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Microsoft watchers keep eye on Nokia as it gets set to roll out Windows phones [The Seattle Times]
[October 25, 2011]

Microsoft watchers keep eye on Nokia as it gets set to roll out Windows phones [The Seattle Times]

(Seattle Times (WA) Via Acquire Media NewsEdge) Oct. 25--Sure, there have been announcements already about Windows Phone handsets coming from the likes of HTC, Samsung and LG.

But what some Microsoft watchers are keeping a sharp eye on are the announcements that will be coming from Nokia World in London this week.

Nokia, the Finnish company that's the world's largest phone maker by units, has bet all its chips on Microsoft, saying earlier this year that it would be using Windows Phone on all its smartphones going forward. Microsoft, in the meantime, is counting on Nokia to make the Windows Phone operating system a serious contender in the global smartphone market.

On Wednesday, at its annual conference, Nokia is expected to unveil its first Windows Phones. For Nokia, which has seen its place in the smartphone market overtaken by Android phones, Wednesday marks the beginning of a chance to prove that new CEO (and former Microsoft executive) Stephen Elop was right in deciding to partner with Microsoft and a chance to prevent Nokia's market share from eroding further.

Its share of the global smartphone market has plunged. It suffered a third-quarter net loss of $94 million (though less than expected), had a second-quarter net loss of $512 million; and announced 10,000 layoffs this year.

For Microsoft, which has had a hard time gaining traction in the smartphone market, Nokia's worldwide reach is a chance to clamber out from behind the shadows of Android, Apple and Research In Motion.

"This is what could make the difference from Windows Phone becoming an also-ran or being a solid No. 3 and making its way to No. 2 in coming years," said Rob Sanfilippo, a research vice president with the independent analysis firm Directions on Microsoft.

Microsoft CEO Steve Ballmer said at the Web 2.0 summit in San Francisco last week that Nokia would be showing a "bunch of new devices running Windows Phone" at Nokia World.

Analysts are generally predicting that Nokia will show two -- a high-end and a low-end model -- and, at a stretch, three.

"They need to show a high-end model to get aficionados more interested in Nokia's capabilities -- what Nokia can do to differentiate" from other companies using hardware running on Android or Apple's operating systems, Sanfilippo said.

And Nokia needs to show a lower-end model to address more entry-level markets around the world, where it has been popular in the past, he said.

Rumors have been rampant that Nokia will debut what may be called the Nokia 800, code-named Sea Ray. Bloggers have speculated that the design may be a variant of Nokia's curved-glass-screen N9 handset, which launched in June. Some bloggers are also predicting that Nokia will show two other phones: one code-named Sabre, which could be the budget phone, and a big-screen phone code-named Ace.

Gartner analyst Michael Gartenberg says there are too many variables for him to speculate on what Nokia will show or when such handsets will be available.

"The most important thing for them is -- whatever they deliver -- to deliver in a timely manner, and show how they can differentiate themselves in the marketplace," he said.

Few are expecting whatever handsets Nokia does show to reach U.S. store shelves in time for this holiday season.

Though it's generally been expected that Nokia handsets runnings Windows Phone would become available sometime this fall, that will most likely happen in Europe, where Nokia has a stronger market share, and possibly in Australia.

In recent years, Nokia hasn't had much of a presence in the U.S., analyst Sanfilippo said: "So just due to the fact that Nokia has strength in other parts of the world, I think they'll try to maintain those strengths, maybe learn a few lessons, do some fine-tuning, use that leverage and then come here" -- probably sometime after the new year.

He doesn't expect the delay to hurt Microsoft since Nokia will have plenty of markets to work with outside the U.S.

Carolina Milanesi, a research vice president with Gartner, thinks Nokia will wait until it has a device that can run on high-speed LTE networks before bringing one of its Windows Phones to the U.S..

"Trying to get in the market now -- when they do not have an LTE device, they have a weaker ecosystem and when carriers are still all pushing Android -- will make no sense," she said. "Nokia has a weak brand in the U.S,. and they need to get some 'Wow' back in it." Janet I. Tu: 206-464-2272 or [email protected]. Information from The Associated Press is used in this report.

___ (c)2011 The Seattle Times Visit The Seattle Times at Distributed by MCT Information Services

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