November 14th 2011, Nokia announced its new range of Windows Phone 7 Mango enabled cell phone - the Lumia 800 & 710 models in India.
With Nokia's marketshare in doldrums, this product launch is vital for Nokia's survival. Whole lot of loyal Nokia users, industry pundits and analysts were eagerly looking at this launch and Nokia managed to draw out a BIG yawn as a response to this launch.
From a product marketing perspective the actual launch was a nonevent. News media that covered the launch put the event into its back pages, Internet, Twitter, blogsphere and Facebook was not ignited with enthusiasm.
Unlike Apple's famous product launches, Nokia's flagship was launched by D. Shivakumar and Bhaskar Pramanik. If you do not know who they are then you are doing just fine. The entire launch event managed to draw a BIG collective yawn from Indian audience.
I am a loyal Nokia user for last 8 years and was eagerly looking forward for the new Nokia Smartphone to replace my aging E71. I had a my first glimpse of Lumia 800 at London and for me it was a disappointment. The launch event was pathetic, the branding is worse, and the worst was that the new phone has no great features/functions.
In short Nokia has failed in product launch.
Nokia now faces a very very steep uphill climb to regain its old glory and is wearing a shoes dipped in grease.
A Failed Product Launch
Why do I call this as a failed product launch?
Four reasons:
1. Product is launched by no-names (sorry Mr. D.Shivakumar and Mr. Bhaskar Pramanik, no one outside your organization will recognize you. You are no Steve Jobs - whom even people in Somalia will recognize.)
2. No media hype or extensive campaign for the product. Please learn from Shah Rukh Khan - who promoted Ra-One to a record success. Lumia is a make-or-break product for Nokia, and Nokia bungled on the product launch and branding. Lumia 800 and Lumia 710 do not have the same punch as HTC Titan. Nokia should have chosen a better brand name which stands out and which does not confuse customers
3. Product functional features and pricing was too banal. A me-too product for a very high price. Lumia 800 falls terribly short when compared to iPhone 4S. Lumia does not have Siri or Facetime like features. Worst of all, Lumia does not differentiate itself from HTC Titan phones.
4. Over priced. At Rs29000, Lumia is over priced and under powered, and has no real app market. Today's smart phones are all about apps and in that space Window's phones has the least number of apps. From the pricing perspective, Lumia is comparably priced when compared with iPhone, but then there are hundreds of Android phones out there that sell for 1/3rd the price of Lumia.
Good things about Mango
Windows Mango OS brings in a fresh air into mobile space. The new UI is bright, intuitive and interesting. The active tiles is an excellent feature which makes Windows phone differentiate from other smart phones. Office applications Exchange support, ability to view and edit MS Word, MS Excel and MS PowerPoint has been the main selling point of Windows phones.
Xbox live feature is also another feature that will appeal to users of Xbox.
Things that need improvements
Nokia needs to work on improving its Lumia phones by adding the following feature:
1. Laptop/Netbook Adapter: When Lumia is connected wirelessly to a laptop or netbook or chromebook, the laptop monitor/keyboard becomes the input & Output device for the phone. This will enable users to easily edit documents, view videos etc. Essentially this function will enable the cell phone to double as a VDI device.
2. HDMI output: Enable users to plug the cell phone to TV and share/view videos on a bigger screen. With a 8MP camera and HD video recording capability, cell phones becomes a primary camera. So having a HDMI output helps users view the video/photos on big screen.
3. Encryption & Security for data: Security has been a major selling point of Blackberry phones. Microsoft has all the basic security technologies to create a secure windows phone. All e-mail communications and data stored in the phone must be encrypted - preferably a 256 bit encryption - AES256 standard
4. Remote management facility. As cell phones become more complex and doubles as a VDI devices, users will need support to configure/mange their cell phones. Having a remote management facility will help users & corporate IT to manage their smart phones better.
5. Cloud Mobility. Today cell phones are designed to be connected to Internet. Users should have all their data mirrored in a cloud. Apple has the iCloud, Microsoft has skydrive, but to make Window's phones truly different, enable users to sync with any cloud.
