones also fell 16 percent. The company’s market value has halved since February, and third-quarter results showed its smart-phone sales down 38 percent compared with last year.

The new Windows phones were unveiled during company CEO Stephen Elop’s keynote speech at the Nokia World event in London. “We are signaling our intent right now, here today, to be today’s leaders in smart-phone design and craftsmanship,” said Elop, a former Microsoft executive who signed the partnership deal with Microsoft in February.

In a swipe at other manufacturers, such as HTC and Samsung, that have already launched Windows phones, he added: “Lumia is the first real Windows phone.”

The hardware unveiled by Nokia offered few surprises, however. The Lumia 800 design is identical to that of the Nokia N9. Inside it is a 1.4-gigahertz processor and 512 megabytes of RAM, which lags behind the dual-core chips boasted by the iPhone 4S and Samsung Galaxy 5. The Lumia has a 3.7-inch AMOLED 800-by-480 screen that sits under curved glass to give it a raised effect, and an eight-megapixel camera with an f2.2 aperture lens that will let in more light than most other phones, although the lack of a front-facing camera may put off those who use video calling. The phone is 12 millimeters thick, which is bulkier than the latest Android phones.

The software is the biggest innovation. The phone’s home screen consists of colorful tiles that display important content, such as news, weather forecasts, and social network updates. There are no buttons on the front of the handset. A user would navigate back to the home page by swiping. A feature called People Hub aggregates information on a user’s contacts from different social networks alongside a “what’s new” feed.

The Nokia phones use the latest Windows Phone 7 operating system, called Mango, which lets apps run simultaneously. An Xbox Live hub also provides a central location for games, and integration with a user’s home console. Kevin Shields, Nokia’s senior vice president of program and product management, emphasized custom applications that were created for its Windows phones, including a voice-guided GPS navigation system and a music-streaming service.

The Lumia 800’s 16 gigabytes of storage may be low for some, but it does come with 25 gigabytes of Skydrive cloud storage. Cloud computing is likely to be an important feature of newer smart phones. Apple’s latest operating system, iOS 5, includes iCloud, which stores images, music, documents, and other content, and syncs that content between different devices.

The Lumia 800 goes on sale next month at around 420 euros (U.S. $584) in the U.K., France, Germany, Spain, Italy, and the Netherlands. Nokia said it would launch the phone in Hong Kong, India, Russia, Singapore, and Taiwan by the end of the year, adding that it would release a “portfolio” of Windows phones in the U.S. early next year.

The Lumia 710, at around 270 euros (U.S. $360), is aimed at the more budget-conscious, with the same processor but eight gigabytes of internal storage, 15 gigabytes of Skydrive storage, and a smaller battery. It has a slightly different design, with curved edges.

Nokia also unveiled several non-Windows phones—the Asha 200, 201, 300, and 303—aimed at emerging markets. 

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