There’s a term in the consumer electronics industry called the “Osborne effect“. Without getting into the whole story, once upon a time there was a company that launched a product. People loved said product. The company said the next version would be even better, so people decided to just wait. Sales dried up to such an extent that the company went out of business. When Stephen Elop, Nokia’s CEO, got up on a stage in London in February 2011 and said that Symbian was dead, so was MeeGo, and that the future was Windows Phone, people decided to delay their smartphone purchase and wait until Nokia launched a Windows Phone. That happened nine months later in November, at least if you lived in the UK.
In early 2012 there were rumors that said today’s Windows Phones wouldn’t get upgraded to the next version of the OS, Windows Phone 8. Nokia refused to comment on the rumors, Microsoft refused to comment on the rumors, and that made people a bit wary. Sure enough, in late June, Microsoft held a “Windows Phone Summit” where they confirmed what people have been speculating for months, that Windows Phone 8 will require new hardware.
When are Nokia’s first Windows Phone 8 devices going to hit the market? If you’re an optimist, then the answer is late September. Realistically speaking, we’re looking at mid to late October, if not November. That’s three months away. An anonymous Nokia employee working in Asia spoke to Seeking Alpha and described the company’s current sitatuion:
“Since current Nokia phones will only work on Windows 7, the OEMs have stopped supporting the phones. They are very close to stop manufacturing parts for the phones, with the anticipation that these phones will become entirely obsolete in three months. In the meantime, the new phones developed for Windows 8 are yet to start manufacturing. Without much funding budgeted for new product development, the whole company has been sitting somewhat idly waiting for business to start on with the release of Windows 8.”
Translation: Q3 2012 is going to be one of Nokia’s bloodiest quarters.
Update: There’s a report from DigiTimes that says Compal, the Chinese company that makes Nokia’s Lumia phones, saw revenues drop 39.5% in June. Why? They say what pretty much what the source above says, that since today’s Windows Phones can’t get Windows Phone 8, sales are expected to fall.
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