Technology Stocks : Nokia (NOK)
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From: zax1/11/2012 9:58:33 AM
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Can Nokia Play The Volkswagen Game?

Samsung, HTC and other Android vendors are no longer innovating on the hardware look and feel of their phones. The conventional wisdom says consumers no longer care about that. Is it possible this has created an opening for a new design to carve a niche? The timing for the Lumia 900 debut in the US market just might be right. Handsets have never looked this boring, not since the pre-1994 era of whip antenna bricks before the [url=]Nokia 2100 changed the dynamics[/url] of phone design.

When Volkswagen debuted the New Beetle in 1998, there was skepticism about its success in the US market. The car was basically a reskinned VW Golf with little storage space and some fairly serious quality issues with transmission and windows. Its European vibe was considered possibly too weird for America. Of course, it became a hit – unusual, quirky design was a big selling point at the time when the US car industry was dominated by cautious clones. Later, the offbeat approach was copied with gusto by Chrysler and others.

Nokia announced its first major high-end device for the US market on Monday – and the Lumia 900 will basically have to duplicate the New Beetle trick in order to make an impact. This is a single-core phone competing against the new dual-core beasts of Samsung and HTC. It has a regular 4.3 inch display instead of the 4.6 to 5 inch jumbo screens debuted by the Asian Android vendors. It has two good cameras, but they does not hit the 16 MP level of the latest HTC.

The two advantages the Lumia 900 possesses are a new silhouette and an original user interface. Compared with the army of Android models AT&T announced, the Lumia hardware pops out. The cyan version features a glass block slightly elevated from a bright blue chassis, contrasting sharply with the Samsung-Motorola-HTC-LG-Pantech monoblock look. It’s no coincidence Nokia opted to use the blue Lumia in its Monday presentation. That’s the approach Volkswagen used in its New Beetle ads that often featured neon colors to underline the quirky design.

There are two obvious obstacles here. First – American consumers have not created a big handset hit based on a novel design since the iPhone debuted in 2007. Obviously, you can argue that the iPhone success hinged more on software than the new engineering approach. The days when the hardware design alone could create a bestseller seem to be long gone – before the iPhone, Motorola RAZR in 2004 was arguably the last of the smash hits created by a new shape.

But the entire new Android phone wave – and the latest iPhone – are built on the bet that consumers now only focus on software and what is under the hood. Siri, dual-core processors, better camera quality – it’s all internal now.

Or is it? Could the fact that so many vendors have decided to go with old designs this winter open the door for a new competitor that introduces new hardware design combined with a novel UI? The latest Windows OS does not offer ground-breaking innovations – but there are small, interesting touches such as the way the application icons convey a stream of real-time information.

The challenge of getting US consumers to sample Lumia 900 is aided by how boring the new wave of Android models look despite their awesome specifications. But the challenge of getting consumers to abandon the Apple and Android ecosystems is something no car company has had to wrestle with. Apple’s grip on its consumers is likely unbreakable – those people are gone. But Android just might be a different kettle of fish.

A research firm called NPD shocked the mobile telecom world earlier this week when it presented a radical shift in US smartphone market share in the October/November period. According to NPD, Android OS lost a shocking 13 percentage points of US smartphone market share between 3Q11 and the pre-Christmas season. At the same time, Apple soared. This dovetails with the profound smartphone weakness that struck HTC and Motorola during 4Q11. Despite the strong Android activation numbers recently reported by Google, Android’s triumphant run in the US smartphone market may be already over.

This week’s US media coverage of the Lumia 900 has been surprisingly positive, from Daily Beast and Time to the curmudgeons of PC World and PC Magazine. American media is is bored with the Apple/Android narrative, ready to write contrarian pieces about a surprise comeback of Windows. True comeback in North America may be out of reach for Nokia. But I would not count out the possibility of surprisingly strong early showing for Lumia 900 as US taste-makers flirt with deserting the grimly predictable Android camp this spring.
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