Nokia Lumia 1020 hardware 'lags behind' while Microsoft struggles to update Windows Phone

Posted:
in iPhone edited January 2014
The two year old Windows Phone partnership between Nokia and Microsoft, once lampooned by Google Vic Gundotra in a tweet that "two turkeys do not make an eagle," is facing new problems on both the hardware and software fronts.

Nokia Lumia 1020
Source: Nokia

Nokia's hardware features "continue to lag behind"

On the hardware front, a report by Barron's cited a note by Credit Suisse analyst Kulbinder Garcha, who gave a pessimistic appraisal of Nokia's latest Lumia 1020.

The new phone boasts an impressive camera and optics, but Garcha stated that its "hardware features continue to lag behind some of the flagship devices like Samsung Galaxy S4," which is both lighter and thinner despite having a larger screen and faster processor.

Garcha added that Nokia's $300 entry level price for the 1020, and its exclusive availability on AT&T in the U.S., "does not look encouraging? when compared to the $200 starting price for the lower end of the iPhone 5 and Galaxy S4 lines.

While Nokia's phone boasts more storage than the entry level 16GB models of its leading competitors, its high starting price means it can't attract a significant number of buyers looking at options that cost less up front.

Given the increasing competitive pressure among higher end smartphones as the bounds of the finite market are reached, the "Peak Smartphone" issue facing Apple and Samsung will also impact Nokia's premium phone ambitions.

One year ago, Nokia banked upon getting more traction out of its campaign mocking Apple's iPhone by advertising that the "smartphone beta test is over" while attempting to resurrect the then two year old Antennagate "death grip" meme launched by Gizmodo, but despite the negative ads, Lumia hardware isn't exactly flying off the shelf.

Nokia smartphone beta test is over


It was also one year ago that AT&T boasted that its Lumia launch with Nokia would be a "notch above anything we've ever done," involving $100 million of advertising pooled by Microsoft among its Windows Phone partners, and AT&T's designation of Nokia's Lumia models as a "hero" status to be heavily promoted in its retail stores.

Microsoft's software also continues to lag behind

On the software platform side, Nokia is depending on Microsoft to finish a series of core enhancements to Windows Phone, but those fixes are now being pushed off into 2014 as the company scrambles to dribble out incremental, minor updates that catch up to Apple's releases from a year or two ago.

A report by The Verge says Microsoft has outlined a package of minor updates it calls "General Distribution Release 2," which includes browser updates, data use reporting, and other features the site summarized in saying, "overall the changes are very minor for an update eight months after the original Windows Phone 8 release."

More substantial features are being reserved for "Windows Phone Blue," an update expected in early 2014, including a notification center, improved multitasking, and screen rotation lock.

Some of these features might be released sooner in a "General Distribution Release 3" service pack later this year, but the report noted that progress has been delayed by problems "testing new chipsets" and working out bugs specific to particular WP models. "Windows Phone software and ecosystem still lags the competition."

"One particular bug with unbranded devices not sold by carriers is said to have affected the way a handset is identified on a network," the report stated. "We're told that Microsoft had a hard time fixing this particular problem, resulting in delays to other planned work."

The complexity of rolling out patches, fixing bugs, advancing new features while catching up to competitors highlights the advantage Apple holds as a vertically integrated company that builds its own hardware and software in tight coordination.

Microsoft's problems "leaves Nokia and other phone makers having to rely on hardware selling points, knowing full well that the Windows Phone software and ecosystem still lags the competition," the site observed.

Windows Phone apps also continue to lag behind

In addition to struggling to catch up in hardware and software, Windows Phone as a platform is also finding it difficult to attract third party app development. The platform hasn't yet attracted even the attention of Facebook's Instagram, which remains one of the five top titles for Android one year after its release for that platform.

