Microsoft, Nokia launch new powerful smartphones as mobile war escalates

HELSINKI/NEW YORK: Nokia and Microsoft Corp
will take the wraps off the struggling European company's most powerful
smartphone on Wednesday, in what may be their last major shot at
winning back a market lost to Apple, Samsung and Google.
The
world's largest software maker and the Finnish company that once
dominated the cellphone market will showcase the device in New York on
Wednesday morning and demo it for industry insiders about the same time
in Helsinki.
Microsoft and Nokia hope the new Lumia will become a potent weapon in an escalating global mobile industry war.
Google's Motorola Mobility intends to show off its latest smartphone on Wednesday, Amazon.com Inc
will unwrap new Kindle Fire tablets the day after, and Apple is
expected to unveil the latest version of its seminal iPhone on Sept.
12. Samsung Electronics says it will sell its own Windows phone as early as next month.

[You must be registered and logged in to see this image.] Models of the Nokia Lumia 900 cellular telephone are pictured in San Francisco, California. REUTERS/Robert Galbraith The
Lumia 920 and smaller Lumia 820 will run on the latest Windows Phone
operating software, which Microsoft hopes will rival Apple's iOS and
Google's Android to become a third mobile platform. If the new phones
do not appeal to consumers, it could spell the end for loss-making
Nokia and deal a serious blow to Microsoft's attempts to regain its
footing in the market.
Leaked pictures of the two models show a
similar look to Nokia's previous Windows phones, but analysts say these
alone will not be enough to turn the corner.
"There have to be
more devices, and their features have to stand out more. There has to
be a 'wow' device," said Hannu Rauhala, analyst at Pohjola Bank, who cut his recommendation on Nokia's shares to "reduce" on Tuesday.
The stakes are high for both Nokia and Microsoft.
The
Finnish handset maker has logged more than 3 billion euros ($3.8
billion) in operating losses in the past 18 months, forcing it to cut
10,000 jobs and pursue asset sales.
Its share of the global
smartphone market has plunged to less than 10 percent from 50 percent
during its heyday, before the iPhone was launched in 2007.
Windows
phones have only captured 3.7 percent of the global smartphone market,
according to Strategy Analytics. Android phones have 68 percent, while
Apple has 17 percent.
For Microsoft, successful Lumia sales
could convince more handset makers and carriers to support its Windows
Phone 8 software, which promises faster performance and a customizable
start screen.
Last week Samsung became the first to announce a
smartphone running Windows Phone 8, at the IFA trade show in Berlin.
But it was not able to provide the model to visitors at the show.
ECOSYSTEM WARRIORS
Apple's
first iPhone revolutionized the mobile industry, popularizing the model
of a third-party developer "ecosystem," today considered pivotal to the
success of any operating system.
Part of the reason for the
limited success of Windows phones is that they support only 100,000 or
so apps, compared with about 500,000 or more for Android or iPhones.
There
is also the interconnection between apps and content, typified by
Apple's iTunes and iCloud, which share content across devices, that
acts as a powerful disincentive to switch between vendors.
"Much
has been made of Windows Phone emerging as 'the third ecosystem' in
mobile. This is a huge task in itself, but Apple's and Google's
entrenched positions where consumers have already invested heavily in
apps and content makes switching platforms less attractive," said Ben
Wood from mobile sector research firm CCS Insight.
The new phone
software is similar to the Windows 8 desktop and tablet software to be
released on Oct. 26, making it easier for developers to write apps for
both, and Microsoft hopes this will boost the platform's popularity.
But
the Windows operating system is by no means universally popular in the
PC market, so consumers will not necessarily come to the mobile phone
equivalent with unalloyed goodwill.
"Consumer perceptions of the
Windows brand have been shaped by PC usage. Although Windows 8 will
help, there is still plenty of work required to overcome historical
prejudices in the transition to mobile," said Wood.
The new Lumias could, however, benefit from the continuing decline in Research In Motion Ltd's BlackBerry, and also from a recent legal blow to the Android operating system.
A
California jury decided last month that some of Samsung's hot-selling
Android smartphones copied features of the iPhone, which may result in
import bans and drive handset makers to put more resources into making
Windows-based phones.
But for Nokia and Microsoft to exploit
that window of opportunity, it must first find favour with consumers,
who so far have shown little enthusiasm for smartphones with Windows
software. - Reuters