Is Microsoft Setting Nokia up for Failure?

by Jeff Wiener on February 9, 2012

Nokia desperately needs to make inroads into the North American mobile market if its hopes to reverse its flagging fortunes. Although the Finnish company still sits atop the mountain of global cellphone distributors its abject failure in the smartphone market, clearly the present reality of the mobile market (saying nothing about its future), does not bode well for any continued success, evidenced by several successive quarterly losses.

Now as Nokia, having tethered its cart to Microsoft’s Windows Phone horse, is poised to make its first real entry into the North American mobile market, I come across Microsoft’s marketing strategy for the first of Nokia’s Lumia series of smartphones, a strategy that involves selling the Lumia 800 unlocked for a staggering $899!

Looking to explain this atrocious marketing misstep my mind once again wanders back to the old rumours that perhaps Microsoft’s interest in Nokia goes beyond a mere OS to perhaps all out acquisition

…and what better way to push Nokia towards the thought of selling off its mobile division than to have its Hail Mary pass end up on the turf.

Bear with me for a moment while I explain. When Nokia and Microsoft struck a deal early last year for the former to employ the Windows Phone operating system on its high end smartphone devices it was clear that the deal made sense from Nokia’s perspective, a company that had yet to produce anything remotely popular in the smartphone market.

What had analysts somewhat confused, however, was Microsoft’s participation in the agreement, as even at that time Nokia was circling the mobile drain—not a great bet for Microsoft who was looking to break into the mobile market itself. It was at that time that speculation arose that Microsoft’s intentions for Nokia may go significantly deeper than just an OS agreement, perhaps to acquiring the Finnish company’s entire mobile division and reaping the benefits of Nokia’s global market saturation.

Fast forward to the present, with Nokia on the verge of introducing its Lumia series of smartphones to the North American mobile market, likely unable to weather yet another humiliating flagship phone flop, and we hear news that the first taste consumers will have will be with an unlocked Lumia phone priced at a whopping $899.

While the phone will be sold in a bundle—packaged with a Nokia Play 360 Wireless Speaker, Purity HD Stereo Headset—and will come without the normally requisite binding carrier contract, hence the reason for the exorbitantly high price, I can’t help be question the strategy behind such abysmal marketing. While the option of not being beholden to a carrier is sure to tempt some, the reality is that the $899 price tag will scare off most, perhaps not only from the Lumia 800 but from Nokia phones altogether.

Admittedly there are other affordable Nokia options coming down the pipe, as AT&T is slated to release the Lumia 900 on a two-year contract for only $99 sometime later this year, but the fact is that consumer opinion may have already been tarnished by this marketing misstep.

Now don’t get me wrong, I’m not going as far as to say that Microsoft is involved in some sort of mobile espionage designed to have Nokia fail, but only that offering the first Nokia smartphone at such a high price seems to be too conspicuous a misstep to be done by accident, meaning that perhaps Microsoft does indeed have some ulterior motives.

{ 2 trackbacks }

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{ 1 comment }

frustrated consumer February 28, 2012 at 7:03 pm

I recently upgraded my android phone to a windows phone hoping that it will be better. First off the Mimi’s 710 is poorly made the back wont stay on completely and the screen keeps smudge marks on it easily. Once I got used to the windows. Software it was basic nothing impressive I wouldn’t recommend this phone because it just doesn’t do enough its a fail if this considered a comeback for both companies. If I were them I will be scared buyer beware.

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