Analysts say new Nokia Windows Phone 7 Lumia could be a bust

By Preston Gralla

Microsoft is betting the farm that its deal with Nokia will help kickstart the struggling Windows Phone 7 platform. But two analysts say that Nokia's new Windows Phone 7 devices, including the Lumia, may well be duds.

Forbes reports that a research note by Bernstein Research analyst Pierre Ferragu paints a dismal picture for sales of Nokia's high-end Lumia 800 Windows Phone 7. Forbes reports that he wrote this:

"With no breakthrough innovation, we believe Nokia's new phones are unlikely to get traction in a highly concentrated high-end. Second, we don’t believe Lumia phones are competitively priced. Third, we believe in economics of increasing returns for mobile ecosystems and judge rather unlikely that Windows can gain critical mass against Android and iOS. Fourth, we have seen evidences of lack of traction for the Windows operating system over the last 12 months and challenge the idea that the Nokia brand can make a meaningful difference today."

That's as bad an indictment of Windows Phone 7 as I've heard in some time. And Ferragu isn't alone. Forbes says that Pacific Crest analyst James Faucette has similar feelings, and has lowered his estimates for sales of Nokia Windows Phone 7 devices. Initially, he had forecast up to 2 million of them being shipped in six markets for the holiday; he's now lowered that to less than 500,000 for December, and under a million for the entire quarter.

As I've written in a review, the Lumia 800 is a solid, stylish device, and I said its quality could be an initial step toward reviving Windows Phone 7.

These research notes, though, don't bode well for the future of Windows Phone 7. A year ago, it had disappointing sales for the holiday season. Since then, sales have flagged, but there's been hope that Nokia would help turn that around. If the deal with Nokia doesn't help this holiday season, Microsoft still has a lot of long, hard work ahead.

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