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Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
A.Sandeep Editor's Desk
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Can Microsoft and Nokia Upend the Smartphone Biz?
The launch of Windows phones has set tongues wagging in the industry but it’s too early to say whether they will win their way to consumers’ hearts.
Issue Date - 17/11/2011
About a month ago, Microsoft organised a mega event to announce the launch of its latest set of Windows phones in India based on the updated Windows 7.5 or Mango operating system. The veteran software company, has recently been focusing on establishing its own operating software for mobile phones and has entered into a slew of manufacturing agreements with leading handset players like HTC, Acer, Samsung, and Nokia for launching Windows powered phones in India. A few days later after that event, Nokia hosted an even bigger do in London to unveil its much anticipated Windows offerings: Lumia 800 and 710, as well as four ‘Asha’ series smartphones aimed at the highly lucrative emerging markets.

The Nokia-Microsoft agreement, inked in February this year, has the potential to be a game-changer for Windows powered phones in India and other emerging markets. Despite its recent reverses in the handset market, Nokia still outsells other phone makers by a wide margin. And since players like Samsung, HTC and even Acer have a larger marketing focus on the established Android franchise, they will be lesser inclined to push Windows phones all that aggressively.

The launch of Nokia’s Windows powered Lumia phones have come at a critical juncture and just in time to test the waters during the Christmas holiday season in the Western markets. Apple’s iOS platform recently upgraded to iOS 5, while the latest version of Android — Ice Cream Sandwich — is about to become operational. BlackBerry OS 7 too has been recently launched. And in the midst of it comes the upgraded version of Windows 7, Windows 7.1, or Mango.

In recent times, while Google’s Android handsets have powered ahead, Microsoft was forced to sit on the fence. A key reason Microsoft could not make inroads in the smartphone space was its inability to get OEMs (original equipment manufacturers) to pump out new handsets for Windows phone like they did for Android. Now, at last, Microsoft seems to have finally got that equation right and is keen on building the ecosystem for its Windows phone. And its agreement with Nokia is in piece with its new focus and thrust on getting its phone business hit the right notes in the marketplace.

Nokia’s marketing efforts and its deep knowledge of handset retail are likely to offer a big boost to sales of Nokia-branded Windows phones. Nokia Oyj Chief Executive Officer Stephen Elop, while launching the Lumia-series phones said marketing spends on the Lumia will triple compared with prior product launches. Nokia has lined up 31 service providers, including Vodafone to win back market share from the likes of Samsung, and Apple. In India too, with its Asha series, Nokia is aiming to regain its 50% market share by 2012 with this offensive. Industry journal ‘Voice & Data’ reports that for the fiscal 2010-11, the Indian mobile handset market touched Rs 33,171 crore and Nokia’s share was Rs 12,929 crore.

And it’s not just Nokia that Microsoft is counting on to propagate its Windows mobile OS. HTC has already launched Radar and Titan while Samsung will soon introduce the latest Windows offering of its Omnia W range. Another OEM, Acer, too is gearing to launch its Allegro range. The Windows phone marketing campaign will use the distinctive USP of Windows phone interface — large, colorful tiles, unlike the smaller icons of the Apple and Android interfaces.

Bhaskar Pramanik, Chairman, Microsoft India, says: “The product is here, and we expect users will really appreciate the Windows phones. We are hoping to transform customer experience in terms of hardware and software and consumers’ choice in terms of devices on offer.” Except for Nokia, which is pulling no punches to get consumers on board for its newly launched Windows phones, most others OEMs will be hawking their Windows phones as part of their normal business. Ravi Desai, Head of Telecom, Acer India, says: “We don’t have a different strategy for selling Windows phone; it’s the same as our Android phone. Since Windows is just launched, it’s difficult to say, how well it will be accepted.”

Some industry analysts think that Windows phones won’t alter the existing market dynamics of the smartphone business where Android phones, iPhones and BlackBerrys rule the roost. According to market analyst ChangeWave Research, customer satisfaction for Windows smartphones is just 24% compared to 74% for iPhones and 65% for Android devices. Also, there are only a few thousand apps for Windows mobile, compared to 250,000 for Apple and 70,000 for Android. Referring to the Indian market, Pramanik says, “The beauty of this market is, it’s never too late to enter. I believe we are entering at a time, when the opportunity to grow is maximum. Remember smartphones are growing at a rate of 60% (with 3 million sales) and will reach about 7- 8 million by 2015. So we are very well poised.” The company claims that it’s seeing a tremendous response from the community of app developers, with over 30,000 applications already there and over 50,000 developers registered with them. Also, over 1.5 million applications have already been downloaded.

Applications are not a strong suit of Windows phones at the moment, but there are quite a few other positives. The first and most important is its rich user experience and interface. According to Pramanik, “We are very clear, about the kind of experience users should get. If there’s one thing we all have learnt from Steve Jobs it is that customer experience is paramount. The moment the customer experience deteriorates, people will not touch your products irrespective of the price.” But it knows it cannot do without apps. That’s why it’s paying software makers to write apps for Windows Phone 7 or the latest 7.5. Some like eBay and Netflix have even obliged, but many others won’t until they see brisk sales.
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