The beginning of the end of Nokia’s transition period

nokia-lumia-1020

“The back is the new front,” Stephen Elop exclaimed while announcing the Lumia 1020 at a launch event in NYC. The statement not only points to the exaggerated camera lens assembly required for the smartphone’s massive 41-megapixel sensor but also takes me back, in some ways, to Nokia’s shift to Windows Phone away from Symbian. Even after signing Symbian’s death penalty, Nokia launched the PureView 808 running on Symbian, acknowledging the fact that Windows Phone wasn’t ready for primetime. Two years later, Nokia has finally turned an entire circle.

The Lumia 1020 marks the beginning of the end of Nokia’s transition period. After almost two years of launching the Lumia range of smartphones, Nokia finally has something that would make buyers notice its product while they are deciding whether they should go for the latest iPhone or Galaxy smartphone. Despite the weakness of Windows Phone as a platform when compared to iOS and Android, over the past two years Nokia has managed to come up with a decent package of hardware, software and services to make up for the missing bits.

If the Lumia 1020′s camera does perform as claimed (it did during my brief experience with the smartphone), it would be a pretty compelling offering. Think about it, the Lumia 1020 would have the best camera performance combined with a music store that offers unlimited tracks to download for free and it also has one of the best offline navigation software on any smartphone. While Nokia’s Lumia smartphones were already doing well in the entry and mid-level segments, the Lumia 1020 could be the key to success in the high-end segment, which was missing so far.

Having said that, it is too early to root for Nokia’s future success. The company still has a few obstacles to overcome. The first and foremost being its partnership with Microsoft and Windows Phone as a platform. Nokia has consistently got the hardware right but has always been let down by Windows Phone, which lacks apps and is not as polished or evolved as Android and iOS. Major app developers prefer to make apps for Android and iOS, while developing them for Windows Phone seems like an afterthought and often after being paid to developed for the platform. Heavy smartphone users prefer using the other two platforms as Microsoft has failed repeatedly to catch up with them in a quest to be perceived as being different. The lack of a proper centralized notification system, for instance, is hard to explain.

Secondly, Nokia is still struggling to roll out its smartphones at a faster pace. With limited marketing budgets and production capacity, it has to stagger its launches that take a couple of quarters to reach major markets while Samsung rolled its Galaxy S4 smartphone in over 110 countries in a fortnight. Even if Nokia has a great product like the Lumia 1020, people would consider to buy it only if it is available in their country. Think about it, the Lumia 925 is not available in most markets yet and Nokia had to announce the Lumia 1020. Even hardcore Nokia fans would now be compelled to not buy the Lumia 925 and instead wait for the Lumia 1020. And who knows, by the time the Lumia 1020 is available across markets, Nokia might have something else to offer. During my interactions with senior Nokia executives it became clear that they are aware of the situation but it remains a challenge and they are making the best of what they have.

Despite these challenges, it is refreshing to see how Nokia continues to innovate with the resources it has and is playing to its strengths. Rather than buying off the shelf image sensors for the 41-megapixel PureView camera, Nokia has designed the entire assembly including the optical image stabilization bit internally, which means its rivals won’t be able to easily replicate the main USP of the Lumia 1020. Having its own music store, navigation software and acquiring Scalado, which makes the UI for most smart camera apps that you currently see on rival smartphones, will buy Nokia some time. But what Nokia needs the most at this time is a major hit at the top-end segment and it is hoping the Lumia 1020 will be that smartphone.

Disclosure: Nokia sponsored the author’s travel and stay to attend the Lumia 1020 launch.

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