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Can One Phone Save Nokia and Microsoft?

The Lumia 900 is Nokia’s attempt to draw level with Apple and Google and also carries the hopes of Microsoft.

It’s blue, plastic, and could decide the fate of two multibillion-dollar companies. 

The Lumia 900 was launched by Finnish phone company Nokia at the Consumer Electronics Show in Las Vegas today with surprisingly frank talk from the company’s CEO about how both his company and Microsoft trail in the market for smart phones.

Steven Elop repeatedly drew on military metaphors to describe how he planned to assault the U.S. market. “Clearly there are strong contenders already on the field, [and] our strategy has been to establish a series of beachheads,” he said, before unveiling the new handset, which comes in either black or cyan, and will be available on AT&T’s 4G network in coming weeks. “From that beachhead, you will see us push forward,” said Elop.

The warhorse leading that charge, the Lumia 900, is an LTE device with a polycarbonate plastic case. It has a 4.3-inch screen with an OLED display that Nokia nicknames “clear black” and uses a technology unique to the company to deliver truer blacks than most OLED displays, said Elop. The phone’s camera offers a wider angle of view than most smart phones, said Nokia senior vice president Kevin Shields while demonstrating the device on stage. He also boasted about the camera’s large aperture, which means it lets more light reach its sensor. “The front camera lets in as much light as the back camera on pretty much any other smart phone out there,” said Shields. The price for the Lumia was not announced, but Elop claimed it would be “competitive.”

Nokia’s partner of just one year, Microsoft, has as much riding on the Lumia 900 as Nokia does, as underlined by the surprise appearance of Microsoft CEO Steve Ballmer on stage with Elop. He underlined the commitment of the two companies to one another, one that cynics might say is due to the fact that each has nowhere else to go.

At the time of the agreement between the two companies, Nokia found itself without a smart phone operating system able to punch its weight against those of Apple and Google. Microsoft had just reinvented its struggling mobile operating system but faced an uphill battle turning the heads of phone manufacturers, such as Samsung and HTC, that had enthusiastically embraced Google’s Android operating system.

“We didn’t sign a contract to work together until less than a year ago,” said Ballmer. “To go from concept and discussion to real engineering partnership to delivery is fantastic.” He went on to call the Lumia 900 an “incredibly important milestone” before acknowledging that Windows Phone is far from on par with its competitors. “There’s a lot of room to grow in terms of selling Windows phones,” said Ballmer. “This third ecosystem is really going to pay off for users, for developers, for operators, and I trust for our two companies.” There are now more than 50,000 apps available for Windows Phone, said Ballmer. Apple currently states that there are more than 500,000 apps for the iPhone, while Google said in October that there are over 400,000 for Android phones.

Latest model: The Lumia 900.

Elop claimed that Windows Phone provided a genuine alternative to models pushed by Apple and Google’s mobile operating systems, which share basic design features like the way apps appear as icons. “The product itself has to stand for something, it has to be differentiated,” said Elop, praising the “live tiles” of Windows Phone. The tiles are both shortcuts to apps and also notification areas that can show things like Facebook activity and Twitter messages. That design is much more valuable, said Elop, than “yet another collection of static applications on a grid.”

He conceded that Nokia would have to make efforts to communicate that to consumers more familiar with Apple and Google’s offerings, saying that 2012 would see the company spend money on that. Such is Nokia’s need to see Windows Phone charm consumers that Elop even said he welcomed competition from other companies launching phones with that operating system. “I’m happy that Samsung and others are introducing Windows devices, because our principal competition is other ecosystems,” said Elop.

Asked whether Nokia would release tablet computers, perhaps based on Microsoft’s forthcoming Windows 8, Elop said that it would depend on being able to offer something different from existing tablets. “You want to ensure differentiation, as we have for phones, with camera optics, design, and the operating system,” he said. “If we believe we can bring differentiation to tablets, whatever it may be, then clearly, it’s an opportunity for Nokia.”

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