Instagram launched on iOS in October 2010, and remained an iOS exclusive until April 2012, the same month it was acquired by Facebook. Apple's ability to foster exclusive new iOS development that doesn't reach other platforms for years, if ever, serves as a strong attraction for customers, an issue Microsoft is acutely aware of as the developer of the Xbox gaming platform over the last decade.

Despite announcing tools (back in 2011) to help iOS developers port their apps to Windows Phone, Microsoft's mobile platform remains devoid of compelling exclusive apps and has failed to spark significant third party development on par with Apple's App Store.



Microsoft initially downplayed the value of mobile apps, suggesting that Windows Phone didn't need third party "developers, developers, developers" after many years of its chief executive Steve Ballmer popularizing that phrase as a foundational strength of the PC Windows platform in a sweaty, impassioned chant.
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Comments

  • Reply 1 of 68
    gatfgatf Posts: 4member
    That video is just so good.
  • Reply 2 of 68
    ankleskaterankleskater Posts: 1,287member


    The 1020 is far from perfect. But an analyst who compares the thickness of what is clearly a speciality camera-phone to a general purpose phone is clearly challenged when it comes to technology, not to mention common sense.

  • Reply 3 of 68
    negafoxnegafox Posts: 480member

    Quote:

    Originally Posted by AppleInsider View Post



    Garcha added that Nokia's $300 entry level price for the 1020, and its exclusive availability on AT&T in the U.S., "does not look encouraging? when compared to the $200 starting price for the lower end of the iPhone 5 and Galaxy S4 lines.


    Some of the complaints are comparing apples to oranges. It includes a more higher-end camera not targeted towards the general consumer. Also, the price is actually quite fair. It includes 2 GB RAM, 32 GB space and a 41 MP camera. That is not too shabby for the extra $100. The 32 GB model of the iPhone 5 runs for the same price.


     


    My issue is the fact that it is a Windows Phone. Go home Nokia, you're drunk for betting on Microsoft.

  • Reply 4 of 68
    dreyfus2dreyfus2 Posts: 1,072member
    MS sure is persistent, but I wonder how long it will take before they must review their mobile strategy. So far their only "successes" are outperforming BlackBerry slightly, and killing Symbian and MeeGo (which was easy, because they simply paid for them to die).

    After almost three years with WP and millions of advertising Dollars they achieved 3% market share, have one dedicated ODM, and nobody involved makes a single Cent on any of this. To make it even worse, MS ties itself up in a nonsense OS like RT which further divides resources and developers. WP and RT combined cost everybody involved more money than what MS makes from licensing IP to Android makers... A brilliant business strategy.

    But I am sure, Ballmer's great reorganisation will solve all of this. Once it's done and the dust has settled in 3-5 years. Might be too late for Nokia though.
  • Reply 5 of 68
    drblankdrblank Posts: 3,383member


    I think Nokia has a problem.  A $300 smartphone with a really camera on it can't be that good inside and STILL make a profit.   Oh well, who is running these companies anyway?


     


    I wonder what the total mfg costs are, including packaging?  If it's more $150, then it's too expensive to mfg., and even at costing $150 for mfg doesn't leave a lot of room for profit.  Remember, they have to sell it through a reseller and the reseller has to mark it up to make a decent margin, and then there is shipping costs from the assembly plant to the distribution location and then to the reseller's store/to your house.  Then there are the things that eat up at profits other than normal overhead is warranty replacements, tech support calls.

  • Reply 6 of 68
    mstonemstone Posts: 11,510member


    Nokia is running out of time. Sooner or later they must sell their mapping assets. I hope Apple can pick it up at bargain price.

  • Reply 7 of 68


    Biggest problem I see with this is the AT&T exclusivity agreements. Nokia did not learn from the Lumia being ignored and there is no reason this will be any different. By the time the other carriers get their own variants, it will be too late.