6.Better Camera and screen resolution
Current phone needs a front facing camera for video calls and a true 1080p resolution screens. Cell phones have become a primary camera for many folks, and Nokia/Windows needs to be a leader in the pack. In Lumia 800, the camera is very good. The best I have seen on a cell phone till date. Nokia needs to add a front facing camera.
7. Multi-core CPU and expandable memory
While the 1.4 Ghz CPU is adequate for phone applications but as apps grow, there will be a need for more memory and more CPU power. So in the next generation of mobiles, having a multi-core CPU and expandable memory upto 128GB will be a key differentiator.
Can Microsoft Keep up the Pace with Android & Apple?
This is a Billion dollar question. Currently Microsoft has several other business interests that will have to be cannibalized in order to win in the mobile space. The MS Office software will have to migrate to the mobile world and will have to be fragmented as well. One version of office for mobile and a full version for PC. But this approach will eat into the MS office PC market share. Will Microsoft allow that?
As mobile software evolve, soon it will become imperative to create a common platform for mobile and PC software. In other words, the Windows Mobile OS will have to supplant the Windows PC OS products to become a preferred VDI client. Apple has given early indications of its intentions to merge iOS and OS-X, and Microsoft will have to follow suit in order to keep up. This possibility raises lots of thorny questions at Microsoft and how Microsoft resolves this needs to be seen.
As I can foresee things, Microsoft will have no choice but to create three distinct OS platforms:
1. Mobile OS - that powers all end user devices (PC, netbook, cell phones. Tablets etc)
2. Server OS - that powers the back end servers
3. Cloud OS - currently the Azure platform.
If Microsoft can integrate these three platforms for seamless user experience, then Microsoft will have a distinct advantage over Google and Apple.
Xbox live is another feature which Microsoft has and other's don't. Microsoft must develop the Window's Phone OS to make it a personal player and a console for the web based platform.
What will Nokia do?
Apple is able to sell ~20 million cell phones per quarter because it is the only company that makes iPhones. But in Nokia's case, there is competition from Samsung, HTC and others who also make Window's phones. In addition, Microsoft has a tight control over the hardware specifications on the handsets. This implies that Nokia will not have much control on the hardware and hence cannot play much in terms of pricing as a differentiation strategy.
If Windows phones become successful, then it will replicate the PC story in terms of falling prices and lower margins. This means strong supply chain and excellent supply chain management. Nokia has world class factories as a competitive advantage.
Nokia must develop a strong product differentiation in the Windows phone segment in order to be successful in the long run. And to differentiate, Nokia must bring in its OVI store and its OVI platform as a key differentiator and create value with its OVI offerings.
Another advantage Nokia has today is in its Industrial Design. Nokia has the skills to create beautiful designs for cell phones and that is a strong product differentiator. Lumia 800 is a classic design. If Nokia can create exciting designs and beat Apple in industrial design, then Nokia can regain its former glory.
Uphill climb ahead
Nokia needs to prove its relevance in cell phone market by selling 12 Million Lumia handsets before 2011 Christmas, and then manage to sell atleast 22+ million phones every quarter for 2012
To meet such high numbers Nokia will need:
1. Strong App market place, Beef up the OVI store operations
2. Strong product differentiation from other Windows phones
3. Strong Carrier support in Europe & US
4. Big push marketing in Asia.
Can Nokia deliver on all the four? We will have to wait and watch what Nokia does in next 6 months. If Nokia fails to sell more than 10 million Lumia phones by end of 2011, then that may signal the end of the road for Nokia.
Closing Thoughts
In today's brutally competitive market place, Nokia will have to make it big in smart phone market with its Windows phone, else Nokia will be relegated to a secondary player (like Sony Ericcsson, Motorola etc), and that would force a massive downsizing or sell the company off.
To succeed in mobile space, Nokia needs to create next week's opportunity with tomorrow's technology but Lumia phones are designed to solve last weeks problem with yesterday's technology.
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