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Lumia Loses Luster Despite AT&T Marketing Push

2:40 PM -- AT&T Inc. (NYSE: T) cut the price of Nokia Corp. (NYSE: NOK)'s flagship Lumia 900 in half over the weekend to just $49.99 on contract. Is this the type of aggressive marketing it had in mind for its first Windows Phone smartphone?

The Lumia 900 was supposedly backed up with AT&T's "biggest marketing push" ever, but it appears that wasn't enough to help the already low-priced handset. A carrier spokesman says that AT&T continues to be pleased with sales of the Lumia and that handset promotions are a routine practice. (See AT&T's Nokia Lumia Drops LTE to $100, What the Nokia Lumia Really Costs and Nokia Fires Cheap Shot at Apple.)

But, it seems to me that Nokia's first flagship handset didn't live up to expectations. AT&T has also said it will be a big proponent of the Microsoft Corp. (Nasdaq: MSFT) operating system in general, so I'm wondering now if the carrier will pull out bigger guns for Windows 8 (which the Lumia 900 will never see).

Of course, dropping the Lumia's price could to help drive sales, but my guess is, if you weren't interested before, another $50 off won't seal the deal for you. It's a great device, but it's still missing apps and brand awareness and is crippled by the fact that it will never get the latest and greatest OS Microsoft has to offer.

All of this just puts more pressure on Windows 8 and, especially, on Nokia. All of the wireless operators have said they want to support a third ecosystem -- and I believe that marketing and promotion from them will help to create it -- but both sides have to live up to their end of the bargain. (See Don't Count Nokia Out Just Yet and Nokia Counts on AT&T for a US Comeback .)

Nokia's Windows 8 devices had better impress when they launch this year, and the wireless operators should give equal -- if not preferential treatment -- to them. Otherwise, this won't be the last price cuts we see.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

krishanguru143 12/5/2012 | 5:27:52 PM
re: Lumia Loses Luster Despite AT&T Marketing Push



It doesn’t matter what the carriers do, the consumers have spoken.  The carriers have listened, Microsoft has not.  The majority of the consumers do not like or want WP; the sales have shown that.

 

In Q4 2011, MeeGo outsold all of WP handsets from all manufacturers, not just Nokia.  You have an OS that Nokia killed and tried their best to hide it and yet it outsold WP7.  Bada also outsold WP7 from all manufacturers.  WP was on the market for a year and MeeGo was a newcomer and did better.  The writing is quite clear, WP is not what the consumer wants.

Q1 2011 WP/WM shipped 2.6 million units and held a market share of 2.6%.

Q1 2012 WP/WM shipped 3.3 million units and held a market share of 3.3%.

 

Just for grins, how about Symbian.

Q1 2011 Symbian saw 26.4 million units and held a market share of 26%.

Q1 2012 Symbian saw 10.4 million units and held a market share of 6.8%.

So, Symbian, MeeGo and Bada all did better than WP did.  Don’t forget that it includes WM in there as well.

Q3 2011 saw 2 million WP7 shipped.  Q4 2011 saw 2.7 million shipped.   Q2 2011 was around 2 million shipped.

For Q2 2012, the predictions are 2.85 million, so a drop from Q1 2012.

Nielson back that there was a decline in Q2 for 2012.  They say WP had a 1.3% market share for Q2 compared to 1.7% for Q1.  WM was at 3% during that period.  When their existing customer base is refusing to transition, that is the first sign on failure.  The second, when was the last time WM saw an update?  2 years ago and that was just a bug fix release with the initial release being the prior year.




schlettie 12/5/2012 | 5:27:52 PM
re: Lumia Loses Luster Despite AT&T Marketing Push

The Lumia 900 is listed 28th on AT&T's smartphone page, behind two WP7 phones from Samsung, and behing phones from Sharp & Pantech.

krishanguru143 12/5/2012 | 5:27:44 PM
re: Lumia Loses Luster Despite AT&T Marketing Push



It was heavily touted though; displayed on the front page, large displays in their store, TV ads, etc.  The sales are not there and like any retailer, products that sell get more attention and product space.  So if the consumer is not buying the Lumia 900, why would AT&T continue to place it front and center?

AT&T reportedly made the Lumia 900 the biggest marketing campaign ever for a single product.  The reports are between $150 and $200 million.  Looking at Q1 2011 figures, they spent $450 million on advertising and $101 million of that was for the iPhone.  So the Lumia 900 was 150 to 200% more than the iPhone.   The sales figures have been dismal with one report stating around 300,000 sold.  Do the math; $150 million / 300,000 = $500 a phone.  With a subsidy of say around $250 (AT&T will sell the phone contract free for $400) and they are in it for at least $750.  The cheapest voice plan they offer for it is $40 (unless you are a senior) and the cheapest data plan is $20.  So over the course of the contract, they can expect to see $1,440 but over half of that is gone for marketing and the subsidy.  Do they make money, yes but there are others phones that take a lot less work to sell which doesn’t cost them $750 for each one off the top.

 

So why would AT&T continue to promote a product that isn’t selling?




krishanguru143 12/5/2012 | 5:27:29 PM
re: Lumia Loses Luster Despite AT&T Marketing Push



According to the results for Nokia; in all of North America they sold .6 million handsets.  The reported 300,000 Lumia 900’s sold by AT&T looks a lot more credible.  Q1 2012 also was .6 million.  T-Mobile sells the Lumia 710 and Canada is included in North America.  Compare this to Q2 2012; they sold 1.5 million and this was pre-WP.  So Nokia has seen a year-over-year drop and a 0% quarter-over-quarter growth in the US.  They are worse now than when they started.

 

Ex-Microsoft CEO running the company into the ground.  Nokia North America had limited success and yet another ex-Microsoft running the North America region has also performed just as well as Elop; lowered sales dramatically.

Imagine what they could do if they really wanted to destroy the company.

 



I wonder how many carriers are going to be onboard with any WP8 devices and use marketing dollars to promote them?  AT&T could have taken that $150 million they spent to sell 300,000 devices and used it for a promotion.  If you renew your contract or activate a new line in Q2 2012, each day one lucky person will win $1 million.  It would have cost them $90 million and they would have seen a better ROI.







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