Yesterday’s Nokia announcement at CES of an AT&T-bound Lumia 900 Windows Phone with LTE represents a significant win for the device vendor, whose marketshare in the smartphone-hungry North American market, as illustrated here, has been on a steady decline for at least the past 4 years.
Together with the earlier-announced T-Mobile version of the Lumia 710, Nokia will now have at least two smartphones selling in the US that are not based on Symbian, a platform that had only niche appeal to US consumers and operators.
According to the Strategy Analytics Handset Country Share Tracker (HCST) service, T-Mobile was Nokia’s most important operator client for smartphones in the US in 2011, as the vendor’s business-centric Eseries devices are long gone from AT&T’s portfolio. So what is likely to happen with the arrival of the two new Lumia models?
- Time-to-market will be a critical factor for the Lumia 900. Rival HTC has also just announced its first LTE Windows Phone, the Titan II, which could steal some of Nokia’s thunder with an early arrival. Highlighting unique-to-Nokia capabilities like Drive navigation will be critical in attracting Windows Phone buyers.
- The Lumia 900 alone will not instantly catapult Nokia into first, second, or even third place at the operator, and the vendor will be faced from heavy competition from Samsung and HTC, both of whom will be fighting for the #2 spot behind Apple.
- RIM, with its below-average superphone portfolio, could be hurt the most here. If, indeed, there is only room for 3 competing platforms, then AT&T’s OS-diverse portfolio could squeeze the BlackBerry maker’s volumes in 2012.
- Following the recent arrival of the Sprint iPhone, T-Mobile has become the only major US operator without a strong third platform.
- The low-priced (US$50 with contract) Lumia 710 will have a lot of appeal to cost-sensitive feature phone upgraders.
- Nokia will not compete with pricy HSPA+ 4G superphones, but rather will take volume from more low-end devices from Samsung and LG, as well as T-Mobile’s own myTouch brand, as consumers look for a simpler alternative to Android.
Ultimately, the success of these two handsets depends largely on the level of promotional support given to them by the operators, especially in retail stores where a lot consumers make their decisions based on sales rep recommendations. Nokia has been working closely with both carriers on this dimension, winning critical drive slots and retail display real estate.
Finally, it is worth to note the significance of both the AT&T and the T-Mobile phone carrying the Lumia sub-brand, rather than their own re-branding. Globally recognizable, memorable sub-brands have been key parts of the strategy for the world’s leading smartphone vendors (e.g., Apple’s iPhone and Samsung’s Galaxy). In the operator-dominated US market shared brands are still a rarity, and we see this as a positive sign for Nokia’s long-term recovery.
Wireless Smartphone Strategies