SAN FRANCISCO—Nokia Corp. is set to regain some of its lost smartphone market share thanks to the introduction of its Lumia 900 last week—and, in the process, re-establish Microsoft Corp.'s Windows Phone as a leading contender in the cellphone operating system business, according to market research firm IHS iSuppli.
Thanks to Nokia, Windows Phone is set to regain the No. 2 ranking among smartphone operating systems in 2015, surpassing Apple Inc.'s iOS, according to IHS. The firm projects that Windows Phone will account for 16.7 percent of the smartphones shipped in 2015, up from less than 2 percent in 2011.
Windows Phone lost the second place ranking in 2009 due to rising competition from Android and iOS, according to IHS.
“One of the hottest new products unveiled at the Consumer Electronics Show was the Lumia 900, a Windows Phone-based smartphone sporting a flashy set of features that makes it competitive with the best alternatives offered by the Android camp,” said Wayne Lam, senior analyst for wireless communications at IHS, in a statement. Lam said the product represents Nokia’s first step to reclaim its lost market share.
Nokia, once the perennial leader in smartphone sales, fell into third place behind Samsung Electronics Co. Ltd and Apple by the second quarter of 2011, according to IHS.
According to IHS, the Lumia 900’s feature set, along with Nokia’s strategy for selling the product, shows that the company is targeting the North American region. Even at the height of Nokia's dominance, North America has historically been Nokia's Achilles heel, according to IHS.
"The introduction of the Lumia 900 shows that Nokia believes the road back to smartphone dominance runs through North America," said Francis Sideco, senior principal analyst for consumer and communications at IHS. "And the way to win North America is through its operator channels."
IHS said the Lumia 900 was developed with North American market dynamics and smartphone users in mind. The product was first launched in the U.S., a departure from Nokia’s historical approach of repurposing devices designed in and for other parts of the world, IHS said. The firm cited Lumia 900's large 4.3-inch organic light-emitting diode touch screen display, 12-megapixel camera as well as partnerships with Rogers, Telus, AT&T and T-Mobile are concrete examples of Nokia executing on this strategy.
Another feature of the Lumia 900 also illustrates how serious Nokia is about addressing the North American market: its support of the high-speed Long Term Evolution (LTE) 4G standard, according to IHS.
“In the past, Nokia always introduced new technologies in its home European market first,” Sideco said. “However, for the Lumia 900—Nokia’s first LTE phone—the company initially is rolling it out in North America. This demonstrates Nokia’s commitment to re-enter the region.”
Furthermore, Nokia is targeting the mobile network operator (MNO) channel to sell its phones in North America, IHS said. Nokia previously eschewed the MNO approach, limiting its penetration into the region, according to IHS.
IHS said Nokia is also looking to take a bit out of Research In Motion Ltd.'s Blackberry dominance in the enterprise sector, leveraging Microsoft’s business/enterprise sales channels to appeal to corporate customers in North America.
Although Nokia is not the only seller of Windows Phone smartphones, the company is expected to dominate the market, accounting for 50 percent of all Microsoft OS-based handsets sold in 2012, IHS iSuppli predicts. The company’s share then is set to rise to 62 percent in 2013, according to the firm. Nokia’s portion of the market will begin to decline in 2014, as other companies increase their sales of Windows Phone products, IHS said.
"Because of Nokia’s support, apps developers will eagerly shore up the Windows platform," Lam said. "This will cause other makers of Windows Phone devices, such as Samsung and HTC, to offer more products supporting the OS—further expanding the market."
Nokia Lumia smartphone is being aggressively marketed in India where there is a large user base of Nokia Phones and Nokia enjoys the reputation of giving reliable phones.
Looks like with Lumia introduction Nokia is back in reckoning in the smartphones market.
I remember reading similar predictions last year. I believe they predicted 5% of market share in 2011. Clearly that didn't happen, and I find it very hard to believe that they're going to jump to 9% in 2012. No matter how good WP7 is, we're talking about a 450% increase in market share. Nokia isn't doing anything special enough to make this realistic.
Someone who have previously owned windows os phone will never try windows again as it had disappointed the customers a lot in-term of its updates, still if windows mobile os is not backward compatible customers will be totally dissatisfied. Also windows mobile os will have to follow the huge app market which is already grown at lot in case of other OS's.
Nokia may not be that unlikely to rise in the smartphone market, IF it can deliver an attractive phone. At least in Europe, Nokia has a very strong reputation when it comes to selling reliable phones that keep on working many years without a glitch.
I'd have to disagree, Dylan. I would actually prefer a windows phone. I have tested the HTC Radar 4G (also Windows) and I loved it. It was a surprisingly pleasant experience. I found it to be much sleeker and more sophisticated to any Android phone I've used to date. Having said that, Nokia has a branding issue in the US and will need to work mighty hard to win people over.