**Editor’s note: Please click here for our list of September’s hottest selling smartphones to see how Nokia stacked up against the competition.**
Nokia, once the most-heralded smartphone maker in the world, bar none, “is on the brink of collapsing, following years of bad decision making and mismanagement.”
Those harsh words come from Boris Metodiev, a senior analyst with Yankee Group, who on Thursday noted that “The demise of Nokia has been spectacular … The company has always been good at building a decent phone, but never really cared about the OS supporting it.”
Metodiev, commenting on a ZDNET report citing Nokia’s financial struggles, says Nokia didn’t give its Symbian operating system the attention it needed after Apple unveiled the iPhone and Google introduced Android. Forging a relationship with Microsoft and committing to Windows Phone seemed like the right decision at first, the analyst said, but “then came the announcement that no Windows Phone 7 devices would be able to update to Windows Phone 8. That practically killed the [prospective] sales of Lumia 900, which was supposed to be Nokias flagship phone.”
The Finland-based handset manufacturer this week reported its sixth consecutive loss since teaming up with Microsoft. Nokia’s losses last quarter rose to $1.27 billion, nearly 50 percent higher than what analysts were predicting, and almost 20 times more than what they were in the year-ago quarter. The company isn’t optimistic for the near future, predicting the fourth quarter to be “challenging” and a “transition.” That transition is the unveiling of devices based on Windows 8, the latest version of Microsoft’s mobile operating system.
And while Internet speculation certainly isn’t gospel, here’s an ominous prediction: Verizon Wireless might never carry Windows 8 phones. That’s because Verizon is sharing geolocation data with advertisers and Microsoft isn’t a fan of that process. The Redmond, Wash.-based software giant isn’t letting Verizon put spyware on Windows 8 devices; however, the two sides are discussing options, Daily Mobile reported.
Numerous websites reported this week that the Nokia Lumia 920, the flagship of the new line, aimed at both the business user and the general consumer, is slated to be an AT&T exclusive, but only for six months. That gives Microsoft and Verizon some time to work out their differences. No matter how that turns out, Metodiev isn’t keen on Nokia’s future.
“Now Nokia is hoping to bank on its new flagship phone Lumia 920 and the success of Windows Phone 8,” the analyst said. “Even if that is a match made in heaven, its unlikely to generate huge amount of revenue right away. There will be a stiff competition from the undisputed market leaders iPhone 5 and Samsung Galaxy SIII, and also from other Windows Phone 8-based devices from manufacturers like Samsung, Huawei, HTC and ZTE.”
Canaccord Genuity technology analyst Michael Walkley isn’t quite as pessimistic, but is far from confident about Nokia’s next few months.
We believe Nokias visibility remains limited for its business units and modeling 2013 is challenging due to the uncertainty of how long Nokia can maintain a profitable Mobile Phones business unit given increased low-end smartphone competition, the uncertainty of whether Windows can become a viable third ecosystem with the Windows 8 launch and whether Nokia can turn Smart Devices into a profitable business segment, and the uncertainty of how sustainable the improved margin trends are for [Nokia Siemens Networks] in 2013,” Walkley said.
The company itself is more bullish on its long-term future, believing that its partnership with Microsoft will eventually pay off. Reviews of Windows 8 have generally been positive, and the price of Lumia devices is right most carriers sold the last round for $99 or less on contract, about half or one-third of what it would set you back for a comparable Android or Apple smartphone.
Nokia debuted its Windows 7 Lumia line early this year to limited success. The flagship Lumia 900, for instance, got off to a decent start in an exclusive with AT&T, but sales quickly faded once it got buried in a bevy of Android-phone launches.