Nokia is planning to launch its Windows Phone 7 handsets through China Mobile (China’s largest mobile phone carrier). China Mobile accounts for two-third of the country’s total mobile phone user base i.e. over 600 million users. This looks like a desperate move from the struggling handset maker to support his falling sales and hold off against fierce competition from Android devices and iPhone in China. It is expected that the initial launch will take place later this year and mass shipments will happen in 2012.
Nokia is struggling to hold its position as the top selling handset manufacturer in China with growing sales of Android and Apple’s iPhone devices. According to the financial report for the second quarter, Nokia is experiencing a downward trend in its sales. Nokia’s sales have fallen by 55% in china and 32% globally from the previous quarter. Competition and pricing tactics from the rivals have played a vital role in the downward trend. Further the distributors are also sitting on higher inventory levels for Nokia products, resulting in fewer new purchases.
Nokia is expecting to consolidate its position with the launch of smartphones running Microsoft’s Windows Phone 7 operating system. C.K. Lu, an analyst with research firm Gartner said:
Nokia’s strategy is to use Windows Phone to position its smartphones as higher-end devices. But if you want the mass market, you have to drive down the price. I think this Windows Phone 7 will help them, but I don’t think it will have a big effect.
According to Lu, Nokia’s Windows Phone 7 devices are estimated to cost around $300, with main emphasis on the high-end market. However, Android handsets have already reached the low-end market and cost 1,000 yuan (US$157). With Android devices already available in just half the price and Google planning to directly place itself into the handset business with Motorola Mobility, Nokia’s plans to capture the smartphone market looks to be doomed. Only time can tell, lets wait and see.