Plunging sales for Lumia Windows Phones means Windows Phone 8 will be make or break for Nokia

Sales of Nokia's Lumia Windows Phone devices plunged in the third quarter, to 2.9 million units, compared to 4 million units in the quarter previous. It's now clear that unless Windows Phone 8 rejuvenates the company's sales, Nokia may not survive.

Nokia had total sales of $9.4 billion in the third quarter, down 19 percent from the same quarter last year, for a net loss of $1.27 billion. It continues a long series of disappointing quarters. Nokia essentially bet the farm on Windows Phone when it made a deal with Microsoft to gradually switch over all of its smartphones to that operating system. To date, that switch hasn't paid off.

Nokia has announced two high-end Windows Phone 8 devices, the Lumia 820 and the 920, that are expected to ship in November. The company has gotten buy-in for Windows Phone 8 from carriers. They are expected to promote Windows Phone 8 devices as a way to push back against Apple. Apple gets large suubsidizes the sales of iPhones, and big royalties for every iPhone user.

It's not at all clear, though, that the Lumia 820 and the 920 will be able to save Nokia. Geoff Blaber, who leads mobile device research at CCS Insight, told Computerworld:

"The 820 and the 920 launch is absolutely critical. But high expectations should be kept in check, because these are two products that are launching halfway through Q4 into an extremely competitive market and they are expensive products."

He believes that Nokia needs to release lower-cost Windows 8 devices, which would sell in higher volume.

If Nokia doesn't sell enough Windows Phone 8 devices, expect the company to face bankruptcy and be bought. If that happens, don't be surprised if Microsoft is the buyer. Microsoft will prop up Windows Phone at any cost, and Nokia could be available at a relatively low price. Rumors say that Microsoft is planning to make and sell Windows Phone 8 Surface devices. Buying Nokia would allow it to do that easily, and put it into the phone business big time.

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