Nine News Vic  Thu Oct 27 2011

Nokia, facing fierce competition to remain the world’s top mobile phone maker, has launched its much anticipated first smartphones using the Windows platform to only a muted welcome.

The Finnish company launched the Lumia 800 and Lumia 710 smartphones, to be rolled out starting next month on selected markets.

The success of the new phones is seen as do-or-die for Nokia, with its market share plunging as smartphone users flock to the hugely popular iPhone by Apple, RIM’s Blackberry and handsets running Google’s Android platform.

Chief executive Stephen Elop in February announced a radical restructuring and the phasing out of Symbian as Nokia’s smartphone software in favour of a partnership with Microsoft.

“Eight months ago, we shared our new strategy and today we are demonstrating clear progress of this strategy in action. We’re driving innovation throughout our entire portfolio, from new smartphone experiences to ever smarter mobile phones,” Elop said at a Nokia event in London that was webcast live on Wednesday.

“We are very proud of Lumia and everything it represents. Lumia means light; this is a new dawn for Nokia,” he added.

Yet the market seemed little impressed as Nokia shares were up 0.7 per cent in late afternoon trade on a Helsinki stock exchange also up just 0.7 per cent.

Analyst Michael Schroeder of FIM Bank said the launch was “not enough” to help Nokia immediately begin regaining market share.

“No, they need a lot more to stop the slide,” he said. “They need broader distribution (of the new phones), they need global distribution before they can start gaining market share,” he added.

The Lumia 800 will feature Internet Explorer 9, free voice-guided navigation services and free music and image storage.

The Lumia 710 is a simpler version.

Schroeder estimated Nokia’s market share for smartphones at 15 per cent in the third quarter, down from 18 per cent in the previous quarter, and put its overall market share for mobile devices at around 25 per cent, down from a peak of around 40 per cent in early 2008.

“I think they will hit a low point next summer … before they start recovering,” Schroeder said.

Helena Nordman-Knutson, analyst at Oehman Fondkommission, said Wednesday’s launch was “just the first step”.

“Nokia also has to prove that it can sell the phones. But this of course gives Nokia a little breathing room,” she told the TT news agency.

Nokia last week posted a third quarter loss of 68 million euros ($A91.07 million) , far better than the 321 million euro loss forecast by analysts.

But the company also reported a 25 per cent year-on-year drop in sales and a 39 per cent slump in sales of smartphones.

One of Nokia’s strategies to regain market share is to sell the Lumia phones at reasonable prices, according to analyst Neil Mawston of Strategy Analytics.

“It’s fair to assume that Nokia’s margins on these products are somewhat squeezed,” he told Dow Jones Newswires.