The recent news that Nokia missed analyst expectations of selling more than 10 million handsets in the holiday quarter has been somewhat of a disappointment, and I guess it is time for an autopsy.
The sales failed to meet the quarterly upward trajectory we have come to expect from Lumia sales over the last 6 quarters, and this is all the more galling due to Q4 2013 being the holiday season, when significantly more handsets are sold.
There is a number of reasons we can postulate why.
1) As Nokia themselves said, increased pressure at the low end from other OEMs like Sony, Motorola and Samsung.
2) An ageing low-end portfolio – The Nokia Lumia 525 was late and not significantly enough changed from the Nokia Lumia 520 to re-engage buyers looking for a new handset.
3) The lack of a mainstream high-end handset – I normally buy a new handset every year, but even I could not get myself to buy a 6 inch handset, no matter how good the specs. The Nokia Lumia 1020 was also not enough of an upgrade to engage 920 owners.
There is also the possibility that Nokia was not making a huge effort to move handsets as before, since after selling off the handset business any further expense was just lost profit on the sale.
Additional, less well defined issues are the impact of the sale of Nokia’s handset business to Microsoft had on the market, an issue which may be compounded when Microsoft drops the Nokia brand. This uncertainty may have reduced the willingness of retailers to accept large amounts of Nokia inventory.
While some have complained of the lack of a major OS upgrade I think Windows Phone at present is functional enough for most buyers, but of course Microsoft could stimulate sales with a killer feature, much like Siri did on the iPhone, but unfortunately Microsoft has not shown any great facility in that field yet.
Our recommendation going forward would therefore be for a more significant cosmetic upgrade to Nokia’s lowest end handsets, to move 720P screens further down the market to handsets like the Nokia Lumia 630, to release a mainstream 5 inch handset like the Nokia Icon to the whole market, not just USA, and for Microsoft to license the Nokia name and work on that killer software feature (which will NOT be a notification centre or File Manager, or even voice assistant, which every Android handset has already).
What do our readers think is the biggest reason for Nokia’s stumble in Q4, and what does the company or Microsoft need to do to correct it? Let us know below.