(By Mani) Its raining smartphones this week as Nokia Corp
) introduced two new Windows Phone 8 (WP8) devices, the Lumia 920 and Lumia 820 – probably its final shot to regain its market share in the smartphone space from the clutches of Apple, Inc. (NASDAQ:AAPL
) and Samsung.
The success of the Windows 8 phones is also crucial for Microsoft Corp. (NASDAQ:MSFT) which is aiming for a substantial share in the market.
Both phones have 4"plus touchscreens, high-end cameras, wireless charging capabilities and are powered by Qualcomm's 1.5GHz dual-core S4-Snapdragon chip. The 920 has an 8.7MP camera and 32GB of storage, while the lower-tier 820 has 8MP and 8GB memory.
The specifications are competitive, with Nokia's focus on the camera/imaging technology a highlight to market itself ahead of the holiday shopping sales. The new phones will ship in select markets later this year, but pricing and specifics on timing, country reach, carrier partners and the breadth of the roll-out weren't shared.
However, hardware hasn't been Nokia's issue; generating interest in Windows has. Since, customers who are accustomed to the ecosystems of Apple's iOS and Google, Inc.'s (NASDAQ:GOOG) Android would be reluctant to invest on a new operating system.
On that front, it would be a challenge to gain much near-term traction against the likely iPhone 5 launch and Android upgrades. The lack of carrier relationship and pricing details has disappointed the analyst community, who echoed that the portfolio also needs to fill out in the midtier.
"While the hardware looks good, the lack of detail on launch specifics and expectations for the ramp is disappointing," Oppenheimer analyst Ittai Kidron wrote in a note to clients.
Nokia's new phones will face tough competition in the form of upcoming iPhone 5 and Android upgrades as challengers. Motorola, since its $12.5 billion acquisition by Google, Inc.(NASDAQ:GOOG), has launched Droid Razr HD, the Droid Razr Maxx HD and the Droid Razr M. All the three phones would be carried by Verizon (NYSE:VZ).
Nokia will partner with carriers that'll co-invest in marketing and prominently position the new Lumia phones with its retail sales force to counter competition, but this could be a narrow base initially.
"Even with good hardware and partners, Nokia has to execute at a high level to see much incremental WP8 traction. We're cautious given a still challenging macro environment and potential production capacity constraints for WP8, which could cap the near-term ramp," Kidron said.
However, one of the positive features of the new Lumia phones is its wireless charging capability. Although, few expect the Lumia to ship nearly the volume of Apple's iPhone or Samsung's Galaxy S3 and fewer apps in Windows phones (about 100K), compared with about 500,000 or more for Android or iPhones, may deter consumers from WP8 devices.
If the Windows 8 phone fails to gain traction, it could deal a severe blow to the cash-trapped Nokia and Microsoft's ambitions to create a formidable number three operating system next to iOS and Android.
"Should WP8 disappoint, we believe Nokia has more cost-cutting options," Kidron added.