When we look back at CES 2012, we will be able to see if this was the critical moment where Nokia and Microsoft started to gain some traction in the U.S. smartphone market with the introduction of the Lumia 900. We sat down with Nokia Senior VP Kevin Shields and Microsoft’s Windows Phone head honcho Joe Belfiore to discuss how Windows Phone can resonate with consumers, why the companies aren’t in a rush to get a quad-core phone out there and the “distinct” relationship between the two companies.
It’s not going to be easy for Microsoft and Nokia to make a significant dent in the U.S. mobile market, as this is the home turf of both Google and Apple. We all know that the iPhone appeals to many mainstream consumers and Google’s Android is claiming an impressive number of new smartphone purchases. Despite Windows Phone Mango being pretty darn good, all research puts Microsoft’s mobile platform in single digits and Nokia’s smartphone share is probably even lower.
While Shields and Nokia recognize the up-hill climb, the company believes that even a mature market like the United States is ripe with opportunity if it delivers high-quality devices and properly markets it.
“I guess the good news for us is that the U.S. market is entirely green field,” Shields said. “It’s quite well-developed and the awareness of the benefits and values of smartphones is really high.”
Shields also admits that to succeed in this market, companies have to have strong relationships with the carriers and it’s clear that both Windows Phone and Nokia have the backing of AT&T. Not only did AT&T CEO Ralph de la Vega show up at Nokia’s AT&T’s press conference, he also espoused effusive praise on Nokia CEO Stephen Elop during the AT&T Developer Summit.
Still, the reality is that neither Nokia or Microsoft seems to have a great relationship with Verizon Wireless, the largest U.S. carrier by subscriber count and an ally that mobile companies want to have. Belfiore said he believed that Verizon “made” Android in the United States with its Droid lineup and aggressive promotions.
Nokia also admits that it didn’t invest as much in CDMA technology in the past (for understandable reasons) but it sees 4G LTE as an important factor for future development. With 4G LTE rapidly becoming a global standard, Nokia could eventually produce a single phone and roll it out to multiple carriers around the world (including Verizon) with minimal tweaking.
The Lumia 900 will support AT&T’s 4G LTE network and while we’ve found the speeds to legitimately be blazing fast, you always have to wonder about battery life on devices with the first generation of new technology. Nokia said that it put in an extra-large battery in the Lumia 900 to address this but that Microsoft and Nokia have also put in a lot of thought to optimize the platform for every component inside the smartphones.
While nearly every high-end Android phone has a dual-core processor and 720p HD screen, Belfiore and Shields said that when you cannot deliver a “buttery smooth” experience, the only way to really differentiate is with speeds and feeds. Belfiore said this PC-model of always touting the latest specs misses what’s important about the mobile experience.
“We spend our time and energy investing more in our current set of components,” Belfiore said. “We won’t be the first and fastest to market [with bleeding edge specs] but when we do, you can be sure it will be optimized a ton.
Basically, Microsoft and Windows Phone is more concerned that when you touch an app, it responds smoothly and quickly instead of how many cores your smartphone has. This doesn’t mean consumers will have to sacrifice on hardware with Windows Phone, Belfiore pointed out, and things like dual-core processor will definitely be on the table in its hardware specifications once the software has been properly optimized.
While there is a lot of logic behind this and I can’t say I’ve ever experience a laggy Windows Phone, there are some legitimate concerns about the hardware in these devices because of the two-year contracts that most Americans sign. The reality is that a 1.4 GHz Snapdragon-powered phone likely won’t feel sluggish in 18 months but I don’t know how Microsoft evolves the platform in the future to compete against Android and iOS without raising the baseline of its hardware specs.
For example, gamers probably love Windows Phone for its Xbox Live integration but something like the jaw-dropping graphics of ShadowGun on a Tegra 3 chip may not be possible on Windows Phone for a while. On the PC side of things, Windows 8 can run on the same hardware as Windows 7, so maybe it can really squeeze out a lot more power out of existing devices.
Along with carrier support, good devices and the already-excellent software, Microsoft and Nokia will need to make a major push with marketing and advertising in order to be successful. We’ve heard reports that the companies will pump $100 or $200 million in just pushing the Lumia 900 in the United States and Shields and Belfiore didn’t confirm any numbers but did say there will be a significant marketing push. Microsoft is also kind of shifting its Windows Phone advertising strategy, as it felt last year was the time for it to really push to introduce it to the public but it will now rely a bit more on partners advertising it. We’ve already seen this in action, as Samsung, HTC and soon, Nokia will have their own ads on American airwaves.
While Microsoft has Windows Phone relationships with Samsung, HTC and others, Belfiore reiterated that the relationship with Nokia is “unique.” Nokia had previously told us that it is itching to get its contributions into the core Windows Phone platform for future products but Shields and Belfiore were tight-lipped about when we may see that.
“It’s happening and it’s going well,” Belfiore said about the Windows Phone software collaboration between the companies.
Do you think Nokia and Microsoft will do well in the United States? Let us know in the comments.