Nokia has announced the first CDMA Windows Phone designed specifically for the Chinese market, the Nokia Lumia 800c. Our Wireless Smartphone Strategies colleagues believe that it remains to be seen how the device will help Nokia regain the ground it is losing in the Chinese smartphone market.
However, having recently included the Lumia 800 in a user experience benchmark with Chinese smartphone buyers, we observe that Nokia has unveiled a product that is well placed to meet the needs of the target audience in this market.
In our research, the Lumia 800 received positive feedback for its high-end industrial design and the uniqueness of the Windows Phone interface. At the same time, we identified a number of areas where all of the major smartphone platforms – including Windows Phone – failed to meet the specific needs of Chinese consumers. These include:
- Lack of integration of Chinese internet services. In our research, Chinese users were clear that deep integration of Facebook, Twitter etc. was of little relevance to them. They wanted the same level of integration of Chinese internet services from RenRen, Sina Weibo, QQ and Baidu.
- Some China-specific use cases not supported. Our research identified opportunities for apps that meet the specific needs and behaviors of Chinese consumers (such like group messaging, data management, phone number location, etc.) which are not currently supported by default by the main smartphone platforms.
- Insufficient offline implementations of experiences. Chinese users prioritize applications and features that work entirely in offline mode. Functions such as maps that can only operate in connected mode are likely to be considered as too costly. In our latest research, Chinese smartphone owners reported that only 29% of music listened to on their device was streamed, compared to 42% of US smartphone owners.
Based on the available information, the Lumia 800c appears to address these challenges, to at least some extent:
- The device will be optimized for local internet brands. Nokia has announced that the Chinese version of the Lumia 800 will support all of the major Chinese internet services. Of course, 'support' does not necessarily imply deep integration throughout the OS (as desired by our research participants), but the launch announcement touts a "compelling, locally relevant experience ... especially tailored for people in China".
- Bundling free music, games and Nokia Maps will be appealing to price sensitive Chinese consumers. However, the extent to which services will be able to be used entirely offline (to avoid expensive data charges) will be critical to adoption.
- The launch of “BeTop”, an incentive program to encourage local developers to produce apps for the platform is a smart move. To maximize the value of this investment, we believe that Nokia should prioritize the creation of apps that meet the specific needs and behaviors of Chinese consumers that we identified, and promote the best apps that plug these gaps to the user base.
We also note that, as a brand, Nokia remains stronger in China than in most regions. Our latest brand loyalty research found that 66% of Chinese Nokia owners plan to remain loyal to the brand when they purchase their next device, compared to 50% of UK Nokia owners.
As identified by our colleagues, price will be a key factor in determining the success of the Lumia 800c - especially as the product will be targeted towards younger Chinese users, who are particularly price sensitive. However, if Nokia and China Telecom can offer a very competitive subsidized price, as the vendor achieved with the launch of its Lumia 900 device in the US earlier this week, this will make the product a very appealing offering.
Strategy Analytics’ user research in China is available to Wireless Device Lab clients or for purchase here. Strategy Analytics’ China Handset Market Share report for Wireless Smartphone Strategies clients can be found here.