  • Reply 8 of 68
    gwmacgwmac Posts: 1,800member


    I wonder if Nokia would not have been more successful had they simply gone with Android. Or perhaps their own Linux which was called Maemo I think. WebOS was actually a pretty cool mobile OS that I think is far superior to Windows which they could probably buy for a song now. I think Nokia may need to consider offering some new options besides Windows only. Tizen is open source and also can run Android apps I believe.

  • Reply 9 of 68
    dreyfus2dreyfus2 Posts: 1,072member
    gwmac wrote: »
    I think Nokia may need to consider offering some new options besides Windows only. Tizen is open source and also can run Android apps I believe.

    The deal between MS and Nokia is valid until 2016 and is said to specify minimum licensing volumes. Nokia may have limited means to manoeuvre here. They also fired tons of engineering staff when committing to MS. None of these alternative OSs is really a turnkey solution, it is not like installing Ubuntu on a Windows PC.
  • Reply 10 of 68


    Apple is looking smarter and smarter for keeping hardware and software all under their control.


     


    I feel bad for Nokia, waiting on and trusting Microsoft to supply their mobile phone OS (but in the end, those chose to do so). Ugh.

  • Reply 11 of 68
    "Windows Phone Blue?"
    "General Distribution Release 3" service pack?

    I'm interested in the camera -- I know I would use it a lot and get great pix -- but something about the future software upgrades smells too much like Windows.
  • Reply 12 of 68
    gwmacgwmac Posts: 1,800member

    Quote:

    Originally Posted by dreyfus2 View Post





    The deal between MS and Nokia is valid until 2016 and is said to specify minimum licensing volumes. Nokia may have limited means to manoeuvre here. They also fired tons of engineering staff when committing to MS. None of these alternative OSs is really a turnkey solution, it is not like installing Ubuntu on a Windows PC.


    I had no idea MS had Nokia locked down that tightly. Nokia still have a lot of fans around the world I just think most of them don't want a Nokia phone with Windows. I wonder if they will offer Android in 2016 when their deal with MS expires. (assuming they are still around by then) 

  • Reply 13 of 68
    rot'napplerot'napple Posts: 1,839member
    Steve Ballmer's new chant, "Non-Developers, Non-Developers, Non-Developers!"
  • Reply 14 of 68
    sockrolidsockrolid Posts: 2,789member


    Originally Posted by AppleInsider View Post



    "Windows Phone software and ecosystem still lags the competition."


     


    Is it time for Windows Phone 9 yet?  Let's see now.  WP7: November 2010. WP8: October 2012.  WP9: October 2014?


    No, I guess it's not time for Windows Phone 9 yet.  Microsoft seems to be on a 2-year schedule. 


     


    So the real question is actually "Will Nokia be around when Windows Phone 9 is ready?"


    I'd give them a 25% chance of surviving another year and a quarter, unless they "diversify"


    and become YAAHM.  Yet Another Android Handset Manufacturer.

  • Reply 15 of 68
    "Windows Phone Blue?"
    "General Distribution Release 3" service pack?

    I'm interested in the camera -- I know I would use it a lot and get great pix -- but something about the future software upgrades smells too much like Windows.

    Just get yourself a proper camera if you want "great pix" with the big megapixels.
  • Reply 16 of 68
    timgriff84timgriff84 Posts: 912member
    Its true that in the US Nokia and Win phones market share is still very low. But the world is bigger than the US. In the UK they just went passed 10%, in Russia Nokia now sells more than Apple, in many countries Win Phone is overtaking Blackberry and in less developed countries where phones arnt subsidised there hitting 30% market share.

    I also find it really odd when people mention the apps that are available. It seems the only people with a problem with the apps are the people without the phone. Ive lost count now of the number of articles ive read saying "some app finally comes to windows phone", then when you read the reviews in the store the apps actually get slated by win phone users because there an identical copy of the ios version and there's already better alternatives.
  • Reply 17 of 68
    I don't think a better camera attached to a 'meh' phone is going to sway consumers. If I want better than phone quality pictures, I'll spend $500 for a Canon T4i with lens. Oh wait. That's what I did.

