Windows Phone 8 launch is make-or-break moment for Nokia, says analyst

Nokia's new phones need to have a wow-factor that will generate the kind of buzz that Samsung's and Apple's products have, says analyst

On Wednesday, Nokia and Microsoft are once again taking the stage together to launch Nokia's second-generation Windows Phones. Based on Windows Phone 8, they will have a new start screen, dual-core processors and improved cameras.

For Nokia, the launch of its first smartphones based on Windows Phone 8 is a make or break moment, and it is massively important to Microsoft as well, according to Ben Wood, director of research at CCS Insight.

"The challenge that Microsoft faces with the timing of the launch is that it risks being drowned out by the deafening noise generated by iPhone 5. That is going to be a challenge for Microsoft and its licensees, the most important of which is Nokia," said Wood.

The next iPhone is expected to be launched on Sept. 12, while a Nokia event scheduled for Wednesday will see the launch of at least two new phones, the Lumia 920 and Lumia 820, according to rumors.

Rumors also say the Lumia 920 will have a 1.5GHz dual-core processor and a 4.5-inch display with a resolution of 1280 by 720 pixels. The Lumia 820 is expected to have a slightly smaller 4.3-inch screen, but the same resolution.

The Finnish phone maker is also expected to put an 8-megapixel camera in the Lumia 920, and to brand it PureView, a name first seen on the Nokia 808, which runs the Symbian OS.

An 8-megapixel camera would disappoint some people, since the Nokia 808 has a 41-megapixel camera. "The future of photography will be about how you use pixels, optics and image processing together," Nokia's Damian Dinning said on Twitter. "PureView is about blending optics, pixels and image processing in new and different ways to allow you to do things you otherwise cannot," he added.

Images of the purported new phones and accessories including a wireless charger have been published by Twitter account evleaks.

"The phones need to have a wow-factor, which generates the kind of buzz that Samsung, Apple and others have been able to generate with new phone launches," said Wood. "If it fails to get that reaction at the time of the announcement, that does not bode well for the future of the portfolio."

The success of Nokia's phones will also depend on users taking Windows Phone 8 to heart.

One of the most important new features in Windows Phone 8 is the revised start screen. The new version of the start screen gives users more flexibility and control over how the live tiles look and work. The interface allows users to change the size of a tile between small, medium (the current size) and large.

Smartphones based on the new version of Microsoft's OS can be equipped with HD screens, multi-core processors, NFC and microSD card slots, which will help the platform catch up with its competitors on the hardware front.

When Nokia entered the Windows Phone space, development of the current version of the OS had already started. Being more involved in the development of Windows Phone 8 will allow the company to develop better products, according to Nokia.

While the company has differentiated its existing products with design and unique apps, Nokia thinks it can do a lot better than that, CEO Stephen Elop said earlier this year.

In 2010, Nokia's smartphone sales averaged well over 20 million per quarter. While the overall market has grown significantly Nokia sold only 10.2 million smartphones during the second quarter this year, and most of those were still based on Symbian.

But for Nokia to grow its Windows Phone sales, which it needs to do by many millions, it needs more than just new high-end devices, according to Francisco Jeronimo, research manager at IDC.

"It is very important to see a wider choice of smartphones based on Windows Phone at a lower price point. Nokia has started growing the portfolio and lowering the price with the Lumia 610 and 710, but much more is needed. Android only started to grow when a wider choice became available," said Jeronimo.

Last week, Samsung became the first to launch a smartphone based on Windows Phone 8. The ATIV S has a 4.8-inch HD Super AMOLED display. Powered by a 1.5GHz dual-core processor, the phone is 8.7 millimeters thick with NFC integrated and can access the Internet over HSPA+ networks at 42M bps.

The Samsung device was the first in a big lineup of new hardware that's coming with Windows Phone 8, according to Microsoft. HTC and Huawei are also expected to launch smartphones based on Microsoft's new OS in the near future.

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Copyright © 2012 IDG Communications, Inc.

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