Will a cheaper Lumia phone save Nokia?
The telecom falters in the competitive smartphone market, and some analysts are predicting a bleak future.
Can Nokia save itself? Here's what some experts are saying:
Nokia is in way too much trouble: Nokia's sales are bad, but it's cash situation is even worse, says Henry Blodget at Business Insider. "The company is burning cash at a mind-boggling rate, and it's about to run into a cash crunch." At the current rate of nearly $1 billion per quarter, Nokia will be bankrupt in less than two years. It's gotten so bad that Nokia chief Elop is talking "about the need to conserve" cash. The company has to be "super-aggressive to have any chance of saving itself." Nokia is in a bind, and it "may well drown."
Actually, Nokia is in a good position to recover: "As bad as Nokia's financials look right now," you can't deem Windows Phone "a failure just yet," says John Biggs at TechCrunch. Nokia is "essentially waiting" for the Lumia to catch on, and its cheap pricing strategy will allow it "to gain market share." In fact, "Windows Phone is better than Android," and those who write Nokia off do so at their peril.
And Nokia can still grab new smartphone buyers: "Android and Apple (AAPL) have a lock on the smartphone market at present," says Charles Arthur at Britain's The Guardian. But about half of cell phone users still haven't switched to smartphones, meaning Nokia has a chance to lure new customers "with the right incentives." The next half of smartphones users "won't necessarily make the same choices" or "spend as much money on a phone," which could play into Nokia's hands.
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I am a huge fan of the changes they have made and believe they did them just in time to save themselves. I see far more upside based on some very simply facts about Nokia:
- Robust patent portfolio
- Top tiered (now streamlined) talent= Quality products and launch
- Mind share
- Relationship with Microsoft
- Stable on the back end with Siemens for networking
Its very easy to get wrapped up in daily blogs with minute to minute action, but the facts here are that it Android took well over a year establishing itself as even existing amongst the general population.
What Microsoft has is what Nokia didnt. Control of data for searching, storing and providing streamlined access to things people need when they access the web. Let alone native Office and Outlook integration for business users. The streamlined interface with MetroUI across all Windows based platforms (XBOX, Windows 8 etc) pretty much means they have covered various age groups.
Users like usability and an easy experience to get from point A to point B. I see this was their long term strategy a few years ago because they know they can really dominate in that arena.
It will be far easier for a younger XBOX user to use Windows Phone simply because of the legacy like nature in how they user interacts with it a la "Oh I dont need a manual because this works like XBOX Dashboard" or converting to Windows 8.
MSFT and NOK are looking forward. Sure they are bleeding money right now, but think they can turn the ship around in time. The Amazon reviews and blogs are very positive thus far on the Lumia line.
It's really too early to tell. Let's not forget Apple was in a similar situation in 97 and also trading below $5/share, when they went to Microsoft for a $150M loan.
Nokia can, and should, get cash from Microsoft - so at least they can watch their Windows Phone products mature and keep the ship moving.
Use a Nokia Windows Phone for a few weeks, then you'll see the potential.
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