Nokia hopes new model will signal end of decline

The Lumia 920 is the company’s most powerful phone to date, offering a 4.5-inch display, a wireless charging plate and an 8.7 megapixel camera

NOKIA UNVEILED its new weapons in the war of the smartphones in New York yesterday, as the company struggles to prove it still has a place in today’s mobile market.

The Nokia Lumia 920 is the company’s most powerful phone to date, offering a 4.5-inch display, a wireless charging plate and an 8.7 megapixel camera that uses floating lens technology to get better images, and running Microsoft’s latest phone software, Windows Phone 8.

The Lumia 820, meanwhile, ditches the floating lens and has an 8 megapixel camera with a 4.3- inch display. Both phones will go on sale later in the year.

Nokia’s new handsets may be the last chance for the phonemaker to prove itself in the US. While its Windows Phone 7 devices have been generally well received, the company is still struggling to make a definite impact on a smartphone market that has been a two-horse race between Apple and Google.

When Nokia announced in February 2011 that it was planning on ditching its Symbian system as its primary smartphone platform in favour of Windows Phone 7, no one was surprised that the Finnish phonemaker was hitching its wagon to what it hoped would be the new contender in the market.

The company was already in the grip of a shake-up. Stephen Elop, formerly of Microsoft, came in as chief executive, replacing Olli-Pekka Kallasvuo who announced his intention to step down in 2010.

One geographic area where Nokia has performed poorly in the past is the US; teaming up with Microsoft gave it instant visibility.

Formerly the king of smartphones, Nokia has fallen on hard times. It failed to keep up with the innovation coming from rivals Apple and Samsung, leaving it languishing in the popularity stakes when it came to attracting new customers. Slumping sales and shrinking margins have led to profit warnings, job cuts and junk status for the company’s credit rating, with the company losing 95 per cent of its value since 2007.

In recent years, the general feeling was that Nokia was a brand in decline, looking to emerging markets to push its cheaper phones.

And then came the Microsoft deal. The software giant was determined that its platform would become the third force in the mobile market, offering consumers an alternative to Apple and Google.

But it hasn’t been an easy road for Nokia. It has been hit with problem after problem. The Lumia launch in the US was hindered by the discovery of a software bug in the phones. The news that Windows Phone 7 handsets would not be able to run the next version of the software – Windows Phone 8 – came just before the launch of the Lumia 900.

But despite that, Nokia and Microsoft’s partnership hasn’t performed badly – although analysts are still cautious as Windows Phone has yet to stage a proper assault on its rivals’ market share.

According to researcher IDC, some 5.4 million units were sold in the second quarter, about 3.5 per cent of the market.

“Despite recent gains, Windows Phone is not yet performing to Ovum’s expectations. This is, at least, partially as a consequence of the strength of the opposition, but partly, we think, as a deliberate move by Microsoft and its hardware partners to avoid flooding the market too quickly with the platform before they are in a position to play up its synergies with other Microsoft products, especially Windows 8 for PCs and tablets, and its business applications,” said Ovum analyst Tony Cripps.

Apple, on the other hand, has seen its fortunes soar since the launch of the iPhone in 2007, following it up with the iPad in 2010.

The competition in the smartphone market is reaching a fever pitch. Samsung stole a march on Nokia when it announced its own Windows Phone 8 device at IFA last week, the Ativ S. The company has pledged to have it on sale within a matter of weeks.

Following hot on its heels is Apple,expected to announce the iPhone 5 at its event planned for September 12th.

Amazon, meanwhile, is planning on launching a new version of its Kindle Fire later today. – (Additional reporting – Bloomberg)