Thursday, September 06 07:28:34
Nokia shares plummeted 13 percent after its new Lumia smartphones failed to impress investors looking for transformational handsets to rescue the struggling Finnish company. Nokia and its partner Microsoft Corp showcased the Lumia 920 phone on Wednesday in what may be their last major shot at reclaiming market share lost to Apple Inc, Samsung Electronics Co Ltd and Google Inc. Microsoft and Nokia hope the device - sporting bright colors, a bigger screen and technology that reduces blur and shakiness in pictures and video - will become a potent weapon in an escalating global war to dominate the mobile industry. But investors said it lacked "wow" and gave it a quick thumbs-down. Some analysts said Nokia's reticence about dates, prices or carrier partners also did not help.
Nokia shares traded in Helsinki began sliding midway through the New York launch and ended down 13 percent at 1.99 euros, their biggest single-day loss since June. Nokia's U.S.-listed stock closed down nearly 16 percent at $2.38. The stock had gained 67 percent since mid-July as anticipation built ahead of the Lumia's unveiling. The Lumia was the first in a flurry of planned mobile-device launches expected ahead of the holiday shopping season. Google's Motorola Mobility showed off three new smartphones based on Android software later on Wednesday. Verizon Wireless the top U.S. mobile provider committed to sell all three of the Motorola phones.
Amazon.com Inc will unwrap its new Kindle Fire tablets today and Apple is expected to unveil the latest version of its seminal iPhone on Sept. 12. "The challenge is that the world is working on the 4th, 5th and 6th editions of their devices, while Nokia is still trying to move from chapter 1. It still has quite a bit to catch up," said RBC analyst Mark Sue. "People were looking for something that would dazzle. Most investors will view it as evolutionary, not revolutionary. Nokia has made some good progress, but investors were looking for quantum leaps. We didn't get that." Many of the industry analysts who saw the phone up close in New York deemed it a solid device with a few differentiating features.
But it did not push the envelope as Nokia CEO Stephen Elop had promised. The device runs on the latest Windows Phone operating system, which Microsoft - the world's largest software maker - hopes will rival Apple's iOS and Google's Android to become a third mobile platform. Nokia announced no partnerships with wireless service providers, leading some analysts to worry this was a sign of weak carrier support. The Finnish handset maker said it would announce pricing and roll-out dates for the new Lumia later on a country-by-country basis. "It is impossible to assess this launch without price and roll-out info. This is disappointing," said Bengt Nordstrom, CEO of telecommunications consultancy Northstream. For Microsoft, successful Lumia sales could convince more handset makers and carriers to support Windows Phone 8, which promises faster performance and a customizable start screen. Samsung last week became the first to announce a smartphone running that software, which it said it would begin selling as early as next month.
If the new phones do not appeal to consumers, it could spell the end for money-losing Nokia and deal a serious blow to Microsoft in its attempts to regain its footing in the market. "We're working with our carrier partners to finalize our plans," said Jo Harlow, executive vice president of smart devices for Nokia. Windows phones have captured only 3.7 percent of the global smartphone market, according to Strategy Analytics. Asked about estimates that Windows phones might account for 10 percent of the market by the end of 2013, Harlow said: "With momentum, if we're at 10 percent at the end of 2013, I'd be a happy girl." ( C) Reuters