    I want my phone to be an phone and do Apps. I do that a lot more than take pictures. As stated in a Forbes article:
    the problem with emphasizing the Lumia 1020s pixel count is that no consumer wakes up thinking, "What I really need is larger images from my phone." Nokia is betting that there is a large subset of mainstream users though who want better images from their phone. But start to mention the 1020s most relevant attributes, like pixel oversampling, 1/1.5-inch sensor size and lens element construction, to the mainstream consumer and their eyes will soon glaze over. Add to this the fact that the vast majority of 1020 users will actually be dealing with much more manageable and shareable 5MP rather than 41MP files and there%u2019s a potential messaging problem.

    PS: The 1020 is fugly, too.
  • Reply 18 of 68
    ankleskaterankleskater Posts: 1,287member
    drblank wrote: »
    I think Nokia has a problem.  A $300 smartphone with a really camera on it can't be that good inside and STILL make a profit.   Oh well, who is running these companies anyway?

    I wonder what the total mfg costs are, including packaging?  If it's more $150, then it's too expensive to mfg., and even at costing $150 for mfg doesn't leave a lot of room for profit.  Remember, they have to sell it through a reseller and the reseller has to mark it up to make a decent margin, and then there is shipping costs from the assembly plant to the distribution location and then to the reseller's store/to your house.  Then there are the things that eat up at profits other than normal overhead is warranty replacements, tech support calls.

    $300 with 2 yr contract
  • Reply 19 of 68
    cyniccynic Posts: 124member


    Funny for Nokia to talk about Smartphone beta tests, because it reminds me of all those endless times of having to hard reset my Nokia Smartphone by removing the battery because their Symbian or whatever system that was hung up. ;-)


     


    As for Microsoft, yep, they seem to have quite a big problem and I believe it is in their DNA and their persistence to hold on to Windows and its technologies. They are not used to deliver rapidly deliver solid incremental releases. They are used to take half a decade in order to release a buggy behemoth. No surprises here.


     


    As for the platform itself not gaining traction: Not surprised at all. Their worldwide marketshare is still so unbelievably irrelevant in the light of iOS and Android, that no developer who hasn't been bought over or is some core MS evangelist will even think of investing into that platform. Naturally, Microsoft also had to go its usual way with its own technologies, some of which people don't really like that much and believed they could make a dent, whereas people are just not too interested. Out of the three, WP is probably the hardest to port for. Add to this the fact, that I firmly believe developers aren't actually even interested in a third platform succeeding. It wouldn't make any sense to split the user base across even more ecosystems, requiring you to develop, support and test three versions upfront in order to get the same amount of revenue, not even considering personal dislike here.

  • Reply 20 of 68
    creepcreep Posts: 80member

    Quote:

    Originally Posted by drblank View Post


    I think Nokia has a problem.  A $300 smartphone with a really camera on it can't be that good inside and STILL make a profit.   Oh well, who is running these companies anyway?


     


    I wonder what the total mfg costs are, including packaging?  If it's more $150, then it's too expensive to mfg., and even at costing $150 for mfg doesn't leave a lot of room for profit.  Remember, they have to sell it through a reseller and the reseller has to mark it up to make a decent margin, and then there is shipping costs from the assembly plant to the distribution location and then to the reseller's store/to your house.  Then there are the things that eat up at profits other than normal overhead is warranty replacements, tech support calls.



    If the total COGS on a phone were just $150, they'd be making a huge profit.  Remember that $300 is the subsidized price.  The full retail price (which is close to what carriers pay the manufacturers) is probably somewhere in the $500-$650 range.  Carriers make no margin on a subsidized phone...they actually take a loss and make it up on the monthly account charges.  As for the warranty replacements and tech support.  Those costs are estimated and rolled into the total COGS of $150.

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