Will The Windows-Based Lumia Save Nokia?

By Aaron Levitt | October 14, 2012 AAA

Consumers are a fickle bunch - especially when it comes to personal technology devices. Everyone wants the newest gadget or gizmo and the firms that create the "latest and greatest" often find huge success. Today, Apple (Nasdaq:AAPL) is on top of the ladder, with its suite of i-devices. However, it wasn't long ago that companies such as Research In Motion (Nasdaq:RIMM) or Motorola ruled the roost. At one time, their various mobile phones and devices were the envy of the industry and "must-haves" for every consumer. Before those two claimed tech gold, however, another firm was the mobile phone king - Finnish firm Nokia (NYSE:NOK).

Nevertheless, ever since Apple unveiled its iPhone, Nokia has been on a one-way ticket to the bottom of the tech pile. After a series of poor mobile phone models and missteps, shares of the firm now trade for a fraction of their former highs. In spite of that, there are some glimmers of hope. Nokia is about to unveil its most high-tech device yet and some analysts predict that the Lumia could save the beleaguered phone maker.

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Cool High-Tech Features
For the beaten-down firm, the Lumia could be seen as a "make or break" device. The impressive new Lumia 920 - which will be the first smartphone to run on Microsoft's (Nasdaq:MSFT) new cross-platform operating system, Windows Phone 8 - boasts some serious hardware specs. Nokia has outfitted the device with a high-definition 4.5-inch touchscreen as well as a 1.5 GHz dual-core Snapdragon processor and its advanced PureView camera. But will consumers flock to the product?

There is some evidence that they will. Released in the fall of 2011, the Lumia 800 and 710 have received plenty of positive reviews from both consumers and tech pundits. During the second quarter, Nokia shipped 4 million Lumia phones, roughly double the number it sold the quarter before. At the same time, popular tech website CNET praised the phone's "innovative design" and "gorgeous screens." Nokia has also kept many of the positives of the predecessor devices, while adding some additional features to the new Lumia that will boost its "cool" factor.

First, the phone uses a revolutionary wireless charger system. Essentially, users can just place the phone down on it and it will charge the device without plugging it in. Secondly, the 4.5-inch touchscreen will even work when you're wearing gloves and will automatically adjust color and brightness, depending on lighting conditions. Then there are the Lumia's "hip" proprietary location-based apps that run on Nokia's Navteq maps platform. Nokia hopes that these features will drive sales to its new device.

A Big Bet on Windows 8
However, Nokia's biggest issue could be its partnership with Mr. Softy. That exclusivity could be a big problem if Windows 8 turns out to be a big goose egg. Nonetheless, success could be an issue as well. Currently, Nokia maintains an exclusive relationship with Microsoft. However, other device makers - such as Samsung (OTC:SSNLF) and HTC - are expected to launch their own Windows 8 phones and tablets in the upcoming months. If the OS turns out to be a hit, more device makers could jump on the platform and potentially crowd out Nokia's devices.

Then there is the Lumia's cost. While costs for the phone in the U.S. haven't been announced yet, unlocked versions of the phone in Europe are currently set to sell at around US$770 ( or 599 euros). This makes the Lumia one of the most expensive devices on the market. At that price, Nokia may very well drive consumers into a cheaper, but almost as advanced, device.

The Bottom Line
So, will the new Nokia Lumia save the former mobility tech king? Really, it's too early to tell. However, based on the specs, the smartphone is a jewel in the sector. The question remains whether consumers will want to pay a real premium for an untested OS. In the meantime, Nokia can continue to rake in dough from its healthy patent portfolio, while it tries to regain its cell-phone mojo.

At the time of writing, Aaron Levitt did not own any shares in any company mentioned in this article.

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