Is Nokia's Lumia Too Little, Too Late?
Apr 17th 2012 9:07PM
Updated Apr 17th 2012 9:08PM
Does Ma Bell see something no one else does?
AT&T (NYS: T) is betting big on Nokia's (NYS: NOK) new Lumia 900, as in bigger-than-the-iPhone big. The wireless carrier is putting its marketing weight behind the new family of devices and Microsoft (NAS: MSFT) Windows Phone to try and aggressively play the hand it's been dealt.
Anecdotal evidence suggests that the Lumia 900 is seeing a strong start out of the gate, as reports gather of low availability and constrained supply. An AT&T exec said that Lumia sales have "exceeded" expectations so far. Can this be the device to save Microkia?
Not so fast, my Foolish friend. The Lumia 900 saw a bit of a bump in the road, as a minor software bug had been hindering the device's ability to connect to data networks. Nokia is responding smartly by quickly issuing an update to squash the bug, while simultaneously offering a $100 credit that covers the $100 contract price -- making the device free for a limited time. (The bug has since been fixed and the promotion is now over.)
However, there are also reports that Nokia and AT&T had been actively pulling Lumia 900s off shelves specifically because of the bug and sending them back to Nokia to repair the devices. If true, that would be a clever move: Offer the phone for free to build buzz, and then silently recall the phone to fix it while making it appear sold out to build more buzz. A twofer!
I'm not the only skeptic. Reuters reports that four major carriers in Nokia's European home turf aren't impressed, either. Carrier execs don't believe the Lumia family of devices is good enough to compete with Apple's (NAS: AAPL) iPhone or Google (NAS: GOOG) Android offerings like Samsung's popular Galaxy lineup.
Telecom operators think the devices, while sleek and bold, are overpriced and lack innovation. They also say Microkia isn't putting much money into marketing the devices and that consumers have negative perceptions because of battery and software bugs found in the earlier models. One unnamed executive said, "No one comes into the store and asks for a Windows phone." He continued, "If the Lumia with the same hardware came with Android in it and not Windows, it would be much easier to sell."
Just last week the Finnish phone giant slashed guidance. Despite the signs that the Lumia may be off to a strong start stateside, it might be too little, too late.
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At the time this article was published Fool contributor Evan Niu owns shares of AT&T and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Microsoft and Apple. Motley Fool newsletter services have recommended buying shares of Nokia, Apple, Microsoft, and Google and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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